New Hampshire, U.S.A. — Friday’s deadline is looming and the Department of Energy finds itself racing against both the clock and intense political pressure.
There were two major announcements later in the day Wednesday. The Solar Reserve Crescent Dunes project in Nye County, Nev., received a $737 million loan guarantee to support a 110-MW molten salt concentrated solar power tower generating facility that would include about 10 hours of thermal energy storage. If built, the project would be the tallest molten salt tower in the world and the first in the U.S. The DOE also approved $398 million for Mesquite Solar 1, a 170-MW PV plant in Maricopa County, Ariz.
The final days of activity come as the department fends off criticism about the loan program. At stake is more than $7 billion dollars of loan guarantees that await final approval under Section 1705 of the federal program. In a flurry of activity, the DOE has been closing deals throughout the month for geothermal and wind projects, as well as advancements in solar technology. Final approvals were awarded for the 250-MW Mojave Solar ($1.2 billion) development, which utilizes concentrating solar power (CSP) technology, and the 30-MW Cogentrix ($90.6 million) high concentration photovoltaic project in Colorado.
But what about traditional PV developments, which dominate the pipeline of planned large-scale projects in the United States? Some of the largest CSP projects have even recently switched to PV to take advantage of a steady decline in module prices. Yet, five of the six completed DOE deals for solar power generation have thus far gone to CSP technology.
As of late Wednesday, the DOE had yet to close on 9 projects under Section 1705. The program has closed on more than $11 billion in loan guarantees, but it still has billions on the table, almost all of which would be for large-scale PV projects. And time is running out.
First Solar has already said it would not meet the deadline to go forward with the largest of the solar power generating projects — a $1.93 billion deal for the Topaz development. The PV thin-film giant said last week that it was hopeful that its other two projects totaling about $2.5 billion would close by Friday.
It’s likely that some of these other developments will receive final approval by Friday’s deadline. But DOE public affairs specialist Bill Gibbons said Tuesday that the department could not say how many would close and when they would be announced. He did indicate that the applications filed under Section 1705 could transfer to the 1703 program.
The PV projects that have yet to receive final approval include: First Solar Topaz in San Luis Obispo County, Calif. (550 MW); First Solar Antelope in Lancaster, Calif. (250 MW); First Solar Desert Sunlight in Riverside County, Calif. (550 MW); Fotowatio Renewables in Las Vegas (20 MW); Prologis Project Amp (733 MW in 28 states); Solar City’s SolarStrong (371 MW in 33 states); and California Valley Solar Ranch in San Luis Obispo, Calif. (250 MW).
That’s a lot of future capacity that could be decided in the next few days. And it promises to alter the approach many of these companies take on planned developments that are far larger than anything on the ground anywhere in the world.
One Company’s Approach
SolarCity said it received word last week that the DOE — under increasing scrutiny after the Solyndra fiasco — would not be able close on a deal to provide a partial guarantee for a $344 million loan to support the SolarStrong Project. Under the deal, SolarCity would have installed, owned and operated up to 160,000 rooftop solar installations on as many as 124 U.S. military bases in up to 33 states. SolarCity expected the project to fund approximately 750 construction jobs over five years and 28 full-time operating jobs.
Jonathan Bass, Communications Director for SolarCity, said Tuesday his company remained hopeful that it would close on the DOE loan, but that a smaller version of the SolarStrong project would go ahead even without the federal backing.
“Without the loan guarantee, we would not do projects in some states — in some of the places with little or no solar investment to date,” said Bass. “That would be the unfortunate thing. We still believe it could be a very significant project. We could have made solar work [in some of those states] with this project, but we think it offers too many benefits to abandon.”
SolarStrong would push ahead in the states where it already has a presence (Arizona, California, Colorado, Oregon, Texas, Maryland, New Jersey, New York, Pennsylvania, Massachusetts and Washington, D.C.). It would, though, cancel plans to operate in places like the Southeastern U.S., which has strong solar potential but relatively few installations.
SolarCity last week sent a letter to the office of Rep. Fred Upton, the Michigan Republican who heads the House committee investigating the Solyndra bankruptcy, requesting that his office work to extend the Friday deadline. That letter touched off a bit of uncertainty about who could extend the DOE process, especially considering that Upton himself had earlier written to the DOE asking if the department had authority to move the deadline.
In a letter from DOE Executive Director Jonathan Silver to Upton last Friday, the answer was clear: The department cannot extend that deadline, and it would have to be done through Congress. A message left with Rep. Upton’s office about the possibility of an extension had not been returned by mid-day Wednesday.
In the earlier letter, Upton seemed to support pushing back the deadline in an effort to keep the DOE from forging ahead with a flurry of loans without proper review. Among the considerations cited by Upton was the private money that has been spent to secure the loans. The DOE said in its letter that much of this money could be lost if the loans are not closed. In SolarCity’s case, this represents about $3 million.
Upton’s role in leading the hearings targeting Solyndra and the loan program has increasingly come under scrutiny. The long-time supporter of domestic oil drilling and critic of EPA regulations has questioned the loan program’s role in “picking winners and losers.” But recent reports have detailed Upton’s request for Section 1705 loan support for renewable programs in his state. On Tuesday, the DOE announced that it had closed two loans under a different section of the program that would guarantee about $4 million to the Michigan auto industry, including $2 million to General Motors. Earlier, Michigan was among the beneficiaries of a $5 billion guarantee to Ford that will help boost fuel efficiency and upgrade factories.