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DOE Rejects SolarCity Loan Guarantee

Just weeks after the DOE announced a conditional commitment for a $275 million loan guarantee to SolarCity for solar installations on military housing complexes, the future of the project is unclear.

The DOE informed SolarCity that the loan guarantee will not be finalized by September 30, the date that the Sec. 1075 loan guarantee program expires. The loan guarantee fell through because of additional documentation requirements resulting from the congressional investigation into Solyndra’s recent bankruptcy.

On September 23, SolarCity CEO Lyndon Rive sent a letter to members of Congress, asking for an extension of the statutory deadline for final clearance of the remaining Sec. 1075 conditional commitments. In the meantime, firms in the ethanol, geothermal and wind power industries have had loan guarantees finalized.

In his letter to the Chairmen of the Committee on Energy and Commerce, and the Subcommittees on Energy and Power, and Oversight and Investigations, Rive warned that Project SolarStrong “is at risk of becoming an unintended casualty of the controversy over Solyndra.”

There are stark contrasts between SolarCity and Solyndra, not the least of which is that SolarCity uses proven technology – the innovation is the financing process. This project has the potential to be the largest single residential installation project in the world, with great benefits to the military community in particular.

A solar installation on a San Mateo home. Photo Credit: SolarCity

But while the DOE loan guarantee was for less than 25 percent of the required capital for SolarStrong, Rive believes that this loss of support may put the project in jeopardy.

“Halting the project will mean sacrificing more than $1 billion of private investment into economically hard-hit military communities throughout the United States,” he said. “It would also mean the loss of jobs we believe the project would create, many of which would have gone to veterans and the family members of our active duty military servicemen and women.”

The original conditional commitment from the DOE signaled continued government support of the solar industry. But Solyndra’s failure has clearly had a strong impact, leading the DOE to be apprehensive about appearing to have too-close links to the solar industry.


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