First Solar Inc. (Nasdaq: FSLR) has sold two California solar farms that combined will generate 780 MW.
The company has come to terms with GE Energy Financial Services and NextEra Energy Inc. (NYSE:NEE) subsidiary NextEra Energy Resources for the purchase of its 550 MW Desert Sunlight Solar Farm near Desert Center, Calif. First Solar also announced that Exelon Corporation has agreed to acquire Antelope Valley Solar Ranch One, a 230-megawatt (MW) solar photovoltaic (PV) project in northern Los Angeles County, Calif.
Both projects broke ground on construction in September which satisfied a condition set by the Department of Energy for the projects to qualify for loan guarantees awarded to First Solar.
In June, the U.S. Department of Energy announced it would support three First Solar projects with $4.5 billion in loan guarantees. One of the conditions for the government backing was that construction had to begin by Sept. 30, 2011. Both AV Solar Ranch One and Desert Sunlight met that condition and received finalized loan guarantees of $1.46 billion and $646 million respectively.
The 550 MW Topaz Solar Farm, the third project, however, failed to meet this statutory deadline. First Solar is in advanced stage talks to finance or sell Topaz Solar but without government partially backing $1.93 billion in loans this may prove a tougher sale. On September 30, 2011, GE and NextEra agreed to purchase Desert Sun Solar Farm - one day after the DOE approved the loan guarantee.
With the Obama Administration facing increasing pressure for backing now bankrupt solar developers Solyndra LLC and Evergreen Solar Inc. loan guarantees will likely come under higher public scrutiny. What happens with each of these First Solar projects, especially the Topaz Solar Farm, will provide more scope into the analysis of the importance and effectiveness of the government's loan guarantee program.
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