A 1 GW solar farm in California, whose fate has been in limbo for awhile, is finally moving forward: Developer Solar Millennium has sold the project to another developer Solarhybrid, which will change the technology for the project from concentrating solar thermal to solar panels. There already have been talks about using First Solar’s (s FSLR) panels for the project, though First Solar on Monday declined to comment.
The project, called Blythe Solar, had gotten a $2.1 billion loan guarantee offer from the U.S. Department of Energy in early 2011 for the first 500 MW of the project, and Southern California Edison had signed a contract to buy power from this first phase. It was a crown jewel in the project pipeline of Germany-based Solar Millennium, which specializes in concentrating solar thermal technology that uses mirrors and the sun’s heat to generate steam for running a turbine generator for producing electricity.
However Solar Millennium gave up that hefty loan guarantee offer when it announced in August 2011 that the project would no longer be using the solar thermal technology but would use solar panels instead. The company laid the ground work for that transition when it started to talk about how solar panels had become so much cheaper and therefore a more attractive choice. Back in May 2011, Solar Millennium said it was forming a joint venture with Solarhybrid and would use a combination of solar thermal and solar panels.
The two German companies finalized the deal to sell Blythe last Friday after first announcing their plan to do so last October. The negotiations seemed to have broken down last December when Solar Millennium filed for insolvency and said it had to do it because it wasn’t able to close the deal soon enough to get the money it needed to continue its operation. The deal involved not only the 1 GW plan but another 1.25 GW of projects in southwestern U.S. Solarhybrid plans to use only solar panels for the 2.25 GW projects.
Both companies declined to disclose the final price for the overall, 2.25 GW of U.S. solar project pipeline. Solar Millennium said it will get paid if Solarhybrid is able to successfully develop the projects and sell the power to utilities or sell the projects to power plant operators. The agreement also gives Solarhybrid a 70 percent stake in Solar Millennium.
Closing the deal means Solarhybrid will now have to start lining up financing and other pieces to move the projects forward, such as finding suppliers for the projects. Back in November, Solarhybrid said it was hoping to form a joint venture with First Solar or other companies to work on the 2.25 GW project pipeline. First Solar spokesman Alan Bernheimer declined to comment on the joint venture talk.
The opportunity to work on any of the projects would certainly be an attractive deal for First Solar or any other solar panel suppliers, particularly when First Solar – and others in the solar industry – expect to see smaller-scale projects being proposed and approved in the future in the U.S. That prospect is prompting First Solar, which also builds solar power plants, to look for other utility-scale project development opportunities elsewhere in the world, such as the Middle East and China.
First Solar is currently working on some of the largest solar power plants in the country, including two projects of 550 MW each in California. It also is building a 290 MW project in Arizona called Agua Caliente, which is owned by NRG Energy. The first 30 MW of the project is complete and started delivering power to the Pacific Gas and Electric last month, according to the California Public Utilities Commission’s renewable energy project tracker.