Bethesda, Md.-based Lockheed Martin [1] (NYSE: LMT [2]) and Greenwich, Conn.'s Starwood Energy Group Global said today they would team up to work on utility scale solar generation projects in North America.

Starwood Energy is the energy investment arm of private equity firm Starwood Capital Group Global.

Under the agreement, Lockheed Martin will be responsible for engineering, procurement, manufacturing and systems integration, with Starwood Energy arranging long-term power purchase agreements, site selection, permitting, and providing construction and permanent debt and equity financing.

"Significant demand is growing for utility-scale solar generation projects of over 50 megawatts capacity in the United States," said Chris Myers, vice president of Business Development at Lockheed Martin's Maritime Systems and Sensors business.

"We believe that Lockheed Martin's proven capabilities in systems integration, engineering and precision manufacturing will allow us to drive down the costs of these projects, while better assuring the achievement of performance standards and delivery schedules desired by utilities, regulators and other stakeholders," said Myers.

The two companies estimate that up to 10,000 MW of solar power could come on line in the next 10 years, a potential $30 billion market.

"Despite its enormous potential benefits, utility scale solar generation historically has remained difficult to finance because the industry lacked what we believe are Lockheed Martin's best strengths -- achieving large-scale production while actually lowering costs," said Madison Grose, vice chairman of Starwood Energy Group.

Lockheed Martin and Starwood Energy said they plan to initially focus on the solar generation needs of California and the Southwest U.S.