NRG Energy Inc. announced on Monday a deal with eSolar to develop solar power plants with the capacity to power 400,000 homes at sites in California and the Southwest United States.

The project would have a total generation capacity of 500 megawatts and is anticipated to begin producing electricity in 2011.

eSolar's breakthrough modular power plants use more software and less steel to allow solar energy to be competitive with fossil fuels for the first time ever, said Bill Gross, Chief Executive Officer of eSolar in a statement.

The project will be the first solar power plant for NRG Energy, a company that owns and operates a variety of plants powered by natural gas, oil, nuclear and coal.

The company will seek a 30 percent tax credit for renewable energy investments in order to finance the construction of the plants. In addition, the firm will explore loan guarantees from the Department of Energy, NRG's capital and outside investors, Michael Liebelson, chief development officer low carbon technology at NRG Energy told cnet.com.

ESolar provides solar technology using small mirrors which track the sun with high precision and reflect the sunlight to a tower-mounted receiver which boils to create steam. This steam powers a turbine and generator to produce energy.

California Energy Renewable energy Solar energy