Amidst intense scrutiny of the Department of Energy’s loan guarantee program via the Solyndra scandal, September has still emerged as critical for a series of solar companies that hope to close federal loan guarantees and start construction on solar farms by the end of the month. First Solar (s FSLR), for one, received the final permit for its 550 MW Topaz Solar project in San Luis Obispo County in California yesterday, said the county’s senior planner, John McKenzie.
With that construction permit, First Solar plans to start building Topaz by Sept. 30, said company spokesman Alan Bernheimer. Meeting that deadline will ensure the company remains eligible for a loan guarantee from the Department of Energy that will back part a $1.93 billion loan led by the Royal Bank of Scotland.
SunPower (s SPWRA), meanwhile, has started construction work on the site for its 250 MW California Valley Solar Ranch, McKenzie said. The company secured its construction permit earlier this month. The two solar farms by SunPower and First Solar underwent contentious permitting processes in the same county before securing the final approval. Last month, the two companies announced an agreement with several environmental groups including the Sierra Club to set aside land and take other measures to protect wildlife in the county, such as the endangered San Joaquin kit fox and giant kangaroo rats. The wildlife protection measures spelled out in the agreement are above what the companies already committed to carry out as conditions of their projects’ approval from the county.
The two companies are part of a long list of clean power companies that are taking advantage of a program created back in 2005, but funded by the stimulus package two years ago to create jobs and spur clean power development. Besides the Topaz project, First Solar also has loan guarantee offers for two other projects in California.
The loan guarantees are promises by the government to pay back the loans if the borrowers can’t. Some companies that have gotten loan guarantees have received loans from the Treasury-run Federal Financing Bank while others have secured loans from banks in the private sector. The program is ending on Sept. 30, however, and the DOE is working on finalizing offers it has made to solar, wind, biofuel and geothermal companies.
If the companies can’t close the loan guarantees by the deadline, they will lose the offers. But they could be considered for loan guarantees under another program which will not lapse and received funding from Congress earlier this year, said Jonathan Silver, which oversees loan guarantee programs, in a blog post in May.
The expiring loan guarantee program has been under intense public scrutiny lately as a result of the bankruptcy filing by California-based Solyndra, which secured a $535 million loan through the program to build a factory. The solar panel maker laid off 1,100 workers last month and suspended manufacturing because, the company said, it couldn’t compete with the ample supply of lower-priced solar panels on the market.
A House committee held a hearing earlier today to grill Silver and another government official about the Solyndra loan. The Republicans focused on whether the DOE and White House did a poor job of reviewing Solyndra’s qualifications while the Democrats emphasized the need for the government to support solar technology development and installations at a time when other countries — China was mentioned numerous times – are spending heavily on supporting their own solar industry and domestic market.