The US solar energy industry took a big leap forward last week after energy giant Pacific Gas & Electric (PG&E) inked deals with two "utility-scale" photovoltaic (PV) solar farm projects to procure up to 800MW of renewable energy, enough to power almost quarter of a million homes.

The company said it had signed up to buy 550MW from Topaz Solar Farms, a subsidiary of thin film solar cell manufacturer OptiSolar working on a 1.1GW project in California, alongside a similar deal to procure a further 250MW from High Plains Ranch II, LLC, a subsidiary of PV specialist SunPower Corporation.

Currently, the bulk of solar farm projects focus on solar thermal technologies whereby solar panels are used to heat water, creating steam to drive turbines.

However, the emergence of new thin film PV cell manufacturing techniques are helping to lower production costs for the technology and Jack Keenan, chief operating officer for PG&E, said that the two deals underlined the extent to which PV is now a viable alternative for more established forms of renewable energy.

Hailing the contracts as "landmark agreements", Keenan insisted that they " signal the arrival of utility-scale PV solar power that may be cost-competitive with solar thermal and wind energy".

The company said it expected power delivery from the High Plains Ranch project to begin in 2010, with the facility fully operational by 2012. In contrast, the Topaz project is expected to come online by 2011 with full delivery scheduled for 2013.

However, there is one fly in the ointment in the form of the uncertainty regarding the continuation of US renewable energy tax credits. The tax break scheme is due to lapse at the end of the year and attempts to renew the scheme have been repeatedly blocked by US legislators amid wrangling over how the tax credits are to be funded.

PG&E said that "both projects are contingent upon the extension of the federal investment tax credit for renewable energy and processes to expedite transmission needs", further highlighting the extent to which investment in US renewables projects could be badly hit next year in the event that the tax credits are allowed to lapse.

In related news, the Spanish solar sector has received a boost with the announcement late last month that General Electric and investment firm Grupo Corporativo Landon are to plough $350m (£188m) into solar project developer Fotowatio.

The Spanish company, which has almost a gigawatt of capacity in operation or development in Spain, Italy and the US, develops both solar PV and solar thermal projects and plans to use the cash injection to fund new projects.

Under the terms of the deal, GE Energy Financial Services will invest $235m (£126m) in return for a 32 per cent stake in the firm, while Grupo Corporativo Landon will provide $118m (£63m) in funding in return for 17.5 per cent. The remaining 50.5 per cent will be retained by the existing investors with venture capitalists Qualitas Venture Capital holding a 33.5 per cent stake and Fotowatio's management holding the remaining 17 per cent.

Fotowatio chief executive Rafael Benjumea said that the company would also look to work closely with GE to access its expertise in the development of solar modules and steam turbines.