Archive for distributed generation

Senate Vote Tentatively Removes Worst of AB 2145

Yesterday’s Senate Vote Tentatively Removes Worst of AB 2145
Late yesterday Assembly Bill 2145 that would crush Community Choice was amended and approved by the Senate Energy, Utilities, and Communications Committee. Amendments stripped out the worst of the proposed law.

  • The opt-in provision – the biggest worry – was reversed back to opt-out.
  • “Community” was tentatively defined as three contiguous counties to counter the momentum to restrict a Community Choice program to one county.
  • Any city or county that passes a resolution or ordinance prior toDec. 31, 2014, will be grandfathered.

Work on the bill continues as it treks through the State legislature.

Kudos to all who contributed to stopping this bad bill. The enormous upwelling of opposition statewide temporarily blocked the investor-owned utilities like PG&E that are pushing AB 2145. (Photo above shows staff member Woody Hastings as he speaks at yesterday’s press conference at the Capitol.)

The fight isn’t over! Updates and other information are available onwww.no2145.org.

And kudos to The Press Democrat that recently published an editorial and a Close to Home opposing AB 2145:
“Don’t Change the Law on Sonoma Clean Power
“Utilities Attacking Choice Again” by Mark Landman & Natasha Granoff

Solar facility that could power 500 Marin homes

By Janis Mara, Marin IJ

20140621__MIJ-SOLAR-0622~1

 

 

 

 

 

 

 

 

 

Roy Phillips, president of REP Energy, leads a tour of an abandoned quarry on June 9 in Novato. His company, REP Energy, wants to build a solar energy facility at the site near the McIsaac Dairy west of Novato. The quarry, no longer in use, was mined for the mineral serpentine, a source of asbestos. (Frankie Frost — Marin Independent Journal)

A proposed solar facility just outside Novato that could generate enough electricity to power more than 500 Marin homes is up for approval at the Marin Planning Commission meeting Monday.

Located on the isolated grounds of a former rock quarry, the solar farm would have 4,272 solar panels up to 6 and a half feet high on 11.5 acres of the 952-acre quarry. The $6 million project would generate 1.98 megawatts of electricity, delivered to Marin Clean Energy via nearby power lines.

The quarry was once mined for serpentine rock, which contains asbestos. Quarry operations shut down in 1990.

Installations like the solar project “are a good way to use formerly disturbed locations” like the quarry, said Andrew Campbell, the executive director of the Energy Institute at Haas, a research and teaching facility at the University of California at Berkeley.

Campbell said the proposed location also was beneficial because it is close to the people who would use the energy.

“Having the generation close to an area where consumers are also has benefits, since some power is lost when it is transmitted over long distances,” the executive director said.

The site is west of the city of Novato, east of Stafford Lake and about a mile north of Novato Boulevard. It is not visible from the road. County staff has recommended that the permit be granted, with some qualifications.

Crawford Cooley and Beverly Potter, who own the former quarry, would lease the land to San Rafael-based Danlin Solar, along with San Rafael-based REP Energy. Those two companies would own and build the solar installation.

“That’s a pretty typical arrangement,” Campbell said.

“Solar is a green energy source, no doubt about it. There is no pollution or greenhouse gas emitted at the place where you are generating the power,” the executive director said.

“This would be quite a win if it happened. The people who are very concerned about seeing beautiful agricultural land taken up with solar panels have a valid point. You’d hate to lose a lot of natural Marin. That makes this an ideal project because it’s sitting in an abandoned quarry essentially on bare rock,” said Bob Spofford, vice president of Sustainable San Rafael.

“Solar is in some ways the most ideal of all alternative energy because it doesn’t make noise, it doesn’t pollute, it produces power close to the time when it’s most needed, and it does not harm wildlife,” said Spofford.

Addressing Spofford’s last point, “Photovoltaic panels definitely do not kill birds,” said Michael D. McGehee, a Stanford University associate professor and a senior fellow at the university’s Precourt Institute for Energy. McGehee teaches classes on solar cells. Wind turbines such as the ones at Altamont do pose a danger to avian life, perhaps causing some to confuse the effects of this alternative energy source with those of solar, McGehee said.

No letters of opposition to the project had been received by the staff by Friday.

