County solar project fails to get fed loan guarantee

Correction
CORRECTION -- 10/05/11 -- A story in Saturday’s Review-Journal incorrectly reported that the Spectrum Solar project near Apex failed to close on a federal loan guarantee. The loan guarantee application was for a second project in Apex being developed by the same company, Fotowatio Renewable Ventures.

WASHINGTON -- The company developing a solar power plant in Clark County failed to close Friday on a federal loan guarantee that would help obtain financing for the project, a Department of Energy official said.

It was not clear what effect that development would have on the planned Spectrum Solar plant near Apex that developers said could generate power for 7,000 homes.

Neither officials for Fotowatio Renewable Ventures nor federal loan program officials could be reached late Friday. A DOE spokesman confirmed the Nevada project would fail to complete the loan process before the federal guarantee program expired at midnight.

The 20-megawatt photovoltaic facility that would use solar panels to convert sunlight into electricity is being planned 25 miles northeast of Las Vegas. Sponsors said 250 jobs would be created during construction. Four permanent positions would be filled when the plant is operational.

The developer, a subsidiary of Fotowatio Renewable Ventures, was sold a month ago to MEMC Electronic Materials and its solar energy subsidiary, SunEdison.

With backing from Nevada members of Congress, Energy Secretary Steven Chu in June announced DOE was offering a conditional commitment for a $45.6 million partial loan guarantee for the plant, contingent on a series of financial reviews.

Federal loan guarantees help companies obtain private financing by guaranteeing that the government will pay off lenders if a project fails.

This particular loan program, created by the 2009 economic stimulus law to spur development of renewable energy, was especially prized by applicants because it picked up the cost of credit insurance that would otherwise be paid by borrowers, a savings of millions of dollars.

Tom Kimbis, a vice president of the Solar Energy Industries Association, said that without federal backing, the developers "are going to have to look for alternative sources of financing in the private sector." The availability of capital and borrowing terms "is very deal specific right now."

On Wednesday, the 110-megawatt Crescent Dunes solar project northwest of Tonopah was awarded a $737 million federal loan guarantee that was key to finalizing its financing.

Also, the Energy Department through the stimulus program has granted loan guarantees totaling $791.5 million for geothermal projects in the state and for the One Nevada transmission line to carry electricity from Ely to Las Vegas .

 

Rules for posting comments

Comments posted below are from readers. In no way do they represent the view of Stephens Media LLC or this newspaper. This is a public forum. Read our guidelines for posting. If you believe that a commenter has not followed these guidelines, please click the FLAG icon next to the comment.