DOE Wrapping Up Renewable-Energy Project Loan Guarantee Program

The U.S. Department of Energy said Tuesday that it has stopped accepting applications for loan guarantees to help finance new solar, wind or other renewable energy facilities and suggested there would be winners and losers among companies that have applications pending.

The loan guarantee program for renewable energy generation projects, called "Section 1705," after the portion of the 2009 Recovery Act that supports it, expires Sept. 30 and only projects that can start construction and close their loan guarantees by that date will be considered for a guarantee, Jonathan Silver, the head of the agency's loan programs office, wrote in a blog post on the DOE web site.

The agency has issued roughly $1.6 billion in loan guarantees for 19 renewable energy projects to date. Loan guarantees for roughly $800 million in remaining funds will be issued to companies that have already applied, whose applications are "farthest along in the process," and whose projects are most likely to meet the Sept. 30 construction deadline, Silver wrote.

"Not all these projects will succeed by September 30th," he wrote.

The DOE placed another group of applications "on hold" after determining that the projects were unlikely to meet the Sept. 30 deadline, Silver wrote. He added that if the program received more funding in the future, those applications could be revived.

The DOE notified companies on Tuesday whether their applications would proceed or not, Silver wrote.

Tempe, Ariz.-based First Solar Inc. (FSLR) said pending applications it filed for solar farms it is developing were moving forward. The company declined to provide details about its applications.

It was unclear which applications were moving forward and which were put on hold.

SunPower Corp. (SPWRA, SPWRB), which obtained a $1.2 billion conditional loan guarantee for a 250-MW solar farm it plans to build in California, has not applied for any additional loan guarantees, said SunPower spokeswoman Helen Kendrick.

First Solar Inc. (FSLR) received a $967 million conditional loan guarantee for a 395-megawatt solar farm it plans to build in Arizona. First Solar's project finance team met with DOE staff Tuesday to move the company's pending applications forward, First Solar spokesman Alan Bernheimer said. He added that the company hadn't received any notification from the DOE, saying that any application had been put on hold.

Telephone calls to the DOE were not returned.

In a separate announcement, the DOE said Tuesday that it awarded a $90.6 million conditional loan guarantee to Goldman Sachs Group Inc. (GS) unit Cogentrix to build a 30-megawatt solar farm in Colorado.

U.S. solar-panel maker Ascent Solar Technologies Inc. (ASTI), which had applied for a government loan guarantee--under a different DOE program--to expand a factory, said last month that it withdrew that application.

"Timing and funding requirements under the loan guarantee program did not correlate with our revised business plan," Ascent wrote in a report filed April 28 with the U.S. Securities and Exchange Commission.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; [e-mail]