GRAND VIEW, Idaho -- It's a first for Idaho. The state's very first solar power plant of any significant size should be built soon and go online as early as January.

The developer of the Grand View Solar One 10-megawatt plant tells the Associated Press they should start construction in the next few weeks. The plant will go in a 180-acre field west of Mountain Home. According to their contract with Idaho Power, millions of dollars worth of solar panels and other equipment has been delivered, and is awaiting installation.

Thanks in part to federal tax incentives, the project is moving ahead. Grand View Solar has paid almost $1.3 million in security and construction deposits to Idaho Power.

Grand View Solar One is scheduled to come online no later than January 12th, 2013, said Stephanie McCurdy with Idaho Power.

McCurdy says this is a big step up in solar from the company just buying back power generated by panels on people's homes. When it comes online, Grand View Solar One will be the largest solar project connected to Idaho Power's system.

McCurdy says Idaho Power will pay an average of about $97 per megawatt-hour over the 20-year duration of the contract. That's relatively high. However, Idaho Power gets federal tax credits to buy alternative energy like solar. So that should offset the increased cost and hopefully won't affect ratepayers. But Idaho Power wouldn't predict where rates might go by next year.

Other alternative energy developers, particularly those planning wind farms on Idaho's gusty Snake River plain, have struggled, as the state Public Utilities Commission considers rule changes pushed by utilities, including Idaho Power, that make it tougher for them to secure financing. Utilities complain renewable projects are driving up customers' rates.

By contrast, Grand View Solar One is advancing after benefiting from a sales agreement with Idaho Power in June 2010, when terms were more attractive. Again, federal tax incentives helped, too.

The project was bought by an Albany, N.Y. company in June 2011, after its founders, Robert Paul, of Desert Hot Springs, Calif., and Peter Richardson, a Boise-based energy lawyer, completed initial legwork.

The project's progress notwithstanding, solar power's future in Idaho has faded considerably from the past years' optimism. Another developer, Interconnect Solar, had its 25-year sales agreement with Idaho Power canceled after failing to post security to ensure it would deliver power on time.

Natural gas prices are at historic lows, making sun-generated energy too expensive despite plummeting solar panel prices.

That's also hurt businesses that install small systems on homes or businesses, said Curt Gamel, sales manager at Meridian-based Solar Concepts, which focuses on solar lighting. There's not a lot going on in terms of lining people's houses with solar, Gamel said recently.

And Paul and Richardson, with three additional utility-scale solar developments in the works, are locked in a dispute with Idaho Power over who should own their renewable energy credits, or RECs. Utilities in a dozen states will pay millions of dollars for RECs to help satisfy requirements to buy electricity from alternative sources.

But Paul said Idaho Power wants him to surrender his projects' RECs without compensation before it signs a power purchase agreement.

That's called extortion, he said.

Idaho Power's Bowlin counters that its customers should be entitled to all of the benefits they're paying for, and that includes the renewable energy credits because federal law requires the utility to purchase renewable energy.

The Idaho PUC has yet to resolve the dispute. Depending on its outcome, Paul believes his three projects will be Idaho's last big solar developments for years to come.

It's very difficult for a developer, even if he could produce power for free, to go in there and make a project work, he said. When you talk to the financiers, they're very leery of Idaho because of the certainty they need. I was back at a conference in Orlando, Fla. When you say 'Idaho,' they go, 'Whoa.'

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