September 23, 2011
U.S.

Energy Department OKs new loan guarantees for green projects

By Ken Bensinger and Alexa Vaughn, Los Angeles Times, www.latimes.com 23 September 2011

Reporting from Los Angeles and Washington—
The Department of Energy granted final approval to three new loan guarantees for green energy projects, even as it faced continued scrutiny over $528 million in government loan assurances to solar panel maker Solyndra, which went bankrupt.

The new guarantees were announced Friday after executives of Solyndra invoked their 5th Amendment privilege against self-incrimination before a congressional subcommittee investigating the loan guarantee process.

Meanwhile, two other solar companies said they would probably not get funding under the same program, despite earlier promises from the government.

“This is an unintended consequence of the Solyndra situation,” said Lyndon Rive, chief executive of SolarCity.

The San Mateo, Calif., company had been seeking a $275-million loan guarantee for a project to install solar panels on military bases in 33 states, but was informed this week that the Department of Energy would not be able to complete its review process by a Sept. 30 deadline for final approval.

Separately, First Solar in Tempe, Ariz., said it would not be able to complete its application for a $1.93-billion loan guarantee for a solar farm in San Luis Obispo.

The loan guarantee program was authorized by Congress in 2009. Unlike a loan, a guarantee is a promise to repay a third party for financing a project should the borrower fail to meet its obligations.

Nine projects are still awaiting a green light from the DOE, including two other First Solar efforts. To date, the agency has completed 21 loan guarantees, worth up to $10.1 billion, including the three announced Friday.

One, for up to $350 million, is for a geothermal energy project in Nevada. The second, for $105 million, is for a cellulosic ethanol plant in Iowa. And the third, a $168.9-million guarantee, would support a wind farm in New Hampshire.

But the loan guarantee that has garnered the most attention was the first one approved – to Solyndra, in 2009.

President Obama visited the Fremont, Calif., solar panel maker and held it up as a poster child for green manufacturing. But early this month, it filed for bankruptcy protection and was raided by the FBI soon thereafter.

Since then, the House Energy and Commerce Committee has been investigating the matter, as have the Treasury and Energy departments.

On Friday, the company’s chief executive, Brian Harrington, and chief financial officer, Bill Stover, invoked their 5th Amendment privilege and refused to answer questions at a subcommittee hearing, as they said they would earlier this week.

Their silence didn’t keep Republicans on the committee from asking the pair questions, often repeating the same queries to each, which prompted Rep. Henry A. Waxman (D-Beverly Hills) to call the behavior “witness badgering.”

In an interview, Solar City’s Rive said his company’s project was exactly the sort the loan guarantees should go toward because it is far less risky than the Solyndra venture, using proven technology and having a guaranteed income stream.