The state Office of Mines Reclamation and the Department of Public works oversaw the reclamation of the land since the 1990s, according to the county staff report. The project is exempt from the California Environmental Quality Act because it will not cause environmental impacts, the staff report said.

“My job is to work with clients to help them avoid environmental impacts,” said Dana Riggs, a project biologist with San Rafael-based WRA Environmental Consultants. “We planned it (the project) in a manner to avoid impacts on sensitive resources including species and habitat,” Riggs said.

If the permit is granted, construction could begin as early as mid-August and wrap up by November, according to Frank Gobar of Danlin Solar.

Proposed Novato solar facility could power 500 Marin homes

MIJ-L-SOLAR-0610-01

Planning commissioners, environmentalists, a city official and members of the public clambered over the rocks at an isolated quarry northwest of Novato Monday, touring a proposed solar facility that could generate enough electricity to power more than 500 Marin homes.

The tour had moments of comedy, as when the breeze from a nearby dairy farm wafted over the group of about 25 people. The quarry was once mined for serpentine rock, which contains asbestos. Quarry operations shut down in 1990.

Crawford Cooley and Beverly Potter, owners of the former quarry, applied for a permit for 4,272 solar panels up to 6 and a half feet high on 11.5 acres of the 952-acre quarry. The $6 million project would generate 1.98 megawatts of electricity, delivered to Marin Clean Energy via nearby power lines.

If approved, it would be the largest source of renewable energy originating in Marin. The second-largest would be Marin Clean Energy’s existing installation at the San Rafael Airport.

“Since this is an old quarry, it (the solar farm) seems like an ideal use of a property that does not lend itself to any other applications. It’s tucked away from everything,” said Frank Gobar. His company, San Rafael-based Danlin Solar, along with San Rafael-based REP Energy, would own and build the solar installation, leasing the land from the owners.

The site is west of the city of Novato, east of Stafford Lake and about a mile north of Novato Boulevard. County staff has recommended that the permit be granted, with some qualifications.

The planning commission is holding a public hearing on the matter June 23 to get public input and decide whether to grant the permit. Monday’s tour gave the commissioners a chance to see the place up front, close and personal.

If the permit is granted, construction could begin as early as mid-August and wrap up by November, according to Gobar.

“I think it’s a great idea, a great way to generate jobs,” said John McEntagart, a Sonoma County resident, who attended the tour. “Local workers, local hire.” McEntagart said he has friends and family in Marin.

The state Office of Mines Reclamation and the Department of Public works oversaw the reclamation of the land since the 1990s, according to the county staff report. The project is exempt from CEQA because it will not cause environmental impacts, the staff report said.

“My job is to work with clients to help them avoid environmental impacts,” said Dana Riggs, a project biologist with San Rafael-based WRA Environmental Consultants. “We planned it (the project) in a manner to avoid impacts on sensitive resources including species and habitat,” Riggs said.

Novato City Councilwoman Pat Eklund attended the tour Monday. She said she felt the solar project was a policy issue.

Solar developer Roy Phillips does paperwork before leading a tour of the site of a proposed solar energy facility on Monday in Novato. He uses a solar

Solar developer Roy Phillips does paperwork before leading a tour of the site of a proposed solar energy facility on Monday in Novato. He uses a solar panel for a table. His company, REP Energy, wants to build the facility on an abandoned quarry near the McIsaac Dairy west of Novato. (frankie frost — marin independent journal)

“This field trip reinforces for me that there needs to be a county policy on when solar units are put in the natural landscape versus the built environment,” Eklund said.

“When you put solar on a roof, that area has development on it already. So it has less of an impact on the environment. Whereas if you put solar in open space or on a farm, it causes more environmental impacts than if you put it over a parking lot or on a building,” Eklund said.

“It could have significant visual impact if it was on a more visible piece of property. Fortunately, that piece of property is a little insulated,” said Eklund. “For me, that’s a policy issue that needs to be decided before major solar farms are installed in our natural environment.”

“The Marin Conservation League has adopted some standards for solar in general,” said Susan Stompe, a member of the board of directors of the League, an environmental group, who also attended the tour.

“Our concern, as with Green Point, is that the county should have an ordinance to define what the requirements should be, and now they are processing another proposal” for a solar installation, Stompe said. “We would prefer that they adopt an ordinance.”

Such an ordinance would be easily two years in the making and would likely kill the present proposed facility.

