Energy Department Issues First Renewable-Energy Loan Guarantee

By John M. Broder
Steven ChuGetty Images “Instead of relying on imports from other countries to meet our energy needs, we’ll rely on America’s innovation, America’s resources, and America’s workers,” Energy Secretary Steven Chu said.

The Energy Department has tentatively awarded its first alternative-energy loan guarantee, breaking a four-year logjam in the federal loan program.

The $535 million loan guarantee will go to Solyndra Inc., which said it would use the money to expand its production of photovoltaic systems at its facilities in Fremont, Calif. The company said the federal loan guarantee would cover roughly 75 percent of the project costs and would ultimately produce thousands of new construction, manufacturing and installation jobs.

Once the panels are installed and producing power, the company said, they will generate up to 15 gigawatts of electricity and save some 300 million metric tons of carbon dioxide emissions.

The loan guarantee, which is still subject to final legal and financial approvals, comes under a slow-moving program originally authorized by Congress in 2005. The application process has been hindered by bureaucratic inertia and lengthy reviews of hundreds of applications for more than $40 billion in loan guarantees.

But the newly installed energy secretary, Steven Chu, has made it a priority to begin releasing the guarantees to help meet the administration’s twin goals of creating jobs and developing carbon-free sources of power.

“This investment is part of President Obama’s aggressive strategy to put Americans back to work and reduce our dependence on foreign oil by developing clean, renewable sources of energy,” Dr. Chu said in a statement on Friday. “We can create millions of new, good-paying jobs that can’t be outsourced. Instead of relying on imports from other countries to meet our energy needs, we’ll rely on America’s innovation, America’s resources and America’s workers.”

The department is moving quickly to complete reviews of dozens of other projects and expects to announce financing decisions in coming weeks, officials said. The loan guarantee program is intended to provide money for advanced energy projects, nuclear fuel and power plant work, energy efficiency programs and new power transmission technologies. The program is also supposed to finance work on so-called clean coal technologies and projects to capture and store carbon dioxide emissions.

Chris Gronet, the founder and chairman of Solyndra, said the guaranteed funding “will enable Solyndra to achieve the economies of scale needed to deliver solar electricity at prices that are competitive with utility rates. This expansion is really about creating new jobs while meaningfully impacting global warming.”

The company’s photovoltaic panels are meant for installation on commercial industrial rooftops and lay flat rather than on an angle. The company has been shipping panels since last July.

Senator Jeff Bingaman, the Energy Committee chairman, has been pressing the Energy Department since passage of the 2005 law to release the financing guarantees. “After years of watching this program struggle to get off the ground,” he said, “it’s encouraging to see that Secretary Chu’s energetic new leadership at the department is having an effect.”

Comments are no longer being accepted.

William O’Connor March 20, 2009 · 6:20 pm

This is very good news. There are many hundreds of other equally viable projects that need funding. Good work.

Kevin Scabinski March 20, 2009 · 6:39 pm

Two oil men in the white house for 8 years what do we expect. I am very glad to see that these men have put the interest of the country before their own personal well being. I never understood how a man could abuse his trust and honor at the expense of so many and yet claim to be patriotic. They have nearly destroyed the country with the lite nay of scandals they brought us and we are all paying the price for their reckless disregard for America. As the planet continues to disintegrate around us they simply looked the other way and even hid evidence which proved their was a direct relationship with the amount of C02 gas and the rapid rise in temperatures. They had NASA hold photos of the ice sheet receding 3 times faster than once thought. They threatened scientist. The bullied the EPA into not enforcing clean air standards. The EPA had to be sued to get them to do their job. That is just plain sickening. When does it stop with these thugs. Is it really that important to destroy the planet and the economy just to say your boat is two feet longer than the other guys? It really boils down to something as absurd as that.
Say what you want about the new administration but I have the utmost respect for anyone who uses science as a tool. Thank you President Barak Obama.

Bill March 20, 2009 · 11:18 pm

The people who now have undo influence in Washington are the alternative energy companies. Who is to recieve billions of dollars in federal grants and loans? When has an oil/gas/coal company recieved millions or billions in your dollars sent to their pockets for huge projects that are not economically viable?
Read the article on the natural gas glut. There is so much natural gas in the world, so much natural gas in the USA, that is cheap, clean and doesn’t involve deals done in Washington with our tax dollars.
The whole “green” energy push is misdirected and a huge waste of resources. Really from a economic and energy independance standpoint “green energy” is just a sick joke.

