Last weekend, concentrated solar thermal power (CSP) player eSolar heated things up with a major win in China.

The Google (NASDAQ:GOOG)-backed outfit announced that it will license its tower technology to Penglai Electric, which aims to build 2,000 megawatts of power plants by 2021. That's the same megawatt target as thin-film PV titan First Solar (NASDAQ:FSLR) laid out in its own groundbreaking Chinese deal last fall, and this project falls roughly within the same time frame.

This partnership between eSolar and Penglai, "a privately-owned Chinese electrical power equipment manufacturer," is four times as ambitious as the domestic deal struck with NRG Energy (NYSE:NRG) last year. Heading up construction of the plants will be China Huadian Engineering, which is also pursuing utility-scale projects with Suntech Power (NYSE:STP).

We had occasion to talk about concentrated solar thermal just last week, when it came to light that the technology may have performance problems when dust and haze are prevalent. China has more than its fair share of dust and haze, and some very important government officials have voiced skepticism towards large-scale adoption of the technology.

Tim Hanson, writing about the short case for certain overheated Chinese stocks, cited an important rule worth repeating here: "Never, ever invest opposite the Chinese government." It's possible that China will never go wild for CSP as it has for PV solar. There's still good reason for the country's bureaucrats to welcome eSolar's project, though, even if the economics look unattractive relative to what Trina Solar (NYSE:TSL) and Yingli Green Energy (NYSE:YGE) have to offer.

The thinking seems to be that Chinese manufacturing of components, such as the mirrors eSolar uses in its heliostats, could significantly reduce the cost of CSP, making it very cost-competitive with other solar technologies. Even if the conditions prove inhospitable domestically, Chinese exporters of CSP equipment could still find ready markets in other parts of the world. This deal could have just as much to do with market power as it does with electric power. Siemens (NYSE:SI) may soon find that dominating this space will be tougher than it once imagined.

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Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. The Motley Fool has a disclosure policy.