Green Point was a proposed solar energy farm that was denied a permit by county supervisors in August 2013 when neighbors lobbied vigorously against it based on what they deemed the unattractive appearance of the solar panels.

“Don’t get me wrong, I’m for green energy, but I don’t want a solar farm in my backyard,” said David McLaughlin, one of about 100 neighbors who attended the supervisors’ meeting at which that facility was defeated.

JCM Capital Launches $10,000,000 Solar Development Capital Fund for FIT Projects in Ontario, Canada

TORONTO, Apr 24, 2012 (BUSINESS WIRE) — JCM Capital (JCM) announced today that they have launched a $10 million solar development capital fund that will invest in early-stage photovoltaic (PV) projects installed on large commercial and industrial buildings across Ontario, leveraging the Province’s Feed-in-Tariff (FIT) program. The aim of the fund is to target application-ready projects to be submitted into the upcoming Ontario Power Authority’s (OPA) application window, and as such, assist with early-stage development costs such as FIT application fees, structural engineering assessments, FIT security deposits and grid connection impact assessment (CIA) costs. The fund will also invest in Ontario-based FIT contracted projects that have not yet reached commercial operation.

CEO of JCM, Christian Wray stated that despite the recent changes to the Province’s Green Energy Program, the fund will ensure that necessary capital is available for quality projects that meet the requirements of the revised FIT 2.0 program. “JCM has and will continue to support the small to mid-size solar market in Ontario with the belief that our investment in distributed solar power generation will provide the maximum benefit to all stakeholders. The fund creates a unique solution for local PV development companies that have few options when funding early-stage projects that require significant risk capital.” Wray also noted that JCM has a strong track record in working with solar developers in Ontario and looks forward to partnering with and supporting other experienced developers as the program continues.

To date JCM has successfully deployed over $5 million of development capital, enabling the advancement of an initial 20MW commercial rooftop solar portfolio. When completed, the aggregate construction costs of this initial portfolio will exceed $80 million and will offset approximately 20,000 tons of harmful C02 from being released into the earth’s atmosphere – the equivalent of planting 2 million trees or removing 60,000 cars from the road.

The fund will also help create further jobs in accordance with the Province’s Green Energy Act initiative.

For more information, please visit www.jcmcapital.ca

About JCM Capital (JCM)

JCM Capital is a financial advisory company that focuses primarily on financing and the co-development of solar energy projects in Ontario, Canada. The Company provides commercial solar energy developers early-stage development capital and/or equity financing solutions for ‘construction-ready’ and operational solar projects while offering strategic and project management support. Current portfolios include rooftop and ground-mounted projects spanning from Southwestern to Eastern Ontario. The Company is looking to expand it’s reach through the cultivation of new partnerships and associations.

SOURCE: JCM Capital

Thiele Solar Proposal Included In NY-Sun Initiative Announced By Governor

Sag Harbor – New York State Assemblyman Fred W. Thiele, Jr. (I, D, WF-Sag Harbor) applauded Governor Andrew Cuomo for establishing a solar feed-in tariff plan for the Long Island Power Authority (LIPA), similar to the one he proposed in 2009, as part of his NY-Sun proposal to increase the generation of solar power in New York State.

Thiele stated, “If we are to be truly energy independent and reduce energy costs on Long Island, we must provide incentives to encourage the production of solar and other alternative sources of energy. The establishment of a feed-in tariff program is a market-based strategy to do just that. Rather than provide cash rebates to install solar, here LIPA would pay an incentive for the power produced by solar power to encourage the development of solar infrastructure.”

Thiele’s proposal, first introduced in 2009, would have directed LIPA to establish a feed-in tariff program. Under the Thiele proposal, LIPA would have been authorized to purchase up to 100 megawatts of electricity under the program. Thiele’s bill set an initial tariff of 32 cents per kilowatt hour and a 20 year contract for solar producers. LIPA could adjust the tariff due to market conditions no more than once every two years.

Under the proposal announced by LIPA and the Governor last week, 50 megawatts would be purchased by LIPA and the tariff would be 22 per kilowatt hour.

