DOE Loan Guarantees Left At The Altar

The sun set on the federal government’s Section 1705 loan-guarantee program for renewable-energy development on Friday, with the U.S. Department of Energy (DOE) closing four deals – three for big solar-power plants and another for a 28-state rooftop-to-grid project – worth more than $4 billion. But while there were last-day winners, there were also losers, as four conditionally guaranteed projects that were on the DOE’s Section 1705 scoreboard Friday morning had disappeared by nightfall.

The two biggest of the four to fail: First Solar’s Topaz solar plant in California, and SolarCity’s SolarStrong project to put solar power on the roofs of military housing around the nation. Neither’s fate was a surprise; First Solar revealed on Sept. 22 that it had been told Topaz wasn’t going to clear, and SolarCity made a similar revelation a day later.

loan guarantees, SolarCity

image via SolarCity

First Solar still wants to build Topaz, and probably will if it can find a buyer who can finance the project. That’s what First Solar did with Desert Sunlight and Antelope Valley Solar Ranch One, although those projects did survive the DOE’s vetting and got their loan guarantees. SolarCity, meanwhile, has said it will go forward with the SolarStrong project – but without the $344 million the government was going to partially guarantee, the program will be about a third smaller than planned.

The third financing deal that failed to close was for a 20-megawatt solar photovoltaic plant planned for 25 miles northeast of Las Vegas. The conditional guarantee, valued at $45.6 million, was publicized on June 2 with much fanfare – Senate Majority Leader Harry Reid (D-Nev.) and U.S. Rep. Shelley Berkley (D-Nev.) joined in the announcement. A factor in the loan not being finalized might have been that in early August, the project sponsor Fotowatio Renewable Ventures was acquired by MEMC and its solar subsidiary SunEdison.

loan guarantees, Nordic Windpower

image via Nordic Windpower

Finally, there’s Nordic Windpower. A couple of curious things about this one: The conditional guarantee came in July 2009; and it was for a loan of just $16 million [PDF]. A call to Nordic Windpower’s listed PR contact to find out why the loan had been stuck on conditional for two years went unreturned. But this much we do know: In announcing the conditional guarantee, the DOE had said the funds were intended “to support the expansion of (Nordic’s) assembly plant in Pocatello, Idaho, to produce its one megawatt wind turbine.” (Nordic makes a two-blade turbine that it says is easier to install and maintain and isn’t as noisy as standard three-blade turbines.)

A year later, however, Nordic moved its headquarters from Berkeley, Calif., to Kansas City (accepting a $5.6 million incentive package from the state [PDF]). On its website, the company says assembly also takes place there in the Midwest. So apparently, Pocatello, and the little loan guarantee that might have brought it jobs, just got left behind.

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