GE Energy Financial Services and renewable energy firms PowerLight and Catavento said Thursday they will build the world’s largest solar plant in Portugal, a sign that solar power is becoming mainstream.

Construction on the 11-megawatt plant will begin in May, and the plant will be completed—and generating power—in January, said PowerLight, the Berkeley, California-based solar-electric power systems integrator that will operate and maintain the plant.

The solar plant is expected to be Portugal’s first.

It will include 52,000 monocrystalline photovoltaic solar modules from a variety of manufacturers, and will be built on a 150-acre hillside in Serpa, said executive vice president Howard Wenger. Serpa is 124 miles southeast of Lisbon and in one of Europe’s sunniest areas.

The project will include PowerLight’s PowerTracker, a technology that tracks the sun throughout the day. PowerLight says the technology generates more electricity than conventional fixed-mount systems. It also says it’s reliable and is ideal for large projects on tracts of land that are otherwise unusable, such as flood plains.

The power will be fed to local utilities and distributed through Portugal’s utility grid to homes and businesses throughout the region, Mr. Wenger said.

The $75-million plant is being financed by Stamford, Connecticut-based GE Energy Financial Services, which will own the facility.

Major Step

“This investment is a major step for GE Energy Financial Services, not only because this is the world’s largest solar photovoltaic plant, but also because it’s our first solar power project in Europe and puts us close to the $1-billion mark in our global renewable energy portfolio,” said Alex Urquhart, CEO of GE Energy Financial Services.

Catavento, a renewable energy company in Lisbon, Portugal, developed the project and will manage it.

“We hope this project clearly demonstrates that solar energy is a promising alternative power source that should be freed from roadblocks,” said Catavento co-CEO Sergio Costa.

The plant is expected to top the current largest, the 10-megawatt, €49.5-million ($62 million) Bavaria Solarpark in Muehlhausen, Germany, which was also designed by PowerLight with modules from Sharp Electronics.

But while 11 megawatts make a large solar plant, it’s a small capacity compared with fossil-fuel-based power plants. According to the U.S. Department of Energy, the average power plant produces about 300 megawatts.

Larger Power Plants

Larger solar projects are also on the way. The Israeli government is building a 100-megawatt solar power plant to supply electricity to homes in southern Israel, and could eventually expand the project to a whopping 500 megawatts.

In February, solar financing company SunEdison and renewable project integrator Powered by Renewables announced they are working on a solar project in Nevada that will total about 18 megawatts.

CEO Jigar Shah said he expects it will be the world’s largest when it opens—“but for how long, we don’t know.” The project is scheduled to be finished at the end of 2007 or early 2008, but that could be delayed, he said. “As with many projects of this size, there are many permutations we have to go through,” he said.

Still, the large projects are signs of confidence, and part of a large story of expansion throughout the solar sector, said CLSA Asia-Pacific analystMichael Rogol. Large deals are being signed all the way through the supply chain, and that’s why people think solar is really taking off, he said.

‘Quilt of Demand’

“Each of them individually doesn’t really matter that much, but when you piece them together, what you see is this stunning quilt of demand for large and small installations globally,” he said. “It’s that quilt that gives a lot of comfort to many people analyzing the sector—that strong, just overwhelming, demand.”

Even Mr. Shah, who might have a reason to tout large projects, says they are only a small part of a bigger story.

“There’s a nationwide change that’s occurred in the last six months around the inevitability of solar,” he said. “At this time, I see a majority coming forward around VC and other capital that solar will be cheaper than conventional electricity in 10 years. It’s no longer a pilot program or a marketing project. People are really using solar energy to reduce their exposure to higher energy prices, and that’s exciting.”