Secretary of Energy, Steven Chu said, "this is the largest domestic residential rooftop solar project in history," as he announced a $344 million federal loan guarantee that will allow SolarCity to install 160,000 rooftop solar energy collectors, at 124 military bases in 34 states, reports Steve Hargreaves, of CNN Money, in New SolarCity deal will double U.S. rooftop solar power.
SolarCity's Solar Panels, PhotoCredit" Steve Hargreaves, CNN Money
The complex plan calls for SolarCity to receive a $344 million Department of Energy-backed loan from financiers U.S. Renewables Group and Bank of America.
SolarCity will own and operating the solar panels, and the companies that own the housing unites will send a monthly check to SolarCity for the electricity.
For the government, the deal allows the U.S. military to move toward its goal of getting 25% of its electricity from renewable power by 2025. It also furthers the Energy Department's goal of supporting the commercialization of solar power.
"This is the largest domestic residential rooftop solar project in history," Energy Secretary Steven Chu said in a statement announcing the deal. "It can also be a model for other large-scale rooftop solar projects that help America regain its lead in the solar industry."
Even though the amount of the federal loan guarentee is much smaller than many of the other solar projects we've heard about, the magic of this project is in the financing of a tremendous number of final rooftop installations with private capital.
Coming just weeks after solar equipment makers, Solyndra and Evergreen went into bankruptcy, this announcement bolsters confidence that the US Government will not abandon it's support of the US solar power industry. While demand for the final rooftop modules is skyrocketing, an industry shakeout is occurring in firms that supply equipment to manufacturers of solar photovoltaics.
Because SolarCity is on the final delivery of product end of the value chain, with such a large five year delivery contract, it should be a much safer investment.
Rive stressed how the deal is nearly risk-free for the lenders and government, with SolarCity putting up its own money for the panels and only getting reimbursed by its lenders after each project is complete. ... SolarCity predicts that the initiative will create 6,000 jobs over the next five years. ...
It was the loan guarantee from the government and SolarCity's willingness to use its own cash at first that enabled the firm to get such a low-interest loan from commercial lenders...
"Now the solar industry has a debt model that can make distributed generation affordable on a massive scale," he said.
This is more good news for the solar industry where rapidly falling prices, are creating challenges for some suppliers, but big opportunities for more customers to convert to renewable energy generation.
And, despite the misfortunes for Solyndra, and Evergreen, the Obama Administration's wise, visionary, and strategic investments, loan guarentees, and benchmarks for the solar, wind, and other renewable energy industries have been a tremendous success, and deserve much praise.
As, someone who has been highly critical of the size of the defense budget, it feels odd to offer such high praise for the outstanding leadership that the Department of Defense is showing in leading the way forward in converting to alternative energy generation, however, a job so well done, deserves recognition.
When the DOD commits itself to such large contracts, and ambitious goals, it helps these emerging industries to build infrastructure, hire and train workers, qualify for additional loans, and push themselves down the learning curve, and lowering their manufacturing costs, which enables them to lower prices, thereby further expanding the market.
This can be a model for many other programs to revive our economy. And, and model President Obama should expand to other infrastructure investment, and job creating economic stimulus projects.
This is one area all Democrats can happily say, "job well done, President Obama."
PS: I've been on vacation with my son, visiting my Mom, and family in PA, which is why I haven't posted anything for the last week and a half. This article inspired me to drop you all a quick note. Hope you all are enjoying the last bit of summer vacation you might have left. Or, perhaps, take inspiration from those of us, who can extend the summer into September. -- Cheers.
5:36 PM PT: Here's an inspirational plot showing the Department of Energy's projections of solar photovoltaic market penetration, and system costs.