In The New York Times article, "Energy Department Issues First Renewable-Energy Loan Guarantee," the DOE "has tentatively awarded its first alternative-energy loan guarantee, breaking a four-year logjam in the federal loan program." Clean technology companies may want to consider taking advantage this program to expand business operations including product research and development.
The Energy Policy Act of 2005 (EPAct05) authorizes the DOE to issue loan guarantees to eligible projects that "avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases" and "employ new or significantly improved technologies as compared to technologies in service in the United States at the time the guarantee is issued."
Under the Recovery Act Program, the United States Congress has authorized the DOE to spend $16.8 Billion for Energy Effeciency and Renewable Energy. In addition, $6 Billion is allocated to underwrite up to $60 Billion in loans under DOE's Loan Guarantee Program.
According to the DOE's press release, "Solyndra's photovoltaic systems are designed to provide the lowest installed cost and the highest solar electricity output on commercial, industrial and institutional roof tops, which are a vast, underutilized resource for the distributed generation of clean electricity. Solyndra's proprietary design transforms glass tubes into high performance photovoltaic panels which are simple and inexpensive to install. By replacing power generated from fossil fuel sources, the electricity produced from the solar panels will reduce emissions of greenhouse gases."
Solyndra is currently ramping up production in its initial manufacturing facilities. Once finalized, the DOE loan guarantee will enable the company to build and operate its manufacturing processes at full commercial scale. Solyndra estimates that:
- The construction of this complex will employ approximately 3,000 people;
- The operation of the facility will create over 1,000 jobs in the United States;
- The installation of these panels will create hundreds of additional jobs in the United States.
- The commercialization of this technology is expected to then be duplicated in multiple other manufacturing facilities.
The loan guarantee to Solyndra is a "conditional commitment" pending approval by the DOE's Credit Review Board. Similar to homebuyers who have been approved for a loan are required to meet certain conditions before closing, the conditional commitment will require Solyndra to meet an equity commitment as well as other conditions prior to closing.
The DOE explains its review process: "Before offering a conditional commitment, DOE takes significant steps to ensure risks are properly mitigated for each project prior to approval for closing of a loan guarantee. The Department performs due diligence on all projects, including a thorough investigation and analysis of each project’s financial, technical and legal strengths and weaknesses. In addition to the underwriting and due diligence process, each project is reviewed in consultation with independent consultants."