Archive for california fit

India accuses US of “ruining” domestic PV industry

Monday, August 20th, 2012

20. August 2012 | Applications & Installations, Global PV markets, Industry & Suppliers, Markets & Trends| By:  Becky Beetz

ndia’s Centre for Science and Technology (CSE) has launched a scathing attack on U.S. photovoltaic manufacturers, claiming they are “ruining” India’s domestic photovoltaic manufacturing industry by taking advantage of the US$30 billion Fast Start Finance Fund.

First Solar thin film photovoltaic modules cadmium telluride

First Solar’s thin film modules have been heavily used in indian photovoltaic projects.

First Solar

According to the center’s researchers, which are reviewing the first phase of India’s Jawaharlal Nehru National Solar Mission (JNNSM), 80% of India’s photovoltaic manufacturing capacity is in a state of “forced closure and debt restructuring”, because Indian project developers are placing their equipment orders with U.S. manufacturers.

Currently, the JNNSM requires all crystalline photovoltaic projects to use domestically manufactured products. However, thin film projects may procure their equipment from other regions; a loophole, says the CSE, being exploited by the Export-Import Bank of the United States (Ex-Im Bank) and the Overseas Private Investment Corporation (OPIC).

The center claims they have been offering rates of interest as low as 3% and long repayment schedules of up to 18 years to Indian project developers under the fund – designed to enable developing countries tackle climate change – if they purchase thin film panels from U.S. companies. In comparison, it says Indian banks are offering interest rates of around 14%.

“This has skewed the market completely in favour of thin-film panels imported from US despite the fact that thin-film has lower efficiency when compared to crystalline panels,” says the center in a statement released, adding, “Close to 60 per cent of the panels installed in India are thin-film type even though only 14 per cent of global capacity is thin-film.”

CSE goes on to quote the U.S. Department of State’s report on U.S. Fast start climate financing between 2010 and 2011, which reportedly shows that $248.3 million was awarded by Ex-Im Bank and OPIC for grid-connected photovoltaic plants in India. “The major beneficiaries in this case have been American producers such as First Solar and the now bankrupt Abound Solar,” it says.

Furthermore, the center claims the US is “fudging” its data on fast start finance. “When giving loans as aid, only the difference of the rate of interest between the ‘soft’ loan and a commercial loan is counted as aid. However, in this case, the US has counted the entire loan sum as aid under fast start finance. If a fair counting would have been done, the fast start financing amount shown by the US would be reduced to a fraction,” continues the statement. The U.S. says it has contributed $5.1 billion to the fund to date.

Outwith the fund, Ex-Im announced in July that it had authorized two loans worth US$57.3 million to support the development of 3 photovoltaic power plants in India, which will use First Solar thin film modules.

In a statement announcing the loans, Ex-Im Bank chairman and president, Fred Hochberg said the bank will be supporting India’s green-energy push. “These important transactions will finance the purchase of American products and services and support jobs in our innovative renewable-energy sector.”

Overall, the bank says it has provided $500 million for the financing of solar projects in India. Its goal is to “promote both the bank’s financial products, but also facilitate the purchase of U.S. goods and services.”

Developing countries

In 2009, the Copenhagen Accord agreed to establish Fast Start Finance, a US$30 billion fund contributed to by developed countries for developing countries to support the implementation of climate change measures between 2010 and 2012.

“Fast start financing was supposed to benefit the developing country recipient. Instead, the US has managed to turn it into a game where funds registered as climate funding is given out as loans to projects that promise to buy equipment made in the US thereby benefiting themselves while knocking out the Indian manufacturing competition that doesn’t have the same government backing,” states Chandra Bhushan, CSE’s deputy director general.

Referring to the ongoing U.S.-Sino trade dispute over solar cells, Kushal Yadav, head of CSE’s Renewable Energy team adds, “Interestingly, the US government has put anti-dumping duties on solar equipment imported from China because of the alleged subsidies that China is giving to its solar manufacturers. However, the US is engaging in a similar practice in India by subsidising loans for buying American equipment!”