Thiele stated, “Not only will this program encourage the rapid and sustainable development of electricity from renewable sources, it will create green jobs on Long Island. The German solar energy industry created over 50,000 jobs in less than five years, with the entire renewable energy industry creating as many as 200,000. More than 25,000 solar energy workers are employed in Spain. In Gainesville, Florida, a surge of capital investment in community solar systems has been experienced and local contractors have been hiring to meet demand. A solar feed-in tariff program will provide a simple and transparent means for solar investments to earn reasonable and reliable returns, allowing capital to flow into clean and renewable energy systems. My only reservation is that LIPA may have initially set the tariff too low to encourage investment. Hopefully, they will adjust to market conditions to make the program successful.”

From the office of Assemblyman Fred Thiele

Suntech Weathers Turmoil in Solar Industry

by Aaron Back
Wall Street Journal

China-based Suntech, the world’s largest producer of solar panels, hasn’t been immune to turmoil in the industry world-wide, but the company’s founder and chief executive, Shi Zhengrong, believes increasing consolidation in the sector will buoy large players.

Dr. Shi is a foreign-educated solar scientist. He earned a Ph.D. in electrical engineering from the University of New South Wales in Australia in 1992, and gained Australian citizenship. From 1995 to 2001 he was research director and executive director of Pacific Solar Pty. Ltd., an Australia-based maker of solar components.

Associated PressShi Zhengrong, founder and chief executive of Suntech Power Co. Ltd.

The solar industry globally has fallen on hard times, beset by falling subsidies in Europe, a key market, and global overcapacity for solar panels and their components. In a recent high-profile case, the German government has been in talks with the solar industry to begin monthly reductions in feed-in tariffs, the fixed price at which solar energy is purchased. U.S. trade authorities are also investigating complaints of alleged dumping of solar panels on the U.S. market by Chinese producers, including Suntech.

Dr. Shi has said he sees consolidation of the sector ahead, which could benefit large players like Suntech. Still, the company has been vulnerable to forces buffeting the industry. Suntech posted a $116 million loss in the third quarter, compared with a year-earlier profit of $33.3 million, hurt by a foreign-exchange loss due to volatility in the euro and dollar exchange rates. The company said it expects to post revenue of between $3 billion and $3.1 billion for 2011, up from $2.9 billion in 2010.

Dr. Shi talked with Aaron Back in Davos, Switzerland. The following interview has been edited.

WSJ: You earned a Ph.D. in Australia and took an Australian citizenship. How did this experience shape your management philosophy?

Mr. Shi: I spent 14 years living in Sydney, Australia. When I first went to Australia I was 23 years old. I was a young man. I did my Ph.D. with professor Martin Green, and to be honest, before that I never thought I could be a good scientist.

After [finishing my Ph.D. in] 2.5 years, record time at the University of New South Wales, and afterwards working in the laboratory for about 2-3 years, based on my patents together with the professor, we were able to raise about $50 million to start a spinoff company called Pacific Solar, and I was appointed as deputy research director. So that was actually very important for my career in a way. Before, my background and research specialty was on laser physics, and that really changed my specialty to solar.

WSJ: So was it something of a coincidence that you became involved with solar technology?

Dr. Shi: It was a coincidence for me to come to know professor Martin Green. I knocked on his door at 5 p.m. to ask him for a job. So then I said “I don’t want a full-time job, I just want something like part-time research assistance or something.” So then he said, “OK, come in.” So we started chatting, and he knew my background, he knew I had masters degree, I think based on the credentials of other Chinese students he guessed I was at least above average. That’s how I got into solar.

WSJ: Has your dual role as a Chinese entrepreneur and an Australian citizen been key to your success?

Dr. Shi: I think it’s extremely important for Suntech. If you look at our culture and DNA, a lot of things have to do with my experience in Australia. I got to know Western culture a lot, their way of thinking, their way of doing things. Of course I also kept the essence of Chinese culture, if you look at the style of management in the company, we’re really multinational with a global management team. For our regional sales and operations, we really depend on local culture, local faces and local language to really represent Suntech. And also, because as we know, Australia has leading technology in crystalline silicon solar cell technology, so that also gives us a leading position in research and development and innovation.

WSJ: You’ve said recently that the solar sector will face consolidation. How do you see this playing out?

Dr. Shi: If you look at China there are probably more than 1,000 companies in this sector, but at this moment, 50% at least have either shut down production or partially ended production. Whether they are going to shut down permanently or whether there will be some M&A I think all depends. You know, Chinese companies have very strong survivability. So it all depends on how long this situation will last. But the market consolidation is already happening. If you look at 2011 Q2 and Q3 figures, the top six manufacturers (globally) had 55% to 60% of market share. But in 2010, it was only about 25%. So it’s already happening because customers care more about brand, R&D, sustainability, service and so on.

