NEW YORK/SAN FRANCISCO: The US Energy Department approved $4.75 billion in loan guarantees for four solar energy projects on the final day of a 2005 programme funded by the stimulus act. Projects being developed by ProLogis, SunPower, and First Solar won US support, and First Solar and SunPower immediately sold theirs.
The guarantees come at the end of a month in which the Energy Department's programme became the focal point of a political scandal, said Brett Prior, an analyst at GTM Research in Boston. The shift came after Solyndra, a solar company that received $527 million in backing through the same programme, closed its doors August 31.
"It's been very successful, and in fact the only rap against the programme until recently was that it was moving too slowly," Prior said in an interview yesterday. "Lenders always assume some risk and Solyndra was a tiny portion of the overall programme."
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 programme, which was funded by Obama's 2009 stimulus legislation, and the largest for any manufacturer. It filed for bankruptcy September 6.
Solyndra's failure prompted congressional scrutiny of the programme. 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 yesterday 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 yesterday in an interview. "We need a much bigger programme to really expand domestic manufacturing and compete with Asia."
Not all the conditional guarantees were completed before the deadline expired.
SolarCity, 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 programme to install 160,000 rooftop photovoltaic systems.
First Solar, the largest maker of thin-film solar panels, said on September 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 yesterday's deadline.
In addition to the two yesterday, the company won a $967 million guarantee for a project in Arizona in August.
First Solar received 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 yesterday on its website.
The solar company immediately announced that it had sold Antelope Valley to Exelon, while NextEra Inc. and General Electric 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, the world's biggest warehouse owner, received a partial guarantee covering 80 per cent 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. It didn't give the price.
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