A bit of background on this invention: the concept was patented by Phillip R. Carlson in 1975. The patent was titled "Power generation through controlled convection (aeroelectric power generation)". Research and engineering work towards a practical system was done by Professor Dan Zaslavsky of the Technion in Israel, together with several other collaborators around the world. They published a detailed paper on the subject in 2001. The research continued and was updated over the course of the following eight years. Although working prototypes were proposed, finding serious investment capital was always the obstacle.
The first company to follow through and build a commercial solar tower is Solar Wind Energy, Inc. In that sense the company is pioneering, since the success of the San Luis, Arizona project will no doubt generate wide interest and serious investors from around the world for similar projects in places with suitable climates, thereby kickstarting the technology.
In the long run and taking into account the capital and running costs, the electrical power supplied by an "energy tower" costs about one third that of a plant run on fossil fuels. Wikipedia has a decent overview here: http://en.wikipedia.org/wiki/Energy_tower

The proposal is a perpetual motion machine in effect.... good luck with that!
however well done to them for blagging over 1.5 million out of an investor!
"In this way, the company claims the system can generate electricity 24 hours a day, 365 days a year" so on a winters night I can expect this white elephant to be keeping me toasty warm?
and finally...
685 m high!!!! How much carbon would be emitted from the production of the concrete alone in its construction!

The concept is certainly new and it is great to see new ideas being developed in this industry. I have concerns regarding the performance stated, though. The air will only be cooled down so many degrees, and all the energy harvested comes from the added density of the air mass inside, so it can be easily calculated. It is kind of an inverted hot air balloon, only it is a continuous process that creates a certain pressure difference at the bottom to drive the turbines. The shape of the tower does not appear logical in this context, and the turbine setup looks not very much sophisticated, which makes me wonder how well thought out this overall concept actually is. Also, I wonder how much water needs to be pumped up the tower, and how great the difference in potentioal energy of the water pumped up and the air streaming down will finally be. It could well turn out to be a nice scheme tailored only for accessing public subsidies.

People already complain about wind turbines - me included - heaven knows what they'll make of these blots on the landscape. Six hundred and eighty-five meters tall and almost as wide at its base! How long before some advertising clown has them covered with messages persuading us to buy this, holiday there, or do whatever? What on earth would Wordsworth make of a host of golden bill boards?
If it weren't for the Green nuclearphobes, we would be well into a LFTR 'Manhattan' type of project by now, and given the urgency of the energy supply situation, possibly even have operational prototypes. It would only be a small step from there to having production lines producing small modular reactors, which would mean that not only would we not need devices such as these, we would also not need the supporting grid whose pylons serve to further spoil the environment to an unacceptable extent.
LFTR power generation, being local, very local, and not requiring copious amounts of water, could be sited wherever suits the local requirements best, probably in a unit or two on an industrial park. We could then phase out the water cooled nuclear reactors and all the problems they pose, most of all, the availability of suitable uranium. (Thorium is a waste product of rare earth mining and the mines would supply for free as it is a problem for them to dispose of.)
Heaven help us if we have to rely on these scaled up, look alike, inverted, vending machine beakers scattered about the countryside as if dropped by some giant litter-lout. Technically feasible they may be, harmonious with the environment they most definitely are not.

I think this is a better idea
http://www.gizmag.com/enviromission-solar-tower-arizona-clean-energy-renewable/19287/
It works on temperature differential rather than absolute temperature which allows it to be built almost anywhere.
it also requires no water and no electricity to generate power.
No pollution, it only emits hot air.

As parts of America are currently suffering from record droughts, and the potential is for the climate to get worse, would this be a good, efficient, use of the surrounding water resource that could be used for humans/crops? Obviously this is dependant upon the consumption by the tower.
If the output is 1,250 MWh on sunny days but a yearly average would work out to approximately 435 MWh then the winter output must therefore be much less than the average of 435 MWh. What makes up the winter shortfall in generation?
The technology looks fascinating and I hope a full size tower is constructed as we must fully investigate every source of clean electrical generation technology but should make sure that we don't create a potential of causing another problem in doing so.

It would be interesting to know what percentage of water is lost through evaporation. I would have thought that water would be at a premium in hot dry desert conditions, and probably better used for growing crops.
An alternative idea would be to have a tower painted black. This would heat up in the sun, and the air inside would naturally rise upwards. Fans fitted at the base would work to generate electricity, but no water is required.
The estimate for the amount of electricity generated is probably rather generous I would feel, and the capital cost of building must be quite high, with all those fans and generators requiring maintenance.

On a hot day, the wind created from it that comes out the bottom would be welcomed by those who are hot and need some sort of breeze.

I have to agree with other comments. Using water to generate the downdraft is silly. Especially with the EnviroMission using essentially the same structure, but not requiring the waste of water.
The only place I could see this being useful is when the generation location is close to the ocean and seawater could be used. These locations tend to not have "hot dry air" though so the evaporation would be less dramatic and cooling less noticable.

@ martinkopplow,
It is shaped like a Venturi to maximize the speed of the airflow to drive the turbines. Still, it would be interesting to see if a pilot plant could live up to all expectations.
@ FabianC,
Solar tower works only when there's daylight and batteries may be needed to store excess.