DOE Issues First Loan Guarantee for Solar Project in California
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An item of interest today for energy insiders and loan guarantee applicants out of the U.S. Department of Energy:
In the lunch hour today, the U.S. Department of Energy (DOE) announced that it has signed a conditional agreement with Fremont, California-based Solyndra, Inc. for a $535 million loan guarantee for the construction of a commercial-scale solar panel manufacturing plant.
According to DOE, Solyndra’s photovoltaic systems are designed to provide the lowest installed cost and the highest solar electricity output on commercial, industrial and institutional roof tops. Solyndra’s proprietary design transforms glass tubes into high performance photovoltaic panels which are simple and inexpensive to install.
This is significant because it is the first of what we hope will be many loan guarantees announced this year. As outlined in our energy Blueprint for lawmakers last year, we at the Institute believe these guarantees are a critical tool to bring new technologies to the marketplace and should be expanded beyond the $42.5 billion in authority available today. Funded by fees levied on the applicant, these loan guarantees do not require the use of taxpayer dollars unless the company defaults on the loan. It’s a no brainer as long as there is a robust process to ensure that a project is sound.
Established in Title XVI of the Energy Policy Act of 2005, the loan guarantee program housed at DOE enables government to share some of the financial risks in the most promising new energy projects that avoid, reduce, or sequester air pollutants and greenhouse gases. The program’s history includes a DOE solicitation in August 2006 inviting companies to submit pre-applications for up to $2 billion in loan guarantees. DOE received 143 applications requesting more than $27 billion in loan guarantee protection. Solyndra, Inc. was one of 16 pulled from this pre-application pool and invited by DOE in October 2007 to submit a full application.
Provided the company meets its obligations, this project would create up to 1,000 construction and 3,000 operations jobs in California as well as add to the growing renewable energy industry in the United States.