David Stewart March 21, 2009 · 12:51 am

So, if I understand this right, $40 billion was allocated for this purpose under the Bush administration, but none was released in a period from 2-3 years. Another example of “pretend we’re doing something when we’re not”. Unforgivable at every step. In contrast, the new administration has money out the door within 3 months.

That’s one PV facility; money to solar thermal would complement that nicely as would geothermal, solar water heating, and passive solar construction. After that, we need to finance the economies of scale for electric batteries and cars, and put the infrastructure in place along the 2 coasts.

Ike Solem March 21, 2009 · 8:39 am

This is the best news in quite a while, and seems to indicate a real shift at the DOE – hope springs eternal, but this is really very promising.

Phillip Wolfe March 21, 2009 · 9:53 am

While I agree that the solar industry deserves government attention because of its attributes as a “renewable resource”; what about other U.S. based companies who operate without any special subsidies or funding. For example, my business acquintances own Microstar Laboratories //www.mstarlabs.com – they make all their products in the United States and they sell directly to US companies and been in business for over twenty years. They also export to other countries in need of special products in their core business which is real time high speed data acquisition. they have no lobbyists What about them? And other companies like this? Who stands for the unrepresented?

Jeremy W March 21, 2009 · 2:18 pm

@ Kevin Scabinski

This program was initiated under the Bush Administration almost a half dozen years ago. The process has been proceeding along as planned. The Obama administration did almost nothing to accelerate it.

Susan Kraemer March 21, 2009 · 4:55 pm

What Kevin said.

Thank you President Obama, and a new DoE that is really about actual solutions for us, finally.

It’s been a long 8 years.

Chris Berg March 21, 2009 · 7:38 pm

A human population explodes and China industrializes, pollution skyrockets and the Earth’s chances look mighty dim. What is amazing is the mindset that continues to think that “green energy” and Prius’s are the answer. If one guy has five kids and they have five kids, that’s thirty times the pollution, minus 1% because they’re green. Learn math, please. The Democrats won’t do anything effective other than destroy the U.S. economy with heavy taxes, Cap and Trade bribery and payoffs, encouraging population growth of morons with welfare, and laying America open to nuclear attack from China or Iran. Join mensunion.org, we have an effective plan. It’s called zero population growth.

Ion G Nemes March 22, 2009 · 3:03 am

It is good that Solyndra was granted to extend the photovoltaic pannels production.
But there are also many other projects, that , despite their high efficiency are neglected and nobody from DOE and EPA seems to pay attention on them.
There is a proposal for developing new clean &
renewable technologies like :”Active Energy Storage” (AEST) based on “Regenerative Isotherm” (RI) process invented by Mr.Ion G Nemes and his small R&DD company “nemes-invent “.
The RI process is achieved in connection with gas compression processing ,during compression the gas being simulateous cooled by some heat exchangers and the cold side of a heat pump,the derived heat being reused to heat the already isothermal compressed gas.The RI process has a lot of applications in automotive industry (Thermo-hydro-pneumatic engine THP) ,in gas turbine power plants ,in peak storage intelligent grids,wind and solar energy storage ,including pneumatic roller coaster lunch and navy,etc.
The THP engine is much more efficient than the hydro-lunch system developed the EPA with Eaton for UPS delivery trucks which recovers just the brake energy ; THP engine ,by recovering all cooling and exhaust heat from any internal combustion engine will double the thermodynamic efficiency sinultaneously drastic reducing the fuel consumption and CO2 footprint.
The proposal to re-power all school buses fleet was already submitted to DOE, EPA and NYSERDA but ,unfortunately still no answer was done.
Lot of mid size AEST spread on the whole energy grid will provide more balance and security to the
national energy supply.

