The U.S. Energy Department finalized loan guarantees for two major solar projects today, as the deadline loomed for the government's renewable-energy incentive program.
The government wrapped up deals that would back $737 million in financing for a solar thermal plant sponsored by privately held SolarReserve and $337 million in financing for a Sempra Energy photovoltaic solar project.
With funding for the government's loan program set to expire at the end of the week, investors have been watching to see what deals will be completed before time runs out.
The loan program has faced intense scrutiny after the high-profile collapse of Solyndra, a solar-panel maker that was the first company to receive funding under the program.
Republican lawmakers investigating the Solyndra loan guarantee have raised concerns that the Obama administration may rush to complete loans to meet the program's deadline.
SolarReserve Chief Executive Kevin Smith, however, said the government had conducted an extensive review of its application.
"We have been in the (Energy Department's) loan guarantee program for over two years," Smith told Reuters. "It's been a very rigorous activity."
SolarReserve's planned 110-megawatt plant about 14 miles northwest of Tonopah, Nev., would supply enough electricity to power 43,000 homes and create 600 jobs during construction plus 45 permanent jobs once completed.
Noting that standard financing normally takes about four to six months, Smith said the department's "due diligence was unparalleled in commercial markets."
Smith said that with 100 percent of the electricity from the plant already sold for 25 years, there was no market risk for the output of the facility.
Time winding down
While the SolarReserve plant will use molten-salt energy storage technology, the 150-megawatt Arizona plant sponsored by Sempra will rely on more-traditional photovoltaic solar generation.
Still, the department said Sempra's Mesquite Solar 1 project in Maricopa County would be one of the first utility-scale photovoltaic plants in the country to use transformer-less and liquid-cooled inverter technology, which is supposed to improve energy output and cut operating costs.
The Mesquite plant will use solar modules made by China's Suntech Power Holdings, and a portion of those modules will come from its manufacturing plant in Goodyear, Ariz., a Sempra spokesman said.
The plant could power nearly 31,000 homes and will support up to 300 construction jobs.
With the government incentive program coming to a close, at least two pending applications failed to make it to the finish line.
Last week, SolarCity, a solar-panel installer, said it would not meet the deadline to complete its loan guarantee because increased paperwork required since the congressional probe stalled the application.
First Solar also said last week it would miss the deadline for one of its conditional loan guarantees, which would have funded a solar power plant in California.
After the close of the SolarReserve and Sempra deals, there were six pending applications awaiting final decisions.