Gerard ONeill, noting the problem of high launch costs in the early 1970s, proposed building the SPSs in orbit with materials from the Moon. Launch costs from the Moon are potentially much lower than from Earth because of the lower gravity and lack of atmospheric drag. This 1970s proposal assumed the then-advertised future launch costing of NASAs space shuttle. This approach would require substantial upfront capital investment to establish mass drivers on the Moon. Nevertheless, on 30 April 1979, the Final Report ("Lunar Resources Utilization for Space Construction") by General Dynamics Convair Division, under NASA contract NAS9-15560, concluded that use of lunar resources would be cheaper than Earth-based materials for a system of as few as thirty solar power satellites of 10 GW capacity each.
In 1980, when it became obvious NASAs launch cost estimates for the space shuttle were grossly optimistic, ONeill et al. published another route to manufacturing using lunar materials with much lower startup costs. This 1980s SPS concept relied less on human presence in space and more on partially self-replicating systems on the lunar surface under remote control of workers stationed on Earth. The high net energy gain of this proposal derives from the Moon's much shallower gravitational well.
Having a relatively cheap per pound source of raw materials from space would lessen the concern for low mass designs and result in a different sort of SPS being built. The low cost per pound of lunar materials in ONeills vision would be supported by using lunar material to manufacture more facilities in orbit than just solar power satellites. Advanced techniques for launching from the Moon may reduce the cost of building a solar power satellite from lunar materials. Some proposed techniques include the lunar mass driver and the lunar space elevator, first described by Jerome Pearson. It would require establishing silicon mining and solar cell manufacturing facilities on the Moon.