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Despite Solyndra's collapse, other solar plants forge ahead

SACRAMENTO, Calif. _ As Republican lawmakers pound the Obama administration for pouring a half-billion dollars into now-bankrupt solar panel maker Solyndra, a much bigger federal government bet on green energy looks to be quietly paying off for California.

Six large solar power plants to help the state meet its ambitious clean electricity goals are proceeding on schedule, according to their developers. Like Solyndra, these projects carry federal loan guarantees _ $7 billion worth in total _ which are considered key to attracting private investment in alternative energy.

The plants are expected to create nearly 4,000 construction jobs over the next five years and an additional 250 permanent jobs after they're up and running. All the power generated will be sold to California utilities at fixed prices under long-term contracts already approved by state regulators.

U.S. taxpayers could still be forced to make good on the debt if any of the projects go awry. Still, the prospect of a financial meltdown similar to Solyndra's appears unlikely, experts said. In contrast to the Fremont, Calif.-based panel maker, which was battered in part by low-cost competition from foreign manufacturers, the power plants are benefiting from state mandates for home-grown clean energy.

"It's like building a hotel and having 100 percent occupancy pre-booked for 20 years before the ground is broken," Damien LaVera, a spokesman for the U.S. Department of Energy, said of the long-term contracts.

Still, Solyndra's collapse has left the renewable-energy sector on the defensive. Congressional committees and cable television pundits have questioned the viability of green technology, its need for subsidies, and whether the federal government should be picking winners and losers in energy markets.

Green advocates counter that global fossil fuel subsidies totaled almost a half-trillion dollars last year, according to the International Energy Agency. Much of the world's oil comes from unstable or undemocratic regimes.

Meanwhile, China has vaulted ahead of the U.S. in the production of wind turbines and solar panels needed to reduce dependence on foreign oil and combat climate change. Beijing has heavily subsidized these emerging industries, creating tens of thousands of jobs in China at a time when U.S. lawmakers are distancing themselves from alternative energy because of the Solyndra scandal.

Green power is "a fat, political target at this particular time," said Jan Smutny-Jones, executive director of the Independent Energy Producers Association. "That's unfortunate, because the vast majority of projects here in California are actually moving forward and creating jobs."

California leads the nation in the production of solar energy and accounts for about a quarter of the estimated 100,000 U.S. solar jobs. That's partly a function of the state's abundant sunshine, but it's due largely to government policy.

This year, state lawmakers and California Gov. Jerry Brown approved legislation requiring all private and municipal electric utilities to get at least one-third of their power from non-fossil fuel sources by 2020. The "renewable portfolio" standard is expected to help California meet a legal mandate to cut carbon dioxide and other greenhouse gas emissions linked to global warming to 1990 levels by the end of the decade. The law calls for an 80 percent decrease by mid-century.

Electric utilities in California see commercial-scale solar, wind and geothermal plants as the fastest way to comply with the state's tough standards. They have signed numerous contracts with developers, who credit federal loan guarantees for helping them attract the private-sector capital they needed to launch. The renewable sector was hit hard by the U.S. financial crisis; a number of startups had difficulty getting financing.

"Many of these projects would not get built had it not been for the loan guarantees," said Brett Prior, a senior analyst with GTM Research in Boston. "With the newer technology, banks are not comfortable lending, so the idea is for the government to step in."


The most advanced of the new crop of California projects is the Ivanpah Solar Electric Generating System being built by BrightSource Energy Inc. in the Mojave Desert near the California-Nevada border. The plant, which uses mirrors to concentrate solar energy to create steam that runs turbines _ has been under construction for a year and is expected to be online by the end of 2013.

At 392 megawatts, the plant will generate enough electricity to power 140,000 homes during periods of maximum demand.

Ivanpah, which also has financial backing from Google Inc. and NRG Energy Inc., got a $1.6 billion federal loan guarantee.

Joe Desmond, BrightSource's senior vice president, said he "has tremendous confidence" that U.S. taxpayers won't lose a dime on his project.

Federal loan guarantees also helped First Solar Inc. of Tempe, Ariz., attract equity investors in two commercial-sized photovoltaic generating stations in California: Antelope near Lancaster and Desert Sunlight near Desert Center in Riverside County.

A third First Solar project, Topaz in San Luis Obispo County, failed to get a Department of Energy loan guarantee before the program ended Sept. 30.

The 230-megawatt Antelope project, which was sold to Exelon Corp., won a federal guarantee for a $646 million loan, and the 550-megawatt Desert Sunlight, which was sold to NextEra Energy Inc. and GE Energy Financial Services, received one for $1.5 billion.

"The DOE's loan guarantee program provided an important source of liquidity to help provide debt financing during a difficult time in the financial markets," said First Solar spokesman Alan Bernheimer.


While many of the California projects have laudable goals, they still need to be carefully scrutinized to ensure they make financial sense, said Tom Schatz, president of Citizens Against Government Waste, a fiscally conservative group in Washington that advocates on spending and tax issues.

"There's a propensity to fund everything that seems like it could be helpful," he said. "Green energy needs to be scrutinized like anything else to see whether or not it's achieving its goals."


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