Solyndra Fallout Extends to DOE Loan Guarantee Program
Solyndra’s Aug. 31 bankruptcy came exactly one month before the sunset of Section 1705 of the DOE’s loan guarantee program. For a number of companies rushing to secure their loan guarantees, the timing couldn’t have been worse.
In February the House Energy and Commerce Committee had begun an investigation into whether Solyndra deserved its $535 million loan guarantee. Once it fell, the committee, led by Rep. Fred Upton (R-Michigan), pounced, warning the DOE not to rush when finalizing conditionally approved projects. The DOE listened.
In the end, seven of nine projects squeezed through a beefed-up vetting process before the program’s Sept. 30 close. Four major projects, including two First Solar PV farms (combined 880 MW), Prologis’ 752-MW “Project Amp” and SunPower’s 250-MW California Valley Solar Ranch, made it through in the eleventh hour.
But one First Solar development and SolarCity’s unique “SolarStrong” project ran out of time.
First Solar’s 550-MW Topaz project, in San Luis Obispo County, Calif., had been awarded a $1.93 billion loan guarantee in June. After forgoing the guarantee due to the time constraint, the thin- film giant began negotiations to secure private financing, which will conceivably carry higher interest rates.
SolarCity was in the same pickle. “Because of the Solyndra bankruptcy, there are additional oversight requirements to make sure that everything is approved and approved and then approved again,” said Lyndon Rive, SolarCity’s CEO, in a phone interview.
In mid-September, the solar leasing company had announced it would bring PV to 160,000 residential rooftops on as many as 124 u.S. military bases in 33 states. The 371-MW project received a partial guarantee of $275 million. The total cost was estimated at more than $1 billion. Rive explained that portions of SolarCity’s project depended on the guarantee. Without cheap capital, he said SolarCity would have to exclude a number of states from the project — because electricity rates were too low.
At press time, the fate of SolarStrong was undetermined.