In the U.S. Department of State’s report, the funding transactions between 2010 and 2011 for India’s solar market include:

  • $719,985 awarded to Astonfield Renewables Private Limited from the U.S. Trade and Development Agency (USTDA) for a feasibility study for 2 photovoltaic plants in India. “The projects will serve as some of the first solar photovoltaic (PV) projects in India deploying U.S. thin film technology.”
  • $14.8 million from OPIC for the development, construction and operation of a 5 MW photovoltaic power generation facility in Gujarat. “The facility investor is a leading solar energy provider from the United States that will use advanced U.S. power generation technology in this plant in India.”
  • A loan totaling $84.3 million from Ex-Im Bank to finance photovoltaic modules and related equipment for the Dahanu Solar project located in the village of Dhursar, in India’s Rajasthan State. “The financing will support the export of thin film, photovoltaic solar modules produced by First Solar.”
  • An Ex-Im authorized a loan of $18.9 million to finance photovoltaic modules and related equipment for the Tatith Solar project located in Gujarat. “The project will utilize polycrystalline solar cells produced by Solarworld Industries America, LP.”
  • A financial guarantee from Ex-Im worth $18 million to finance photovoltaic modules for the Acme solar power plant to be located in Gujarat. “The Acme plant will utilize thin film technology photovoltaic modules supplied by First Solar of Tempe Arizona.”
  • An Ex-Im authorized loan of $15.8 million to finance photovoltaic modules and related equipment for the Azure Solar Plant project located in Rajasthan. “The photovoltaic farm will … consist of thin film technology photovoltaic panels supplied by First Solar of Tempe, Arizona.”
  • An Ex-Im authorized guarantee of $9.2 million to finance thin film, photovoltaic modules and related equipment to Punj Lloyd Solar Power Ltd. of India for a photovoltaic project located in Rajasthan. “The solar modules for the project will be produced by Abound Solar, Inc. at its Colorado facility.”
  • An Ex-Im authorized loan to Universal Solar System of India for $3.7 million to finance a photovoltaic power plant to be located in Gujarat. “The financing will support the sale of electrical inverters supplied by SMA America, LLC, of California as well as solar modules produced by Abound Solar Inc. at its Colorado facility.”
  • $30 million from OPIC for financing the development, implementation and operation of a 120 MW monocrystalline silicon photovoltaic module manufacturing facility located in Hyderabad.

By Christopher Martin and Larry Bragman

MARIN CLEAN ENERGY is a public agency that helps electricity consumers take action to protect our planet by offering a way to dramatically reduce environmental impacts.

Any Marin electricity consumer can choose to have their energy needs met with one of MCE’s high value options — Light Green’s 50 percent renewable energy or Deep Green’s 100 percent renewable energy.

Customers may also choose to keep PG&E’s 20 percent renewable energy service.

Due to state actions, historically, investor-owned utilities (IOUs) like PG&E, have been the default service provider with no consumer choice.

In 2002, after PG&E’s bankruptcy, state legislators passed California’s Community Choice Aggregation law, transferring the default status from the IOU to local CCA programs. State law mandates that all CCA programs operate as “opt out” programs.

MCE is California’s first operating CCA, although there are several others in development, and as a result, is in the process of becoming Marin’s default electricity provider.

This is ideal because it puts you, the consumer, in the driver’s seat. Participation with MCE is completely voluntary; consumers are mailed five separate notices so they may freely select their energy provider.

Ultimately, the choice is yours; consumers benefit by finally having a real and meaningful choice in their energy supply.

MCE is proud to offer a cleaner, more sustainable energy product at rates that are stable and affordable. MCE is committed to keeping costs as low as possible.

Beginning July 1 2012, it’s estimated that 50 percent renewable energy will cost an average household approximately $2.50 more per month as compared to PG&E’s 20 percent renewable energy.

