Bloomberg News

U.S. Closes $4.75 Billion in Solar Power Loans on Final Day

September 30, 2011

Sept. 30 (Bloomberg) -- The U.S. Energy Department approved $4.75 billion in loan guarantees for four solar energy projects on the final day of a 2005 program funded by the stimulus act.

Projects being developed by ProLogis Inc., SunPower Corp., and First Solar Inc. won U.S. support, and First Solar and SunPower immediately sold theirs.

The guarantees come at the end of a month in which the Energy Department’s program became the focal point of a political scandal, said Brett Prior, an analyst at GTM Research in Boston. The shift came after Solyndra LLC, a solar company that received $527 million in backing through the same program, closed its doors Aug. 31.

“It’s been very successful, and in fact the only rap against the program until recently was that it was moving too slowly,” Prior said in an interview today. “Lenders always assume some risk and Solyndra was a tiny portion of the overall program.”

During a May 2010 visit to its factory, President Barack Obama said Solyndra showed “the promise of clean energy.” The Fremont, California-based company received the first guarantee under the Energy Department’s program, which was funded by Obama’s 2009 stimulus legislation, and the largest for any manufacturer. It filed for bankruptcy Sept. 6.

Congressional Scrutiny

Solyndra’s failure prompted congressional scrutiny of the program. Republicans on the House Energy and Commerce Committee said the White House applied pressure to expedite the company’s guarantee, and have used its failure to tar both the loan guarantee program and Obama’s efforts to promote the renewable energy industry as an economic driver.

The four projects approved today join 25 solar, wind and geothermal companies that have won more than $11.4 billion in loan backing for projects from Maine to Hawaii, including Solyndra, which borrowed $527 million against its $535 million guarantee.

“The loan guarantees have scored a lot more positives than negatives and will create a lot of jobs as the projects start moving,” Sanjay Shrestha, an analyst at Lazard Capital Markets in New York, said today in an interview. “We need a much bigger program to really expand domestic manufacturing and compete with Asia.”

Not all the conditional guarantees were completed before the deadline expired.

SolarCity Corp., a Foster City, California-based developer of residential rooftop solar systems, last week said it wouldn’t be able to complete the $275 million conditional guarantee it received a day after Solyndra filed for bankruptcy.

The financing would have supported rooftop solar installations on military housing and office buildings in as many as 33 states. SolarCity was planning a $1 billion, five- year program to install 160,000 rooftop photovoltaic systems.

First Solar Projects

First Solar, the largest maker of thin-film solar panels, said Sept. 22 that its 550-megawatt Topaz Solar Farm in California wouldn’t get a $1.9 billion guarantee because it couldn’t meet the loan’s conditions by today’s deadline. In addition to the two today, the company won a $967 million guarantee for a project in Arizona in August.

First Solar received today guarantees of $646 million for its 230-megawatt Antelope Valley Solar Ranch 1 project, in Los Angeles County, and $1.46 billion for its 550-megawatt Desert Sunlight plant, in Riverside County, the Energy Department said today on its website.

Projects Sold

The solar company immediately announced that it had sold Antelope Valley to Exelon Corp., while NextEra Inc. and General Electric Co. purchased Desert Sunlight. Exelon said it will invest as much as much as $1.36 billion in Antelope Valley. First Solar didn’t give a price for the Desert Sunlight sale. The company typically sells the projects it develops, and the guarantees make it easier to find buyers, Alan Bernheimer, a company spokesman, said in an interview.

ProLogis Inc., the world’s biggest warehouse owner, received a partial guarantee covering 80 percent of a $1.4 billion loan to put solar panels on about 750 of its buildings in 28 states. Bank of America Corp. and NRG Energy Inc. are investing in Project Amp, which is expected to have total capacity of 752 megawatts when complete.

SunPower, which is majority-owned by Total SA, received a $1.24 billion guarantee for its 250-megawatt California Valley Solar Ranch project in San Luis Obispo County, and sold it to NRG Energy Inc. It didn’t give the price.

--Editors: Will Wade, Charles Siler

To contact the reporters on this story: Christopher Martin in New York at cmartin11@bloomberg.net; Andrew Herndon in San Francisco at aherndon2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


Coke's Big Fat Problem
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus