SolarCity: DOE Loan in Jeopardy Because of Solyndra Investigation

SolarCity officials said late Friday that their contract to install solar panels on military bases in 33 states could be derailed because of the ongoing investigation with the Solyndra bankruptcy.

SolarCity recently announced its $1 billion SolarStrong project, backed by a $275 million Department of Energy loan guarantee, that would allow the company to install 160,000 photovoltaic systems on military bases within the next five years. The program would be the largest of its kind in the United States, and is part of the growing partnership between the renewable energy industry and the military.

According to the company, all the required paperwork was submitted to finalize the loan before the Sept. 30 deadline. But SolarCity received word from the DOE late last week that the department would be unable to process the paperwork because of more stringent requirements set in place after the start of the Solyndra investigation.

The company has sent a letter to Rep. Fred Upton asing for his committee to support extending the deadline. It remains unclear who holds the authority to extend it.

Upton, a Michigan Republican, has been among the most vocal critics of the Solyndra deal and the loan program in general. As chair of the powerful Committee on Energy and Commerce, he counts the electric utilities sector as his biggest campaign contributor. In Michigan, utility-scale solar has made relatively few inroads, and the only two DOE loans that came to his state were for the automotive industry. Upton is also a key member of the Congressional Supercommittee charged with cutting about $1.5 trillion in federal spending.

In a recent letter to Energy Secretary Steven Chu, Upton questioned whether the department could meet its Sept. 30 deadline without hastily pushing loans through the door, as he said had been the case with Solyndra. Upton has requested the department provide information regarding the process of extending the deadline.

In the letter to Upton, SolarCity CEO Lyndon Rive said losing the DOE loan guarantee would be costly to private partners who have already invested in the military program, and the veterans who stand to be hired during construction.

“Project SolarStrong’s structuring and its review by the DOE has required the efforts of more than 100 people, thousands of hours of work, and more than $3 million of investment by our company and our financing partners over the last eleven months. Halting the project will mean sacrificing more than $1 billion of private investment into economically hard-hit military communities throughout the United States.

It would also mean the loss of jobs we believe the project would create, many of which would have gone to veterans and the family members of our active duty military servicemen and women. We believe that the valuable work done to move the SolarStrong project to completion should not be lost because of the Solyndra bankruptcy.”

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