A Palo Alto start-up called Ausra said Monday that it has raised $40 million to develop, build and operate solar power plants.

The money comes from Silicon Valley venture-capital clean-technology heavyweights, Khosla Ventures and Kleiner, Perkins, Caufield & Byers. Both Vinod Khosla and Ray Lane of KPCB are on Ausra's board.

Ausra was formed in 2006. Former University of NSW Researcher, Company founder and chairman David Mills created its system, called Compact Linear Fresnel Reflector technology, in the early 1990s. Ausra's technology uses flat mirrors that follow the sun to heat water, which then makes steam to turn turbines and thus create electricity.

"Economic development around the world, coupled with recognition that carbon emissions must rapidly be eliminated, has created an enormous market opportunity," said Lane in a statement.

John O'Donnell, the company's executive vice president, said Ausra is "quite optimistic about the size" of the solar market. Mills will present a paper in China next month where he'll forecast that solar power plants can generate 90 percent of the energy needs in the United States, O'Donnell said.

Increasingly, he said, solar power is becoming cost competitive with natural-gas plants and will reach that stage with coal-fired plants in a few years.

"Historically, the American electric power industry has moved very rapidly with new technologies that met (the right) price point," he said.

According to the company's Website, it intends to build solar plants that can generate from 100 to 500 megawatts of power. The rule of thumb is that one megawatt can provide the electricity for 750 homes.

Ausra has a test project operating in Australia, will start another project in Portugal this year and has "a project in the permitting phase in central California." More information about that 175-megawatt facility, including its exact location, will be released "quite soon," O'Donnell said.