An average commercial customer can expect to pay approximately $3.31 less in a summer month and $4.67 more in a winter month for MCE’s 50 percent renewable energy.

A rate calculator will soon be available on MCE’s website for account-specific cost analysis.

MCE values public participation and transparency. Rates are developed, discussed, evaluated and approved locally at accessible public meetings. MCE invites you to attend and provide feedback.

Regularly scheduled meetings occur on the first Thursday of each month at 7 p.m. (750 Lindaro St. in San Rafael).

As a local, community-based organization, MCE reinvests revenues to provide greater rate stability and greener energy to its ratepayers, rather than investor dividends.

A portion of the funds MCE customers spend on their electricity bill stay in Marin to fund programs such as:

• Installing electric vehicle-charging stations;

• Distributing $500 solar or energy efficiency rebates;

• Supporting local community events, youth sports and nonprofit organizations; and

• Developing local, renewable energy projects.

MCE recently signed a 20-year contract with the San Rafael Airport for 972 kilowatts of rooftop solar power, the largest solar project in Marin, and is developing plans for a 1 megawatt solar shade covered parking lot in Marin.

The airport project, which will cover 48 existing roofs, was designed locally by REP Energy and will be financed locally through the Bank of Marin. It will result in approximately 25 local jobs over a 3 month period and is scheduled to provide power for MCE customers by fall 2012.

The 1 megawatt solar project, which will cover about eight acres of already-existing parking lots providing shade for cars and electricity for MCE customers, is scheduled to be operational in March 2014.

MCE provides worthwhile value for a small premium. The increased renewable energy procured by MCE means less dependence on foreign and domestic fossil fuels, a reduced carbon footprint, community support and development, and new green energy.

The choice, as always, remains with the consumer and that’s a win-win situation “… for us, our kids, our environment, and our future.

TORONTO, Apr 24, 2012 (BUSINESS WIRE) — JCM Capital (JCM) announced today that they have launched a $10 million solar development capital fund that will invest in early-stage photovoltaic (PV) projects installed on large commercial and industrial buildings across Ontario, leveraging the Province’s Feed-in-Tariff (FIT) program. The aim of the fund is to target application-ready projects to be submitted into the upcoming Ontario Power Authority’s (OPA) application window, and as such, assist with early-stage development costs such as FIT application fees, structural engineering assessments, FIT security deposits and grid connection impact assessment (CIA) costs. The fund will also invest in Ontario-based FIT contracted projects that have not yet reached commercial operation.

CEO of JCM, Christian Wray stated that despite the recent changes to the Province’s Green Energy Program, the fund will ensure that necessary capital is available for quality projects that meet the requirements of the revised FIT 2.0 program. “JCM has and will continue to support the small to mid-size solar market in Ontario with the belief that our investment in distributed solar power generation will provide the maximum benefit to all stakeholders. The fund creates a unique solution for local PV development companies that have few options when funding early-stage projects that require significant risk capital.” Wray also noted that JCM has a strong track record in working with solar developers in Ontario and looks forward to partnering with and supporting other experienced developers as the program continues.

To date JCM has successfully deployed over $5 million of development capital, enabling the advancement of an initial 20MW commercial rooftop solar portfolio. When completed, the aggregate construction costs of this initial portfolio will exceed $80 million and will offset approximately 20,000 tons of harmful C02 from being released into the earth’s atmosphere – the equivalent of planting 2 million trees or removing 60,000 cars from the road.

The fund will also help create further jobs in accordance with the Province’s Green Energy Act initiative.

For more information, please visit www.jcmcapital.ca

About JCM Capital (JCM)

JCM Capital is a financial advisory company that focuses primarily on financing and the co-development of solar energy projects in Ontario, Canada. The Company provides commercial solar energy developers early-stage development capital and/or equity financing solutions for ‘construction-ready’ and operational solar projects while offering strategic and project management support. Current portfolios include rooftop and ground-mounted projects spanning from Southwestern to Eastern Ontario. The Company is looking to expand it’s reach through the cultivation of new partnerships and associations.

