There are still plenty of skpetics, but the idea of constructing a solar power collecting array in space and beaming the energy back to power stations on earth got a huge boost this week.

California regulators have approved a space-based solar power system for use by Pacific Gas and Electric:

California regulators on Thursday approved a long-term contract between PG&E Corp.’s (PCG) utility and the developer of a speculative technology that would beam 200 megawatts of solar power to Earth from outer space.

Under the 15-year agreement, Solaren Corp., of Manhattan Beach, Calif., will ship 1,700 gigawatt-hours of solar power a year starting in 2016. The power will be sent by radio frequency from an Earth-orbiting satellite to a receiving station in Fresno, Calif. The energy-conversion technology has been used by communications satellites for 45 years on a much smaller scale, Solaren said.

PG&E wouldn’t disclose the cost of the proposed 15-year contract, but said it would be above a benchmark price set by the California Public Utilities Commission that starts at 12.9 cents a kilowatt-hour.

PG&E and other California utilities are required to use renewable sources for a fifth of the power they sell by 2010, ramping up to one-third of their retail power by 2020. The requirements are part of the state’s 2006 plan to combat climate change.

Because Solaren’s technology is experimental and untested, PG&E can’t rely on the contract to comply with its renewable-energy requirements until construction begins on the project and the CPUC gives additional approval, the agency said in its decision.

Shares of PG&E recently traded 1% higher at about $43.80.

Pie in the sky? Some think so:

Hoffert is wary of Solaren’s latest step forward and the company’s promise of delivering 200 megawatts to PG&E utility customers in California by 2016.

Hoffert estimates that Solaren could manage to get about 50 percent transmission efficiency in a best-case scenario, meaning that half of the energy collected by space solar panels would be lost in the transfer down to Earth.

Solaren would then need to launch a solar panel array capable of generating 400 megawatts. The total launch weight of all the equipment would be the equivalent of about 400 metric tons, or 20 shuttle-sized launches, according to Hoffert.

But Solaren says that it would just require four or five heavy-lift rocket launches capable of carrying 25 metric tons, or about one fourth of Hoffert’s weight estimate. The company is relying on developing more efficient photovoltaic technology for the solar panels, as well as mirrors that help focus sunlight.

“Solaren’s patented SSP [space solar power] system dramatically reduces the SSP space segment mass compared to previous concepts,” Boerman told SPACE.com.

Solaren has not provided details on just how its technology works, citing intellectual property concerns. But it expects that its space solar power can convert to RF energy with greater than 80 percent efficiency, and expects similar conversion efficiency for converting the RF energy back to DC electricity on the ground in California. The company also anticipates minimal transmission losses from the space to the ground.

The technology to accomplish this has been around for more than 40 years, just never attempted anywhere near this scale before.

The way the system is supposed to work is the array - in this case more of a demonstration project than anything - would collect solar energy via its photovoltaic cells and beam the raw energy through the atmosphere using microwaves. An antenna on the ground - called a “rectanna” - collects the microwaves and turns them into DC power.

NASA has been looking at the concept for years, and even contemplated putting a one square mile solar collector in space during the 1970’s. But the engineering problems were too numerous to justify taking the project off the drawing boards.

Solaren’s concept would be considerably smaller but has the potential to generate much more energy per square foot due to a huge improvement in photovoltaic cell technology. Solaren appears to be banking on the fact that improvements in PV technology have been by leaps and bounds in recent years and that, if that trend holds, will see perhaps a 50% increase in the potential energy transfer by 2016.

Other problems:

Space solar power has to deal mainly with expensive launch costs of about $15,000 per kilogram, as well as the huge capital costs of building ground arrays if RF technology is involved. Hoffert has pushed for the laser beaming approach as newly effective cost-cutting measure, and even submitted a proposal with his son to ARPA-E, the U.S. Department of Energy’s new agency.

“The cost to first power doesn’t have to be in the hundreds of billions,” Hoffert said. His proposal includes laser transmission tests on the ground in an NYU lab, and then a space experiment launched to the International Space Station.

Such beaming tests could even provide temporary power to isolated places on Earth along the space station’s ground track, although a true solar space power station would sit in geostationary orbit.

Hoffert approved of Japan’s own space solar power effort, led by JAXA, which would test both RF technology and lasers as means of energy transmission. He envisions the possibility of space solar power becoming commercially viable within a decade — but only if all the science bears out the technology behind private efforts.

“Some of it is physics and engineering, and some of it is business and promotion,” Hoffert said. “But in the long run, you can’t fool Mother Nature.”

Solar panels in space can generate 7 times more energy than ground based systems. This is significant because of one of the dirty little secrets about solar power generated on earth; it takes an enormous amount of energy to make them. Although the exchange rate has improved dramatically (at one time, it was probable that more energy was expended in making a solar cell than the unit would put out in its lifetime), it is now calculated that a single photovoltaic cell “pays” for itself with regard to the energy exchange after about 4 years of use.

Another drawback is the expense of making solar cells in an environmentally friendly way. The toxic sludge generated in making them is among the most difficult to manage for manufacturers but this problem also is getting easier as new eco-friendly processes are developed.

The truth about ground based solar cells is that they will never become an efficient way to generate electricity on a massive scale. They will continue to augment other electricity-generating technologies but even with big improvements in energy efficiency, there is still the problem of clouds to deal with.

This is where the space based systems can find their niche. It is probable that the kind of huge arrays envisioned by science fiction writers are decades away. Until we can get the cost per pound of launching stuff into space down to a few dollars, a satellite measuring in the square miles, generating thousands of megawatts is out of the question. Solarens envisions launch costs of $15,000 per kilogram with a total payload of 400 metric tons.

And this is just baby-sized.

We shall see if Solarens can make this ambitious plan come together. Regardless, it appears that for the first time, we are taking the concept of space based solar power generation seriously. And that can only be good news for our economy and environment.