In recent days, the Department of Energy has been finalizing a flurry of renewable energy projects ahead of a Sept. 30 deadline for some of its loan guarantees – but one of them won’t be First Solar’s 550-megawatt Topaz project in San Luis Obispo County.
The Arizona company announced Thursday that Topaz would not meet all the requirements for the conditional $1.9 billion loan guarantee the DOE granted it in June. Company officials would not go into details on exactly what requirements were not met, but they stressed this does not mean they are walking away from the project.
“First Solar’s business model is to develop projects and build and operate and maintain them, ” said Alan Bernheimer, a company spokesman. “We’re not in the business of wanting to own them. Typically we bring in equity investors and potentially some debt around the time construction starts.”
The company is in talks with investors and looking at other debt options to move the project forward without the loan guarantee, he said.
Bernheimer also said that First Solar is not expecting similar problems for its 550-megawatt Desert Sunlight project, now just beginning construction near Desert Center. It received a $1.88 billion conditional loan guarantee in June.
The company also has a third project, its 230-megawatt Antelope Valley solar ranch, in the pipeline for a $680 million DOE loan guarantee.
Is the Topaz situation yet another ripple in the ever-widening impact of the Solyndra bankruptcy and congressional investigation?
Bernheimer thinks not. Utility-scale solar projects, such as Topaz and Desert Sunlight, are a different animal from solar manufacturers and the risks to the government and taxpayers are much less.
“These projects have long-term power purchase agreements with utilities,” he said. “The fixed payments are going to be a reliable revenue stream.”
Still, the DOE has to finalize the loan guarantees for Desert Sunlight and Antelope Valley next week — and everyone will be watching.