WSJ: But are you yourself going to go out and buying any struggling rivals? Is that something you would consider?

Dr. Shi: Not really, but we are open-minded to seize any opportunity that fits with our strategy…Anything is possible.

WSJ: Germany has recently cut its solar feed-in tariffs, and it seems around the world in this era there is less money for solar subsidies. So what does that mean for you?

Dr. Shi: Well, I think its natural and it’s the way it should be. If you look at the [German Renewable Energy Act] initiated by the German government in 2004, that was just trying to help the industry to create a market. So once you have a market, industry will innovate and try to reduce costs. So in the last few years, costs have come down so dramatically…The law was designed to reduce feed-in tariffs annually, say once a year maybe around 10%, but in the last two years, apart from this annual reduction, there were additional 15% feed-in tariff cuts. So that gives you an idea—there’s an accelerated reduction of feed-in tariffs, due to accelerated reduction of solar panel costs.

WSJ: Late last year, some U.S. solar-panel manufacturers asked for anti-dumping investigations against Chinese rivals, including Suntech. Where do you think this is headed?

Dr. Shi: Unfortunately it’s a lose-lose situation. Nobody wins: The U.S. government, U.S. consumers, and the solar industry are all losers in this game. We believe the accusation is not true.

If there’s a tariff or trade war, it would really be a big setback for the industry…Because of [a possible tariff] many projects that were realistic due to reduced prices become impractical because the economics doesn’t work anymore. What does that mean? It means, you will lose jobs. I think in the U.S. currently there are about 150,000 people employed in the solar industry. Globally around 800,000, with 300,000 in Europe. For every 10 jobs we create in factories, there will be 15 jobs created downstream, in installation, financing, project development, distribution.

Write to Aaron Back at aaron.back@dowjones.com

Résumé

Education: Ph.D. in electrical engineering from the University of New South Wales (1992)

Career: Pacific Solar Pty. Ltd. research director and executive director (1995-2001)

On antidumping investigations: “If there’s a tariff or trade war, it would really be a big setback for the industry…Because of [a possible tariff] many projects that were realistic due to reduced prices become impractical because the economics doesn’t work anymore.”

Spain suspends FITs

28. January 2012 | Top News, Applications & Installations, Industry & Suppliers, Global PV markets, Markets & Trends | By:  Oliver Ristau

In a surprise move, the Spanish Council of ministers has implemented a temporary suspension of the renewable energy feed-in-tariffs (FIT) for new installations in Spain.

Spanish flag

No further renewable energy projects, which includes photovoltaics, will receive FITs.

Solarpack

As a reaction to the financial crisis in the Mediterranean country, the new Spanish government, under Prime Minister Mariano Rajoy, has approved a new law, by which the current system of remuneration for renewable energies will be discontinued.

As the Council of Ministers announced on Friday, the government won’t give any economic incentive to fund new renewable installations, and the relevant administrative and funding systems will be suspended.

While it was said that the suspension will be temporary, the government did not disclose any timeframe for when the FITs may be resumed.

In a statement released, it argued that “to maintain the current system of remuneration is incompatible to the current economic crisis.” It did stress, however, that the new measures will not be retroactive. They won’t effect “either the installations in operation, or those that are already registered.”

New British and Malaysian FIT Programs Launch

World First–British Feed-in Tariffs for Renewable Heat

Solar DHW Tariff Scheduled for Fall 2012

Malaysia Seeks 1,250 MW of Solar Photovoltaics by 2020

December 4, 2011

By Paul Gipe

Two innovative feed-in tariff programs launched last week. Malaysia methodically stepped into the fray of developing countries moving aggressively toward renewable energy. Meanwhile, despite the Eurozone’s debt crisis, strikes, and turmoil in its FIT program for electricity, Britain quietly launched a groundbreaking program to pay feed-in tariffs for renewable heat.

Regardless of uncertainty in world financial markets, the launch of these long-planned, long-discussed programs indicates that the march toward more countries using feed-in tariffs to develop renewable energy continues undiminished.

