Found this over at Ars Technica
PowerSat isn't the only company that thinks space-based solar power will be ready for economic deployment within the next decade. PG&E has actually signed a contract with a company called Solaren, which plans on delivering 200MW of space-based power by 2016. The company already has two patents for space-based systems, although both are extremely general, and the company hasn't publicly discussed the details of its plans. Nevertheless, it's clear they differ significantly from those of PowerSat, and those differences highlight some of the tricky economics of space-based solar power.
PowerSat's William Maness is moving in a different direction from Solaren. One of his biggest issues with such schemes is the location: serving spots like southern California, which already has excellent access to some of the best terrain for standard solar power within the US, doesn't make sense to him.
"If you can build productive ground-based facilities, it generally makes more sense to do that," Maness said. Instead, PowerSat will target markets that have strong renewable power mandates but less favorable options for ground-based solar; the Pacific Northwest and New Jersey were both mentioned explicitly.
He also prefers to avoid contracts for dedicated supply. Because ground facilities are relatively inexpensive, it would be possible to build several, and switch the satellites' target among them, pushing the power to wherever the company can get the best rates.
And avoiding smaller contracts is important, since the power provided is below the point where efficiencies and economies of scale really apply. In PowerSat's view, a large-scale, space-based solar facility with a 30-year life span provides the renewable energy equivalent of a large coal or nuclear plant, and has to be evaluated along those economic lines. Maness claimed that PowerSat's calculations indicate that, depending on governmental renewable power incentives, the total returns over 30 years work out to be similar to a large coal plant once fuel and waste disposal are considered, and they are somewhat better than nuclear.
All of that still requires launch costs to come down, however. Because of the satellite's modular design, Maness said they can go up on anything with a minimum of 10-ton launch capacity; larger vehicles would simply carry multiple satellites. That lets the company shop for the cheapest ride to low-earth orbit. Right now, PowerSat is seeing some of the best rates from SpaceX, a private company that has performed several launches. By the time PowerSat is ready for launches, SpaceX should have several years of experience with providing supply flights to the International Space Station as part of a contract with NASA.
Even so, Maness suggested costs need to come down to between a third and a quarter of current rates. But he argued that his company's plans have the sort of profile that could make that happen. The plan is to build multiple satellites in advance, then run an intensive launch schedule that ensures the generating capacity scales rapidly. That should get launch companies past what he called the "chicken and egg problem": launches are expensive because there's little economy of scale, and the expense scares away customers that could drive economies of scale. Maness also pointed out that electric utilities come to the table with a credit worthiness that's been rare in space-based businesses.
PowerSat's Philip Owen also suggested there might be a customer that can get at least some of the hardware into orbit even if launch costs don't come down: the military. He noted that it's possible to build smaller receiving stations that won't be able to extract the full output of the microwave transmissions, but could easily provide enough power to keep a modern military's electronic gear online. Given the problems with cost, logistics, and security that come with supplying fuel to the generators used during field deployments, space-based power could make economic sense for the military at levels where it doesn't for civilian use.
Because of the flexibility of targeting, it may be possible to have satellites deployed for testing and training purposes, but then redirect their output to civilian power production when they're not in military use. And that could change the economics for putting up companion satellites that are dedicated to civilian use.
In any case, it's clear that PowerSat has crunched the numbers and found some scenarios where orbital power can make sense. The key determinants will be whether any of the company's numbers are overly optimistic, and whether the essential features of those scenarios—lower civilian launch costs, increased renewable energy standards—are in place by the middle of the next decade.