SOURCE: JCM Capital

LA launches feed-in tariff pilot

Monday, April 23rd, 2012

LA launches feed-in tariff pilot

Apr 23, 2012

Los Angeles is becoming the latest city in the U.S. to adopt a feed-in tariff (FiT) to spread the adoption of solar. It’s also likely the largest. Last week the city’sLos Angeles Department of Water and Power (LADWP) Board of Water and Power Commissioners at its municipal utility, the Los Angeles Department of Water and Power (LADWP) approved the city’s 10 megawatt FiT pilot program.

Under the FiT building or PV array owners are paid for the power their system produces at a premium to what they system owner normally pays for electricity. “The rate for energy will be based on the bid price of energy multiplied by the time-of-delivery factors as described in the FiT guidelines,” said a LADWP spokesperson who preferred not to be named.

Projects will be accepted based on a competitive bidding process. Preference will be given to projects with lower costs of energy, according to LADWP.

The FiT is open to residents, businesses and nonprofits, according to the spokesperson. “LADWP will make available a total of 10 megawatts for the entire demonstration program. Individual projects can be between 30kW to 999kW (AC) in size,” the spokesperson said. “The only criteria is that the project must be located in the LADWP service area.”

Systems could also be owned by third parties like solar leasing companies. “LADWP is leaving it up to the program participants to set up the ownership structure.”

The demonstration program is a precursor to larger FiT program that LADWP plans to issue as it adds more solar energy into its renewable portfolio to meet California’s renewable energy portfolio standards. The utility is required to source 33 percent of its energy from renewable resources by 2020.

The latter FiT program could range from 75 megawatts to 150 megawatts and should launch relatively quickly, according to the spokesperson. “LADWP would like to roll out the final  FiT program in phases starting in January 2013 which is contingent on positive outcome of rate proposal.” The size of the larger program will be based at least partly on the success of the demonstration project.

By:  Cheryl Kaften

Just how important is “home advantage” to players in the renewable energy sector? It could be a game changer, according to Japan and the European Union, both of which have brought complaints against Canada for violating the rules of fair competition.

80MW Sarnia Solar photovoltaic thin film Ontario project

Nothing in the renewable energy industry has challenged the scale of the iPhone to date. However, Corning Glass represents proof positive that, yes, it matters where the components are manufactured.

First Solar

Specifically, Japan and the EU have protested to the World Trade Organization (WTO) in Geneva that the Canadian Province of Ontario is breaching international convention by stipulating that new solar and wind facilities must be built with a certain amount of domestically manufactured components. For example, solar arrays must be 60 percent “Made in Ontario” in order to participate in the province’s feed-in-tariff (FIT) scheme.

Both nations claim Ontario is discriminating against its global trade partners and giving preferential treatment to local providers. The two cases in all likelihood will lead to a landmark ruling on the legitimacy of “domestic content requirements” in international commerce.

To grasp the implications of insisting on largely domestic-made products, consider how much U.S. manufacturers would gain by the passage of a 60 percent domestic content regulation applying to the components of the Apple iPhone alone, which today is manufactured chiefly in China.

Since the launch of the iPhone in 2007, Corning Glass has manufactured the scratchproof face of the phone out of a factory in Kentucky. Not only has Corning created jobs and profits by becoming a domestic supplier to California-based Apple, but, after the iPhone became a success, Corning received a flood of orders from other companies hoping to imitate Apple’s designs. Its glass sales have grown to more than US$700 million annually, and it has employed about 1,000 Americans to support the emerging market.

Nothing in the renewable energy industry has challenged the scale of the iPhone to date. However, Corning Glass represents proof positive that, yes, it matters where the components are manufactured.

Imports on the outs?

