SolarCity Loan Guarantee Rejected by U.S. in Wake of Solyndra’s Bankruptcy
SolarCity Corp.’s loan guarantee may have been undone by the bankruptcy of Solyndra LLC.
SolarCity, a Foster City, California-based developer of residential rooftop solar systems, said yesterday that the U.S. Energy Department won’t complete the $275 million conditional guarantee that was offered a day after Solyndra sought protection from creditors.
The Energy Department loan guarantee program has come under political fire since Solyndra, a Fremont, California-based solar company that received $535 million in guarantees, filed for bankruptcy Sept. 6. SolarCity said the scrutiny prompted the agency to request additional information.
“Because of the Solyndra bankruptcy, additional documentation and reviews were required that we couldn’t get done in the next five days,” SolarCity Chief Executive Officer Lyndon Rive said in an interview yesterday. “Everyone has been very supportive of this project and if we had a little more time we could get it done.”
The Energy Department “will be unable to finalize their approval” for the loan guarantee before a Sept. 30 deadline, the company said yesterday in a letter to Representative Fred Upton, a Michigan Republican and the chairman of the House Committee on Energy and Commerce.
Energy Department Response
The Energy Department has not changed its requirements, Damien LaVera, a department spokesman, said in an e-mailed response to questions.
“All of the extensive due diligence and legal documentation simply cannot be completed by Sept. 30,” he said. “The questions surrounding the Solyndra application had no impact on other applications, including this one.”
Still, in a letter to Energy Secretary Steven Chu Sept. 22, Senator Lisa Murkowski, an Alaska Republican, asked what immediate steps the department was taking to “avoid the mistakes that appear to have been committed with respect to Solyndra.”
SolarCity’s conditional loan guarantee, which was offered Sept. 7, would have supported 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.
The Energy Department had offered to guarantee 80 percent of a $344 million loan to support the project. The loan was to be provided by USRG Renewable Finance, an affiliate of US Renewables Group LLC, in partnership with Bank of America Corp.
The loan guarantee was necessary to make the initiative profitable, as SolarCity expands upon an initial installation at a military base in Arizona in 2009.
Other Applications Pending
The agency still has conditional approvals valued at as much as $6.4 billion for nine projects that it’s trying to complete before the end of the month. It approved three of them yesterday.
Poet LLC, the largest U.S. corn-based ethanol producer, received final approval of a $105 million loan guarantee for its first commercial cellulosic ethanol plant, the Sioux Falls, South Dakota-based company said in a statement. The facility in Emmetsburg, Iowa, will convert corncobs, leaves and husks into 25 million gallons (95 million liters) of ethanol a year.
Ormat Technologies Inc. closed $350 million in backing from the agency to build a 113-megawatt geothermal power plant in Nevada.
Granite Reliable Power LLC, a subsidiary of Brookfield Asset Management Inc., received a $168.9 million loan guarantee for a 99-megawatt wind farm in northern New Hampshire. Power from the project will be sold to Central Vermont Public Service and Green Mountain Power. The wind farm will use 33 Vestas Wind Systems A/S 3-megawatt wind turbines.
First Solar Guarantees
First Solar Inc., the largest provider of thin-film solar panels, said Sept. 22 that its 550-megawatt Topaz Solar Farm in California won’t receive a $1.9 billion guarantee because the Tempe, Arizona-based company can’t meet the Sept. 30 deadline.
First Solar has conditional commitments for two other solar farms it’s developing, a $680 million guarantee for a 230- megawatt project and a $1.8 billion guarantee for a 550-megawatt project, according to the Energy Department’s website. The company received a $967 million guarantee for a project in Arizona in August.
To contact the reporter on this story: Christopher Martin in New York at email@example.com
To contact the editor responsible for this story: Reed Landberg at firstname.lastname@example.org