The federal loan guarantees from the U.S. government for clean power just keep on coming. This afternoon solar thermal company BrightSource said it has received a commitment from the Department of Energy for a $1.37 billion loan guarantee to build out BrightSource’s Ivanpah solar project, which is set to be the first new solar thermal power plant built in California’s deserts in 20 years.
BrightSource says Ivanpah, which is planned for 4,000 acres in the Ivanpah Valley in the Southern California desert, will power 140,000 California homes with solar energy, create 1,000 union jobs and deliver more than $400 million in state and local tax revenues. BrightSource CEO John Woolard called the loan guarantee “tremendous validation” of BrightSource’s technology in today’s release.
BrightSource’s loan guarantee commitment follows in the footsteps of other guarantees for clean power given out in recent months including to thin film solar company Solyndra and to Southern Company for its nuclear reactors. Federal loan guarantees under this program move from commitment phase to finalized once the company has met an equity commitment. So expect BrightSource to start lining up more plant financing.
Loan guarantees are a real competitive edge for companies like BrightSource because they typically enable a company to finance projects with a better interest rate and at a lower cost than would otherwise be available to them. It serves essentially as promise by the government to back a loan if the company can’t make good on it. BrightSource competes with other startups and big firms, including French nuclear giant Areva (which recently bought competitor Ausra), Abengoa Solar, the solar arm of the decades-old Spanish renewable energy and engineering giant, eSolar, and Stirling Energy (here’s at least 11 solar thermal firms I wrote about in 2008).
If the federal loan guarantee doesn’t help speed up the California state permitting and citing process for Ivanpah, we’re not sure what will. Woolard has famously said that Ivanpah is in the second year of what was supposed to be a 6-month process due to regulations (and more recent issues like the desert tortoise). In today’s release BrightSource says that Ivanpah is scheduled to go under construction in the second half of 2010 if permits by the California Energy Commission and the U.S. Department of the Interior’s Bureau of Land Management are given.