Anybody interested ? Future oriented investors ?
Ion G. Nemes
nemes.invent@gamil.com

Richard in Connecticut March 22, 2009 · 10:45 am

Also a good start. For the price of a couple of days in Iraq we boost a company that otherwise would be having a very bad time. Now, what Chu needs to do is address the total lack of sufficient research funds that are needed to make future solar PV devices more competitive. Unfortunately, research must be federally supported or else it just isn’t going to happen in our current economic distress. I don’t envy the DOE the task of weeding out the adventitious and ill-considered from the good proposals; their track record has never combined scientific acumen with even a little boldness. If Chu turns out to be a good manager he might be able to light the appropriate fires.

Mike Roddy March 22, 2009 · 12:53 pm

I’d be interested to learn about the process of choosing which solar and other renewable energy firms get the guarantees.

For example, each of the 12 or so good sized solar thermal companies claims that they’re cheaper than the others. Does DOE have people who can perform an analysis properly? I can tell you from experience in the field that it won’t be easy.

DOE will be “picking winners”, but I don’t see what anybody can do abou it.

Susan Anderson March 22, 2009 · 5:31 pm

Terrific!

I echo Mike Roddy’s suggestion that different kinds of solar, particularly local, will be encouraged. This paper carried an excellent article recently about transmission. So much energy is lost in sending energy long distances that it would make sense to decentralize it as much as possible.

Anne March 22, 2009 · 6:29 pm

Wow… four years they’ve been evaluating these loans?!

Really? This program may have been begun during the Bush years, as Jeremy above commented, and…. it may be that the Obama administration did next to nothing to accelerate the process. But, common sense indicates that at least the current administration stopped dragging its feet. Sometimes that is enough.

Children’s Book Author

John Cosmas March 22, 2009 · 7:37 pm

This is great news and a welcome change that should be continued at prudent levels that our consistent with economic and practical realities. The country necessarily will be piling up even more nasty deficits to get us out of the big financial hole we’re in right now. So, we must be mindful of the looming deficits that could cripple the country for many years to come. Accordingly, we should be pursuing energy diversity policies that maximize the leverage of our resources. One resource that appears to be abundant domestically is natural gas and right now, much cheaper than gasoline on a per thermal unit basis. A study should be conducted, if one has not been done already, to ascertain potential benefits of converting a portion of our commercial transpiration industry to natural gas from oil-based fuels.

Just Me! March 23, 2009 · 3:29 am

Does anybody know if this company is owned by the US?
Or is it like the wind turbine plant and owned by another country.

Bert Hartmann March 24, 2009 · 5:27 am

They are a US based company in the San Francisco Bay area. Their product is amazing and in my opinion it is one of the more revolutionary products to come out in the Solar Industry in years. First Solar is probably the most revolutionary in years. It is great to see that this was invented and is being manufactured in the US. It will be interesting to see if countries overseas try to copy this process and solar application. If they do it will be even more interesting to see how the governing bodies deal with patent infringement.
According to this excerpt from //www.pv-tech.org/chip_shots/_a/emerging_from_stealth_part_ii_solyndra_ramps_cigs_pv_lines_to_volume/ they have very strong patents in place:

Before we exited the factory floor, I asked Truman about the company’s intellectual property and whether it might consider licensing its technology at some point. “We have a significant IP portfolio,” he told me. “Four patents have been issued, multiple ones have been published, and there a large number of submitted applications. Among the ones that have been issued, there’s one in particular that’s very broad and fundamental, which basically says that if you put cells in series on an elongated object, the patent covers that.

Again, it will be interesting to see what happens if a company in another country tries to copy what I consider to be revolutionary technology.

Cordell March 24, 2009 · 3:37 pm

Providing capital to businesses is NOT the function of the federal government. It is the function of venture capitalists and other private investors. Unfortunately, Sarbanes-Oxley’s onerous regulations that Congress enacted after the tech bubble have starved high-risk start-ups of private capital.

So now we have the federal government playing the role of venture capitalist here. Wonderful! Anyone care to bet that taxpayers will ever see a dime back of their $533 million, much less a return on this investment? There is now a glut of solar panels on the market and companies producing them are facing bankruptcy. Any company dependent on government for its capital is destined to fail. There are far too many more nimble and creative companies in the solar panel sector, (e.g. First Solar, Nanosolar, et al.) for Solyndra to survive. Doesn’t anyone recall what happened when TI and other politically connected corporations came to the federal government for low-cost loans to stay in the semiconductor memory business against Japanese rivals?