The British program, dubbed the Renewable Heat Incentive (RHI), for non-domestic generators opened for applications on Monday November 28, 2011. Malaysia opened their electronic doors to applications December 1, 2011. Both programs expected a flood of applications.

Britain’s RHI

For the first time, a program will pay for the heat generated by solar panels. Britain’s RHI will pay £0.085/kWh ($0.13/kWh) for metered heat from solar thermal systems up to 200 kW in size. The program will also pay £0.043/kWh (~$0.07/kWh) for heat from ground-source heat pumps less than 100 kW in size, and £0.03/kWh (~$0.05/kWh) for heat pumps greater than 100 kW.

The original program proposed to pay £0.18/kWh ($0.28/kWh) for heat from residential-scale solar domestic hot water systems. Implementation of the residential heat program has been delayed to October 2012.

 

Malaysia’s Advanced Renewable Tariffs

Unlike some developed countries, Malaysia launched a full-featured program of Advanced Renewable Tariffs from the start. The tariff schedule is fully differentiated by technology and size, and includes bonus payments for locally manufactured products.

The ambitious program expects to develop more than 3,000 MW of new renewables by 2020, of which more than one-third will be from solar photovoltaics alone. Biomass will contribute another one-third.

 

DECC: Renewable Heat Incentive

Malaysia Adopts Sophisticated System of Feed-in Tariffs

What’s New on Feed-in Tariffs

By Paul Gipe

 

  • Pakistan Regulator Seeks Approval of Feed-in Tariffs for Wind–Feed-in tariffs for wind energy have been submitted to the Water and Power Ministry from Pakistan’s National Electric Power Regulatory Authority (NEPRA). NEPRA has proposed a novel two-tier system of tariffs depending upon ownership. Pakistan will pay foreign wind developers less than domestically-owned companies. . .
  • Maldives May Launch Solar Feed in Tariff–The Maldives, an Indian Ocean archipelago of 300,000 inhabitants, may be moving towards a system of feed-tariffs for solar photovoltaics (solar PV). . .
  • Updated Tables of Feed-In Tariffs Worldwide–Updated tables include Pakistan, Sri Lanka, and suggested tariff in the Maldives. . .
  • Palo Alto Proposes Limited Solar Feed-in Tariff–Palo Alto’s municipal utility has proposed a limited feed-in tariff program for solar photovoltaics (solar PV) only. . .
  • Reuters: Green energy sector cheers Ontario election result–Ontario’s renewable energy industry breathed a sigh of relief on Friday and manufacturers looked forward to a surge in demand after voters in the province returned the Liberal Party to power, albeit without a majority. . .
  • Tyler Hamilton: Liberals re-elected in Ontario: Green Energy Act and feed-in-tariff program live on–Happy to report that the re-election of the Ontario Liberal government last night means the province’s landmark Green Energy Act, which gave birth to the continent’s first comprehensive Euro-style feed-in-tariff program, has survived its first major challenge. The opposition Progressive Conservative party vowed to scrap the FIT program if elected and neuter the green energy legislation that has brought billions of dollars of investment to Ontario, thousands of jobs, and a new economic pathway for a province that needs to reinvent itself for the 21st century. . .
  • Summary of Sophisticated Sri Lankan Tariffs–In 2010, Sri Lanka launched a sophisticated program of feed-in tariffs. Sri Lanka now has some of the highest feed-in tariffs for wind, hydro, and biomass in the developing world. . .
  • Snapshot of Feed-in Tariffs around the World in 2011–[Updated 10/06/11] Feed-in tariffs are the world’s most popular renewable energy policy mechanism. Despite the economic recession, more and more jurisdictions are turning to feed-in tariffs to spur not only renewable energy development but also industrial development and the attendant jobs that it creates. . . The following article is a snapshot of where feed-in tariffs are being used, and the prices that are being paid. While extensive, this article is not comprehensive. It does not include every tariff for every technology in every jurisdiction, but it does give a flavor for the breadth of this policy mechanism with the odd name. . .

 

Spurned By DOE, First Solar Hunts For Solar Farm Buyer

By Cassandra Sweet and Ryan Tracy

-DOE says First Solar is not eligible for $1.9 billion loan guarantee for 550-megawatt Topaz solar farm

–First Solar says it is in “advanced talks” with potential buyers of the Topaz facility

–Shares close down 9% at $66.85, lowest level seen in more than four years

(Adds response from Royal Bank of Scotland in 9th paragraph.)