Japan and the EU claim that Canada is in violation of three international trade agreements, because:

  • Ontario’s domestic content regulations accord “less favorable treatment to imported equipment” and are “being applied so as to afford protection to Ontario production of such equipment” (General Agreement on Tariffs and Trade [GATT]: Art. III:4, III:5, XXIII:1);
  • Ontario’s domestic content stipulations appear to be trade-related investment measures that are inconsistent with the provisions of Article III of the GATT 1994 (Trade-Related Investment Measures [TRIMs]: Art. 2.1); and
  • A subsidy had been granted … that would confer a benefit, “contingent [on] the use of domestic over imported goods” (Subsidies and Countervailing Measures: Art. 3.1(b), 3.2, 1.1).

Tensions – and world interest – ran high when the two nations faced off with Canada for oral arguments on March 27 and 28 in Geneva. The key issues to be considered: Was Canada liable to the world court for the independent actions of its province, Ontario?; Were the content requirements of the FIT Program a barrier to fair trade?; and Did Ontario discriminate in favor of domestic goods with subsidies designed to promote production in the province, rather than designed to advance the renewable energy industry?

Canada responded with a rationale that was geared to render all three questions moot. It characterized the FIT scheme as a form of “government procurement, designed to ensure the affordable generation of clean energy in Ontario” – and, by doing so, attempted to shield the FIT and its domestic content mandate from both the GATT and TRIMs provisions. (Government procurement is also exempt from the WTO Subsidies and Countervailing Measures agreement, provided that it does not confer a benefit.)

And although governmental purchases are covered under another WTO pact – the plurilateral Government Procurement Agreement – Canada argued that the GPA represents a purely national commitment. Therefore, Ontario was under no obligation to grant access to its energy procurement market.

However, Tokyo and Brussels insisted that the program provides a subsidy. “The defining aspect of FIT contracts is that they ensure renewable energy generators payments in excess of those that they would [otherwise] receive,” argued the Japanese Member, adding, “That excess is best confirmed by examining the difference between the FIT rates and HOEP [Hourly Ontario Energy Price], as HOEP represents the entire rate” on the open market.

Ottawa was quick to eliminate any associated wiggle room. The Canadian Member characterized the HOEP as “an inappropriate benchmark” and opined that “the focus of any benefit analysis must be on the recipients of the benefit – wind and solar energy producers – not consumers.”

Court of public opinion

Industry reaction to the WTO hearing has been mixed. David Robinson, president of Senergy Solar Corp., LLC, based in Haverton, Pennsylvania, supported Canada’s mandate for domestic content. He told pv magazine, “I wish that the U.S. government would impose the same sort of content requirements here. Then, we would have solar companies moving here, instead of up north to Canada.”

Stephen Morgan, CEO of American Clean Energy, a Saddle Brook, New Jersey-based firm that designs and builds photovolatic arrays, came out against the content requirements. He commented to pv magazine, “The use of content restrictions has nothing to do with promotion of environmentally sustainable energy; rather it is about … subsidizing job creation in a non-transparent manner through otherwise higher-than-necessary alternative energy costs.”

By contrast, Matthew Ayres, managing director of Sydney, Australia-based Growth and Innovation Asia-Pacific, advised a more measured approach, telling pv magazine, “A strong bias toward import may reduce the domestic capability base. A strong domestic focus may limit the use of new (international) technology and skills. So, we are left with a prudent balance that respects the domestic economy, the ability to build a sustainable domestic capability in renewable energy; then bringing the best skills and technology to the table in a way that expands the market in a structured and staged manner.”

Getting the proper FIT

There are now more than 35 FIT programs worldwide. Will this case have repercussions for any other feed-in tariffs currently in place?  That’s unlikely, unless they invoke a domestic content clause. Canada’s Province of Nova Scotia, for example, has its own FIT scheme, but has not been named in any complaint.

How the case plays out remains to be seen. By the end of April, the parties must submit written rebuttals to the panel, which will then schedule a second oral hearing. A ruling on the case is not expected until late October 2012.

Watch out for the May edition of pv magazine, which will discuss the issue in more detail.

