Gigawatt-scale loan guarantees: First Solar gets DOE conditional commitments for Calif project trio

Sept. 30, 2011 - Tom Cheyney - pv-tech.org

First Solar and its partners have received nearly $3.8 billion in new partial or full conditional loan guarantee commitments from the US Department of Energy. The commitments will be used to support the development of three major utility-scale solar farm projects in southern and central California, with a combined projected installed capacity of >1.3GW(AC) of the company’s CdTe thin-film modules—Antelope Valley Solar Ranch One (230MW), Desert Sunlight (550MW), and  Topaz Solar (550MW).

DOE has conditionally committed $680 million in loan guarantees to back the AV Solar Ranch One project located in the Mojave Desert some 80 miles north of Los Angeles. Construction on the site is due to begin next month, according to company spokesman Alan Bernheimer, with first delivery scheduled for 2012 and completion of the project in 2013.

The site will feature the first US deployment of what was described by Bernheimer as “inverters [that] will incorporate fault ride-through and voltage regulation.” The DC-AC units will provide more stable and continuous power, according to First Solar, increasing the efficiency of >100MW solar power plants. The name of the inverter supplier has not been disclosed.  

AV Solar Ranch One will generate >622,000MWh of electricity annually, enough to power about 54,000 homes; the power will be sold to Pacific Gas & Electric. Other investors in the project have not been named, he said.

The other two conditional commitments announced by DOE will be for partial loan guarantees backing up to 80% of the respective totals, as two separate groups of institutional investors will be funding the Desert Sunlight and Topaz projects and are responsible for the remaining portion of the debt.

The partially DOE-backed $1.88 billion loan designated for Desert Sunlight, to be sited on US Bureau of Land Management property in eastern Riverside County, will support a two-phase project employing 8.8 million CdTe panels. The first part is set for 300MW, with electricity generated to be sold to PG&E, and the second phase of 250MW will see its electricity bought by Southern California Edison.  

Construction on the project is expected to begin September 30, according to First Solar’s Bernheimer, with completion scheduled for 2014-15 and first delivery of power in 2014.

Desert Sunlight’s syndicate of institutional investors and commercial banks is spearheaded by lead-lender/lender-applicant, Goldman Sachs Lending Partners, which submitted the project under the Financial Institution Partnership Program (FIPP), with Citibank as co-lead arranger.

The other recipient of a conditional commitment, Topaz Solar Farms, will benefit from $1.93 billion in loans, with a substantial portion backed by the DOE award. The 550MW, located on the Carrizo Plain in eastern San Luis Obispo County, will use 8.5 million thin-film panels, with the electricity sold to PG&E.

Bernheimer said that Topaz is also expected to begin construction September 30, with completion and activation set for 2014.

The project will be funded by a different syndicate of institutional investors and commercial banks than Desert Sunlight, run in this case by lead-lender/lender-applicant, The Royal Bank of Scotland, which submitted the project under FIPP.

All three loan guarantee commitments still must file reports and documentation and go through a approval process before the awards are finalized—a process that takes months. Bernheimer pointed out that the Agua Caliente 290MW project, a First Solar and NRG site which won a conditional guarantee earlier this year, should get final approval early in the third quarter.

The modules to be deployed at the solar farms will be produced by the company’s existing Perrysburg, OH, plant as well as the new factory being built in Mesa, AZ, which is scheduled to ship its first panels in Q3 2012.

As for the use of tracking systems from First Solar’s recently acquired RayTracker unit in any of the projects, the company spokesman said, “it’s an option.”

The conditional awards of the three new loan guarantees raises First Solar and its partners’ total seen from the DOE program to more than $5.45 billion, representing >1.6GW of future installed capacity.

Bernheimer noted that because of the new inverter technology to be used, the AV Solar Ranch project received a Section 1703 award, rather than the more common Section 1705—the first major solar project to benefit from that program.

In the month of June, DOE has accelerated its loan guarantee award process, announcing some $8.6 billion in solar-related conditional guarantees alone, accounting for >2.73GW of potential rooftop and ground-mount generating capacity as well as gigawatt-equivalents of manufacturing.