Reading the fine print of BrightSource's $250 million IPO

BrightSource Energy, the California solar power plant builder backed by Google, Morgan Stanley and Silicon Valley venture capitalists, filed for a $250 million initial public offering on Friday. The Earth Day S-1 filing marks first big market test of investors' appetite for a capital-intensive solar technology that has yet to be deployed commercially. It comes as utilities have been turning to increasingly cost-competitive photovoltaic farms to meet their renewable energy mandates. BrightSource was founded in 2004 by American-Israeli pioneer Arnold Goldman, whose Luz International built nine solar thermal power plants in the Mojave Desert in the 1980s and 1990s. The company has attracted blue-chip investors, including French energy giant Alstom, as well as a $1.6 billion federal loan guarantee that is financing the bulk of Ivanpah's construction costs. NRG Solar, a subsidiary of NRG Energy, is investing up to $300 million in Ivanpah and Google last week invested $168 million in the project. In its filing, BrightSource, which has signed deals to supply utilities Pacific Gas & Electric and Southern California Edison with 2,600 megawatts of electricity, disclosed that it controls 110,000 acres in California and the Southwest. That land has a capacity to generate 11,000 megawatts - enough solar electricity to supply nearly 15 million homes at peak output. The cost of maintaining leases on those lands stands at $12.9 million, according to the filing, and BrightSource, which has lost a cumulative $177.3 million since its founding, has total debt and contractual obligations totaling $1.8 billion. Despite its impressive pipeline of projects and prominent investors, BrightSource acknowledged in the filing that its viability turns on the completion and operation of Ivanpah, which will deploy 170,000 heliostats around three towers.

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