Solyndra Backlash Blamed for SolarCity Financing Woes
<p>SolarCity said Friday that the Department of Energy won't be able to close a $275 million loan guarantee by its Sept. 30 deadline. The guarantee was to back a massive project that would bring solar energy systems to as many as 160,000 private military residences.</p>
SolarCity's ambitious plan to bring solar energy systems to 160,000 private military residences is hitting a major speed bump because of problems with a federal loan guarantee, according to news reports.
SolarCity was to install, own and operate the solar energy systems at as many as 124 military bases in 33 states. The project, valued at $1 billion, would essentially double the number of rooftop residential photovoltaic systems in the U.S. over the next five years.
Funding was expected to come from US Renewable Group's debt financing arm, which partnered with Bank of America Merrill Lynch to provide $344 million to SolarCity for the project. Eighty percent of the loan was to have been backed by a $275 million DOE loan guarantee. SolarCity said Friday that the Department of Energy won't be able to close the loan guarantee before the program expires on Sept. 30. The loan guarantee was needed to lower the cost of capital for the project.
In a letter [PDF] sent from SolarCity's CEO to House Republicans asking for help in extending the program's deadline, the company blamed the delay on additional paperwork requested in the wake of Solyndra's failure. Fremont, Calif.-based Solyndra had received $535 million in DOE loans but filed for bankruptcy the day before SolarCity was offered its own $275 million loan guarantee.
"Unfortunately, Project SolarStrong, together with the thousands of job-years it would create and the benefits it would bring to our country's military communities, is at risk of becoming an unintended casualty of the controversy over Solyndra," SolarCity CEO Lyndon Rive said in the letter, Reuters reported.
DOE, however, told Bloomberg that requirements for the loan program have not changed. "All of the extensive due diligence and legal documentation simply cannot be completed by Sept. 30," DOE Spokesman Damien LaVera told Bloomberg in an email. "The questions surrounding the Solyndra application had no impact on other applications, including this one."
First Solar also said Thursday it would miss the Sept. 30 deadline to receive a $1.9 billion loan guarantee that was to back a 550-megawatt solar farm in California. But the DOE did finalize other loan approvals last week, including a $105 million loan guarantee for Poet LLC's first cellulosic ethanol plant, a $350 million loan guarantee for Ormat Technologies Inc.'s geothermal power plant, and a $168.9 million loan guarantee for Granite Reliable Power LLC's 99-megawatt wind farm.
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