Spain suspends FITs

Sunday, January 29th, 2012

28. January 2012 | Top News, Applications & Installations, Industry & Suppliers, Global PV markets, Markets & Trends | By:  Oliver Ristau

In a surprise move, the Spanish Council of ministers has implemented a temporary suspension of the renewable energy feed-in-tariffs (FIT) for new installations in Spain.

Spanish flag

No further renewable energy projects, which includes photovoltaics, will receive FITs.

Solarpack

As a reaction to the financial crisis in the Mediterranean country, the new Spanish government, under Prime Minister Mariano Rajoy, has approved a new law, by which the current system of remuneration for renewable energies will be discontinued.

As the Council of Ministers announced on Friday, the government won’t give any economic incentive to fund new renewable installations, and the relevant administrative and funding systems will be suspended.

While it was said that the suspension will be temporary, the government did not disclose any timeframe for when the FITs may be resumed.

In a statement released, it argued that “to maintain the current system of remuneration is incompatible to the current economic crisis.” It did stress, however, that the new measures will not be retroactive. They won’t effect “either the installations in operation, or those that are already registered.”

New British and Malaysian FIT Programs Launch

Sunday, December 4th, 2011

World First–British Feed-in Tariffs for Renewable Heat

Solar DHW Tariff Scheduled for Fall 2012

Malaysia Seeks 1,250 MW of Solar Photovoltaics by 2020

December 4, 2011

By Paul Gipe

Two innovative feed-in tariff programs launched last week. Malaysia methodically stepped into the fray of developing countries moving aggressively toward renewable energy. Meanwhile, despite the Eurozone’s debt crisis, strikes, and turmoil in its FIT program for electricity, Britain quietly launched a groundbreaking program to pay feed-in tariffs for renewable heat.

Regardless of uncertainty in world financial markets, the launch of these long-planned, long-discussed programs indicates that the march toward more countries using feed-in tariffs to develop renewable energy continues undiminished.

The British program, dubbed the Renewable Heat Incentive (RHI), for non-domestic generators opened for applications on Monday November 28, 2011. Malaysia opened their electronic doors to applications December 1, 2011. Both programs expected a flood of applications.

Britain’s RHI

For the first time, a program will pay for the heat generated by solar panels. Britain’s RHI will pay £0.085/kWh ($0.13/kWh) for metered heat from solar thermal systems up to 200 kW in size. The program will also pay £0.043/kWh (~$0.07/kWh) for heat from ground-source heat pumps less than 100 kW in size, and £0.03/kWh (~$0.05/kWh) for heat pumps greater than 100 kW.

The original program proposed to pay £0.18/kWh ($0.28/kWh) for heat from residential-scale solar domestic hot water systems. Implementation of the residential heat program has been delayed to October 2012.

 

Malaysia’s Advanced Renewable Tariffs

Unlike some developed countries, Malaysia launched a full-featured program of Advanced Renewable Tariffs from the start. The tariff schedule is fully differentiated by technology and size, and includes bonus payments for locally manufactured products.

The ambitious program expects to develop more than 3,000 MW of new renewables by 2020, of which more than one-third will be from solar photovoltaics alone. Biomass will contribute another one-third.

 

DECC: Renewable Heat Incentive

Malaysia Adopts Sophisticated System of Feed-in Tariffs

by Michael Bates on Friday 02 December 2011

The International Trade Commission (ITC) has made a preliminary determination in its anti-dumping and countervailing-duty investigation into Chinese solar cell and module trade practices, having voted 6-0 this morning that there is a “reasonable indication” that those practices are detrimental to the domestic solar industry.

With this vote, the U.S. Department of Commerce (DOC) has been given the green light to continue investigating the allegedly unfair or illegal importation of Chinese crystalline-silicon photovoltaic products – namely, that cells and modules are being sold in the U.S. at prices under fair value and that the Chinese government is unfairly subsidizing its own manufacturing base.

Hanging in the balance of these investigations is whether anti-dumping and countervailing duties will be established to prevent Chinese anti-competitive practices and level the playing field for U.S. solar manufacturers.

