Large swaths of sun-drenched desert in the southwestern U.S. have all the markings of a prime spot for utility-scale solar projects. Last year the Obama administration created a “fast track” for proposals to build solar projects in certain areas managed by the Bureau of Land Management in a handful of western states. But the process is far from fast enough, according to some in the solar industry.
Rhone Resch, who leads the trade group Solar Energy Industries Association, said in a call with reporters today, “The fact that we have not received one permit to build on federal land is disturbing.”
If a project wins approval, the next step is for the BLM to issue a right-of-way to the applicant for a specified term (likely 20-30 years, according to the agency). The feds would then collect rent on the property at what’s determined to be fair market value.
Resch emphasized that part of the challenge stems from the simple fact that no one has much experience with projects of this size. It’s “always more difficult for the first couple projects,” he said, adding that while “education of the industry and BLM is happening now,” the “ultimate challenge” will be coordinating federal and state agencies to get all the permits and approvals necessary to go ahead with these billion-dollar projects.
Fred Morse, U.S. Senior Advisor for Abengoa Solar (the recent recipient of a $1.45 billion conditional loan guarantee from the Department of Energy), commented that he anticipates an “automatic streamlining” of utility-scale solar project development process (both on and off public lands), with government agencies and developers alike learning as they go.
In order for that streamlining to take place and lessons to be applied, however, Morse emphasized that it’s “essential” that government financing programs supporting these projects let developers come back for second helpings to apply their lessons to additional projects.
At the end of the day most utility-scale solar projects will not pass go unless they collect a billion-dollar-plus guarantee or other support from the feds, the executives on the call emphasized. Commercial banks today are not ready or able to finance these types of projects under terms that will allow them to go forward, said Morse, while DBL Investors Managing Partner Nancy Pfund echoed that “the banks are not stepping up in the way that perhaps they have in the past.”
Image courtesy of Abengoa Solar.