Fwd: Daily Journal Article

[Clint Johns]

DAILY JOURNAL NEWSWIRE ARTICLE
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Message from sender:
Clint- I thought maybe your students would be interested in other thatn the Argus' coverage- as young greentech folks having an understanding of the depth of the issue could be useful.
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May 27, 2010

SOLAR VISIT SPOTLIGHTS CLEANTECH

By Fiona Smith

Daily Journal Staff Writer

President Barack Obama showcased his support for California clean technology Wednesday, visiting the construction site of a major solar panel manufacturing plant that broke ground in Fremont thanks to a government loan guarantee.

The Energy Department, which finalized a $535 million loan guarantee to solar startup Solyndra, Inc. in September, is using the program to create jobs and boost renewable energy production and the alternative vehicle industry.

"Around the world, from China to Germany, our competitors are waging a historic effort to lead in developing new energy technologies," Obama said in a speech given at Solyndra. "There are factories like this being built in China, factories like this being built in Germany. Nobody is playing for second place. These countries recognize that the nation that leads the clean energy economy is likely to lead the global economy. And if we fail to recognize that same imperative, we risk falling behind."

While the renewable energy industry has hailed the administration's support, some have criticized the program for being too slow to get money flowing. Solyndra waited more than two years to get its loan guarantee, and others have been waiting longer, according to the Solar Energy Industries Association. The loan guarantee program was first created in 2005 under President George W. Bush, but no money was allocated for the program until President Obama took office.

The Energy Department plans to authorize roughly $60 billion worth of loan guarantees for renewable energy projects, with some of that money coming from the American Recovery and Reinvestment Act signed in 2009. Applying for a loan guarantee entails a lengthy application process and requires companies to put up some of their own money for the project.

While 10 other companies, including four from California, have received conditional loan guarantee offers from the Energy Department since 2009, Solyndra is only one of three companies to finalize their loans. Nissan Motor Corp., which got $1.4 billion to build electric cars, and Ford Motor Corp., which received a $5.9 billion guarantee to build more fuel efficient cars, have also closed loans. California companies still waiting to close their loans are: solar company BrightSource Energy, Inc., wind turbine manufacturer Nordic Windpower, Inc. and alternative carmakers Tesla Motors, Inc. and Fisker Automotive, Inc.

"The program is improving. I think we're all a little disappointed that we haven't seen more term sheets signed and loans closed but we do think DOE is making an effort to get the program underway and we're starting to see the logjam give way," said Edward Zaelke, the Los Angeles managing partner of Chadbourne & Parke who focuses on renewable energy project development.

It is the larger companies making larger deals that have had the time and money to iron out the kinks in the loan guarantee process so far, but as more loans close, they should create a template to allow smaller deals to move faster in the future, said Zaelke, whose firm is advising BrightSource Energy in its negotiations with the Energy Department for a $1.37 billion loan guarantee.

The Solar Energy Industries Association, which represents close to 900 solar companies, has demanded changes to speed the program up and expand its reach. In March, it released recommendations to improve the program, stating that it has not yet lived up to its promise.Energy Department officials should finalize the pending loans in the next six months, extend the December 2010 deadline for eligible projects to begin construction and restore $2 billion that was taken from the program to fund the Cash for Clunkers vehicle trade-in program, according to SEIA.

Ensuring the projects are viable, that taxpayer money is being spent properly and getting through project environmental reviews all takes time, said Matt Rogers, a senior advisor to Energy Secretary Steven Chu, in a conference call Tuesday.

"Each one is a unique animal and they come through the pipeline at different rates, but the maturity of the pipeline indicates an accelerated pace," for future loan guarantee announcements, Rogers said.

On Monday, the administration requested that Congress provide an additional $90 million in renewable energy loan guarantees as part of an upcoming supplemental appropriations bill. Combined with the partial financing companies must come up with for their own projects, that would translate into a total of $500 million, Rogers said.

fiona...@dailyjournal.com

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