The Coalition for American Solar Manufacturing (CASM), led by SolarWorld Industries America Inc., filed the cases with the ITC and DOC in October.

“The ITC’s unanimous ruling underscores what American solar manufacturers have argued for months: Without any production cost advantage, dumping by Chinese solar manufacturers and massive subsidies by the Chinese government are enabling Chinese producers to drive out U.S. competition,” said Gordon Brinser, president of CASM, in a statement.

The DOC is expected to make a ruling, perhaps as soon as mid-January, regarding preliminary remedies. These remedies could include, for instance, a requirement that Chinese importers deposit estimated duties on imports they made as far back as Oct. 14.

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Spurned By DOE, First Solar Hunts For Solar Farm Buyer

Saturday, September 24th, 2011

By Cassandra Sweet and Ryan Tracy

-DOE says First Solar is not eligible for $1.9 billion loan guarantee for 550-megawatt Topaz solar farm

–First Solar says it is in “advanced talks” with potential buyers of the Topaz facility

–Shares close down 9% at $66.85, lowest level seen in more than four years

(Adds response from Royal Bank of Scotland in 9th paragraph.)

First Solar Inc. (FSLR) said Thursday that the Department of Energy will not provide a loan guarantee to help finance construction of a large California solar farm, but the company is in “advanced discussions” to sell the project.

The Tempe, Ariz., solar-panel maker and solar-farm developer said that the DOE informed the company that there was not enough time to process the company’s $1.9 billion loan guarantee application for the 550-megawatt Topaz solar farm to meet a statutory Sept. 30 deadline for closing the transaction.

“We weren’t able to meet the requirements in time for the deadline,” First Solar spokesman Ted Meyer said in an interview. He added that the company was in “advanced talks with potential buyers” to sell the solar power plant and would “utilize a different transaction structure that does not require a DOE loan guarantee.”

Meyer declined to name the potential buyers or provide details on the sale.

The DOE’s disqualification of First Solar’s Topaz project loan guarantee comes as the department faces intense scrutiny following the bankruptcy of solar-panel startup Solyndra Inc., which obtained a $535 million loan guarantee and a $527 million government loan to build a factory in Fremont, Calif. Solyndra is the subject of a federal criminal probe into whether the company misled the government in connection with the 2009 loan guarantee. It filed for bankruptcy protection earlier this month.

The loss of the Topaz loan guarantee sent First Solar shares tumbling 9% to close at $66.85, their lowest close in more than four years.

In June, the DOE offered First Solar conditional commitments of guarantees for $1.93 billion in loans to help finance the Topaz solar farm. Royal Bank of Scotland Group PLC (RBS.LN, RBS) and a group of unnamed institutional investors and commercial banks agreed to make the loans, which were to be guaranteed by the DOE.

It was unclear whether RBS planned to abandon the project or work on a new financial package with different terms.

An RBS spokesman said the bank declined to comment.

A DOE spokesman declined to comment directly on the department’s disqualification of First Solar’s loan guarantee for the Topaz project, but said that closing such transactions is a rigorous process.

“We have consistently said that we will not close any deal until all of the rigorous technical, legal, and financial review has been completed,” said the DOE spokesman, Damien LaVera. “Failure to close a loan application does not indicate that a project doesn’t have merit or a strong business case to succeed, but rather that all of the extensive due diligence and legal documentation simply cannot be completed by Sept. 30.”

First Solar has two conditional loan guarantees still pending, a $1.8 billion guarantee for a 550-megawatt solar farm in Riverside County, Calif., called Desert Sunlight, and a $680 million guarantee for a 230-megawatt solar farm in Lancaster, Calif., called Antelope Valley.

Company spokesmen declined to comment on the outlook for obtaining loan guarantees for the remaining projects. Some analysts expressed hope that First Solar would snag the latter two loan guarantees, although they acknowledged that investors remained jittery following the Solyndra bankruptcy.