First Solar Inc. (FSLR) said Thursday that the Department of Energy will not provide a loan guarantee to help finance construction of a large California solar farm, but the company is in “advanced discussions” to sell the project.

The Tempe, Ariz., solar-panel maker and solar-farm developer said that the DOE informed the company that there was not enough time to process the company’s $1.9 billion loan guarantee application for the 550-megawatt Topaz solar farm to meet a statutory Sept. 30 deadline for closing the transaction.

“We weren’t able to meet the requirements in time for the deadline,” First Solar spokesman Ted Meyer said in an interview. He added that the company was in “advanced talks with potential buyers” to sell the solar power plant and would “utilize a different transaction structure that does not require a DOE loan guarantee.”

Meyer declined to name the potential buyers or provide details on the sale.

The DOE’s disqualification of First Solar’s Topaz project loan guarantee comes as the department faces intense scrutiny following the bankruptcy of solar-panel startup Solyndra Inc., which obtained a $535 million loan guarantee and a $527 million government loan to build a factory in Fremont, Calif. Solyndra is the subject of a federal criminal probe into whether the company misled the government in connection with the 2009 loan guarantee. It filed for bankruptcy protection earlier this month.

The loss of the Topaz loan guarantee sent First Solar shares tumbling 9% to close at $66.85, their lowest close in more than four years.

In June, the DOE offered First Solar conditional commitments of guarantees for $1.93 billion in loans to help finance the Topaz solar farm. Royal Bank of Scotland Group PLC (RBS.LN, RBS) and a group of unnamed institutional investors and commercial banks agreed to make the loans, which were to be guaranteed by the DOE.

It was unclear whether RBS planned to abandon the project or work on a new financial package with different terms.

An RBS spokesman said the bank declined to comment.

A DOE spokesman declined to comment directly on the department’s disqualification of First Solar’s loan guarantee for the Topaz project, but said that closing such transactions is a rigorous process.

“We have consistently said that we will not close any deal until all of the rigorous technical, legal, and financial review has been completed,” said the DOE spokesman, Damien LaVera. “Failure to close a loan application does not indicate that a project doesn’t have merit or a strong business case to succeed, but rather that all of the extensive due diligence and legal documentation simply cannot be completed by Sept. 30.”

First Solar has two conditional loan guarantees still pending, a $1.8 billion guarantee for a 550-megawatt solar farm in Riverside County, Calif., called Desert Sunlight, and a $680 million guarantee for a 230-megawatt solar farm in Lancaster, Calif., called Antelope Valley.

Company spokesmen declined to comment on the outlook for obtaining loan guarantees for the remaining projects. Some analysts expressed hope that First Solar would snag the latter two loan guarantees, although they acknowledged that investors remained jittery following the Solyndra bankruptcy.

“The Solyndra fallout has created a black cloud around the company that is unlikely to clear until projects are announced as sold,” said Jesse Pichel, an analyst at Jefferies Group.

First Solar obtained a $967 million loan guarantee for the 290-megawatt Agua Caliente solar farm in Yuma County, Ariz., which the company sold to NRG Energy Inc. (NRG). PG&E Corp.’s (PCG) San Francisco-based utility has signed a long-term contract to buy the output from the facility, which currently is under construction.

Together, the four projects are expected to create about 1,750 construction jobs and 53 permanent jobs, and generate enough electricity to serve about 470,000 homes.

In July, First Solar obtained a key construction permit to build the Topaz solar farm on previously disturbed land in San Luis Obispo County, California. PG&E has signed a long-term contract to buy the output from the Topaz facility.

In August, two local citizens groups filed a lawsuit against the Topaz project with the San Luis Obispo Superior Court. The groups did not file a request for an injunction that could delay construction, allowing the company to start building anytime.

First Solar initially planned to start construction on Topaz Sept. 30 to qualify for the loan guarantee. But the company said Thursday that it does not have a timetable for starting construction.

The company is likely to start construction for most, if not all, its shovel-ready projects by Dec. 31, when a key government incentive for renewable energy projects currently is set to expire.

Pending DOE loan guarantees must be closed and construction must be started on funded projects by Sept. 30, under Section 1705 of the Energy Policy Act of 2005.

Copyright © 2011 Dow Jones Newswires