Government should stick to funding basic research instead. Public funding of private companies only begets political corruption and corporate welfare. The twin $200 billion taxpayer disasters know as Fannie Mae and Freddie Mac are prime examples of what happens when capital allocation gets politicized by government involvement in business. Moreover, how many successful high-tech start-ups has France’s socialist welfare state produced?

The best companies can get private funding if the government would simply get out of their way.

Cordell March 24, 2009 · 4:14 pm

Questions abound regarding Solyndra’s long term viability. To wit,

From PV-tech.org:

But there is one place where dollars are involved that Solyndra needs to be more open about. Although there’s been ample lip service paid to the company’s ability to drive toward a variety of definitions of unsubsidized grid parity, Gronet and this team have yet to reveal any hard numbers as to the retail (or wholesale) price tags of the panels and systems. It would be helpful to know what the darn things cost!

They won’t talk about their current cost-per-watt manufacturing metric, let alone the roadmap to getting to that buck-a-watt sweetspot and beyond. They may have a fully automated, highly controlled, even high yielding factory and a proprietary process that uses less absorber materials than other CIGS schemes, but what I saw on the fab floor did not strike me as a disruptively inexpensive approach. Three out of the four main process steps use vacuum deposition, the other (for the junction partner/buffer layer) employs a wet-spray technique–none of which screams “low-cost manufacturing solution.”

January 19, 2009 –

Solyndra has lost its Chief Scientist and one of the essential elements behind Solyndra’s cylindrical-tube-based CIGS panels, Markus Beck, according to a report in Greentech Media. Mr. Beck has reportedly moved to First Solar, marking a major loss for Solyndra. The company also lost its founder, Ratson Morad, to DayStar Technologies back in February 2008, and rumours are abounding as to Solyndra’s current standing in the CIGS industry.

Mr. Beck was instrumental in several of Solyndra’s patent filings, and was heavily involved in efficiency improvements to Solyndra’s proprietary solar cells. According to Greentech Media, neither Solyndra nor First Solar has returned calls for comment.

Cordell March 24, 2009 · 4:47 pm

When government picks winners and losers, it invariably picks the losers:

March 19, 2009 –
by Tom Cheyney

It’s official: Thin-film PV firm OptiSolar will shut down operations and lay off the majority of its workers.

When I openly wondered about the fate of OptiSolar, post-First Solar pipeline sale, in my most recent blog, little did I know that within 24 hours of posting those words that the company’s fate would be announced. The Sacramento Business Journal, in a story published earlier today, reports that the amorphous-silicon thin-film PV module company has had to shut down operations and lay off most of its employees. . .

It was only a few months ago that OptiSolar was touted as a darling of the new green-power economy, with Gov. Arnold Schwarzenegger using the new Sacramento factory as the backdrop for a November announcement of a major renewable energy initiative in California. The company received favorable coverage in major media outlets like Fortune magazine and CBS-TV’s “60 Minutes.”

Then the walls fell in, the house of cards started collapsing, and within months OptiSolar has been brought low. Once First Solar bought its most valuable assets–its hundreds of megawatts of utility-scale PV deals in the pipeline and the development team that went with them–there was evidently not enough left to keep the company alive.

A sad tale indeed, but likely not the last one we’ll see in the PV sector during these recessionary times. If I were a betting man, I’d wager that OptiSolar will not be the last upstart thin-film solar manufacturer to burn through its cash before it can start to ship in volume for a decent revenue stream, fail to find more backing, and be forced to pull the plug.

jp March 25, 2009 · 9:54 am

Kevin (#2) – please provide some backup to some of your statements. Which scientists were “threatened” by George Bush and Dick Cheney? Which clean air standards were the EPA “bullied” into not enforcing?

MRS DONNIE THOMAS April 27, 2009 · 9:09 pm

HELLO,

Are you in need of loan?Free collatera loans,we offer loan services of different types ranging from full loans to subordinate loans best designed foryou 3%.All interested applicant should contact us through our email address. donnie.thomasloanfirm@gmail.com

FIRST INFORMATIONS NEEDED ARE:
Full Name:
Location:
Age:
Contact Phone numbers:
Amount Needed:
loan Duration:
monthly income:
Email:donnie.donnie.thomasloanfirm@gmail.com

BEST REGARD

MRS DONNIE THOMAS