“The Solyndra fallout has created a black cloud around the company that is unlikely to clear until projects are announced as sold,” said Jesse Pichel, an analyst at Jefferies Group.

First Solar obtained a $967 million loan guarantee for the 290-megawatt Agua Caliente solar farm in Yuma County, Ariz., which the company sold to NRG Energy Inc. (NRG). PG&E Corp.’s (PCG) San Francisco-based utility has signed a long-term contract to buy the output from the facility, which currently is under construction.

Together, the four projects are expected to create about 1,750 construction jobs and 53 permanent jobs, and generate enough electricity to serve about 470,000 homes.

In July, First Solar obtained a key construction permit to build the Topaz solar farm on previously disturbed land in San Luis Obispo County, California. PG&E has signed a long-term contract to buy the output from the Topaz facility.

In August, two local citizens groups filed a lawsuit against the Topaz project with the San Luis Obispo Superior Court. The groups did not file a request for an injunction that could delay construction, allowing the company to start building anytime.

First Solar initially planned to start construction on Topaz Sept. 30 to qualify for the loan guarantee. But the company said Thursday that it does not have a timetable for starting construction.

The company is likely to start construction for most, if not all, its shovel-ready projects by Dec. 31, when a key government incentive for renewable energy projects currently is set to expire.

Pending DOE loan guarantees must be closed and construction must be started on funded projects by Sept. 30, under Section 1705 of the Energy Policy Act of 2005.

Copyright © 2011 Dow Jones Newswires

 

The Solar Sell-off Has Gotten Ridiculous

Thursday, September 22nd, 2011

By Travis Hoium

Solar stocks took another drubbing yesterday, this time on word that Italy’s debt had been downgraded by S&P. If it isn’t changes to a feed-in tariff, it’s economic concerns, or falling oil prices, and now … it’s debt ratings?

The downgrade and solar
Does the Italy downgrade really have anything to do with solar stocks? Ratepayers essentially pay for feed-in tariffs, and Italy’s government finances have little to do with solar, save for setting policy and providing other incentives. And with sustainable changes made to the feed-in tariff earlier this year, I think it is unlikely additional changes will be made soon.

There’s also the fact that solar is one of the few things Italy can point to as a success right now. One of the reason Italy’s debt was downgraded was the prospect of stagnant growth, something the solar industry can help improve.

So while a downgrade of Italy’s debt isn’t good news, don’t you think the market has taken it a little too far this time?

Case of the falling euro
One of the bigger problems for solar manufacturers is a constantly falling euro. That is a concern for China overall, because the EU is a major trade partner with China and is one of the biggest buyers of solar panels from Chinese manufacturers.

That’s one of the reasons we’ve heard about China possibly buying the debt of troubled EU members in recent weeks. If European countries begin to default on their debt and the euro falls, then China will be affected too. China doesn’t want that to happen.

Problems in Europe overshadow solar’s growth everywhere else
Investors are quick to panic over concerns about solar’s demand, but they’re also typically slow to realize where new demand will come from. In 2008, when Spain was a major demand market and feed-in tariffs collapsed from overinstallation, everyone panicked. But Germany and Italy picked up the slack, and 2010 was a record year for the industry.

We will likely see a similar progression, with Germany and Italy becoming slightly smaller but more consistent demand sources within the next year, based on updated feed-in tariff plans. In addition, Japan, China, India, Malaysia, Indonesia, and the U.S. are also growing demand sources. In particular, China and the U.S. have a lot of capacity to build solar plants, and with costs falling, the economics play into solar developers’ hands.

Are all of these companies going bankrupt?
Yesterday a friend asked me, “How long is the solar panic of 2011 gonna last? … These companies are priced like they’re going out of business.” While I don’t have the answer to when the market will see value in solar stocks, I can point to fundamentals that investors increasingly should be considering. Value investors often look at price/book value as a way to gauge a stock’s value. A price/book value less than 1 indicates that a stock may be a good value, while growth stocks typically trade above a ratio of 1.