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$4.5 Billion in Loans To Support Three First Solar Projects

Plans for three separate large-scale solar projects in California have received a significant boost with conditional loan guarantees totaling about $4.5 billion.

The announcement from the Department of Energy will give investors federal backing and sets in motion three installations totaling more than 1,300 megawatts (MW) of capacity to be developed by Arizona-based First Solar, which plans to eventually sell the projects. The developments in the Mojave Desert, Riverside County and San Luis Obispo County are expected to all be online by 2015.

The large-scale installations are projected to add 1,400 jobs in California during peak construction. First Solar will provide its Cadmium Telluride (Cd-Te) thin-film PV modules for the projects from a new manufacturing plant that has begun construction in Mesa, Ariz., as well as from its recently expanded manufacturing plant in Perrysburg, Ohio.

According to First Solar spokesperson Alan Bernheimer, the company will double its manufacturing capacity from 1.5 GW at the beginning of 2011 to nearly 3 GW by the end of 2012. The existing factory in Ohio employs 1,200 people, and the new Arizona factory will employ another 600 workers. About 400 to 500 workers will be needed to build the factory.

“This is good for American companies, American jobs, American independence,” said Bernheimer.

The company also hopes that federal backing like this will give investors confidence in a still emerging industry.

“The projects could have been difficult to finance and to have built [without the DOE],” said Bernheimer. “There are just not that many on this scale. Once plants this size are established, the capital market will be less leery and it won’t require federal assistance.”

The DOE loan comes from a portion of the federal stimulus package designed for renewable energy infrastructure. But the ARRA money won’t be there for much longer, and uncertainty abounds as Congress considers the debt ceiling and the size of the federal budget.

The current programs help, says Bernheimer, and they remain vital in the current climate. But they won’t be needed forever.

“We see [the loan and the three projects] as a bridge to get us to a point when markets can support projects without subsidies,” he said.

According to a DOE press release, the projects include:

Antelope Valley Solar Ranch: $680 million

The 230-MW project will be located in the Antelope Valley area of the Western Mojave Desert, approximately 80 miles north of Los Angeles. The project is expected to generate 350 construction jobs and will feature a utility-scale deployment of inverters with voltage regulation and monitoring technologies that are new to the U.S. market. DOE and First Solar say the inverters enable the project to provide more stable and continuous power, increasing the efficiency and reliability of large-scale solar power plants greater than 100 MW. Power from the Antelope Valley Solar Ranch 1 project will be sold to Pacific Gas & Electric Company.

Desert Sunlight: $1.88 billion

The 550-MW project is expected to generate 550 jobs during construction and will be located on land managed by the Bureau of Land Management in eastern Riverside County. The Desert Sunlight project is expected to use 8.8 million First Solar modules. Project construction will take place in two phases. Phase I will build 300 MW of PV capacity, which will be sold to Pacific Gas & Electric Company, and Phase II will include 250 MW of capacity to be sold to Southern California Edison. The $1.88 billion in loans that are partially guaranteed by the DOE will be funded by a syndicate of institutional investors and commercial banks led by lead lender and lender-applicant, Goldman Sachs Lending Partners LLC, which submitted the project under the Financial Institution Partnership Program (FIPP), and Citibank N.A. as co-lead arranger.

Topaz Solar: $1.93 billion

The 550-MW project is expected to generate 500 jobs during construction and will be located in eastern San Luis Obispo County. The Topaz Solar project will use more than 8.5 million Cd-Te modules. Power from the project will be sold to Pacific Gas & Electric Company. The $1.93 billion in loans that are partially guaranteed by the DOE will be funded by a syndicate of institutional investors and commercial banks led by lead lender and lender-applicant, The Royal Bank of Scotland plc, which submitted the project under the Financial Institution Partnership Program (FIPP).

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