Administration Offers Its First Loan Guarantee to Solar Company

In case anyone is still doubting the Obama administration’s commitment to renewable energy, the Department of Energy offered its first loan guarantee in four years, worth $535 million, to Fremont, California-based solar company Solyndra, Inc. last Friday. Solyndra, a commercial solar panel installer whose photovoltaic panels use cylindrical modules to convert sunlight, will use the loan guarantee to build a commercial scale solar panel manufacturing plant in California that the DOE says will create approximately 3,000 jobs during its construction, over 1,000 once it becomes operational and hundreds more to install the panels themselves.

Not all is set in stone, however. Although Energy Secretary Steven Chu signed a “conditional commitment” on Friday, the deal still needs to pass the departmental credit review board for it to finalize. As a loan guarantee is not the same thing as a loan—rather than directly lending Solyndra federal money, the DOE is assuring that it will assume the debt obligation if Solyndra defaults on it—the company needs to make sure to have some form of equity on hand, though this is presumably not a problem if the DOE and Solyndra have already come this far in their agreement. (Don’t mean to be a Debbie Downer, but there is a recession.) Sources conflict over who is funding this venture: Solyndra’s press release stipulates that the government is providing the $535 loan, whereas the Reuters article above insists that the DOE is not providing the actual loan. (Any web detectives able to verify who the backer is?) In any case, the loan is set to finance 73 percent of the construction costs, and the loan guarantee is granted under Title XVII of the Energy Policy Act of 2005 and is funded as part of the stimulus package. If the deal is finalized, construction for the plant will commence later this year, with initial production in late 2010 or early 2011.

With Chu making the allocation of federal loans to energy projects a priority, I expect we’ll see some more news about federally-funded clean tech projects in coming weeks. And while I can’t predict with certainty whether or not the administration will be able to fulfill its pledge of doubling renewable energy production in three years and of generating ten percent of U.S. electricity from renewable sources by 2012, I’m certainly willing to bet on it. (But let’s not make the stakes too high, because I’m a destitute college student.) Any takers?

Vito Buonomano III Said,

September 23rd, 2011 @1:00 pm

The Obama Administration tried to take on the massive nuclear and fossil fuel industry when it took office. This administration has had success and failure in the last two years. The failure has been from the political power and money these two industries have accumulated in the last 100 years. No carbon tax means many forms of renewable energy are not able to compete in a free and open market.
Anyone that has the nerve to call their efforts point less and a waste of the tax payers money is ill informed.
Trillions of tax payer dollars has been given to the nuclear and fossil fuel industry from 1973 to present. For example any economist will tell you the true cost of a gallon of gasoline is about double what we currently pay at the pump. These trillions of dollars does not include the human suffering from two Middle Eastern Wars and Middle Eastern Terrorism on our own soil.
So I am sure the nuclear and fossil fuel industry right now are licking their chops with the recent failure of a solar company in CA . They are also saying their is no future in renewable energy and anyone with half a brain knows this is simply not true. Clean coal seems to be their new buzz word and any high school scientist will tell you it does not exist. You will never hear about the billions of the tax payers money wasted on this pie in the sky clean coal concept make the headlines in any major news paper in the USA. What I find amazing is how top corporate officers in the fossil fuel industry are so willing to lower their professional standards at the expense of future generations on our planet.
Finally the nuclear and fossil fuel industry recent success will be short lived because of climate change, job loss from foreign oil and peak oil. They can influence Washington and fool some of the American Public their way is the only way but in the end we will all come to our senses and all cast our votes for renewable energy.