Sempra Wants DOE Loan Guarantees to Expand Low-Cost Solar Plant

Sempra Energy, owner and operator of what some have called the cheapest solar photovoltaic power plant in the world, wants to expand the project from 10 megawatts to 50 megawatts starting this year — but the utility holding company will need federal loan guarantees to do it.

So the timeline for a $200 million expansion of Sempra’s El Dorado solar plant will depend on how fast the Department of Energy can start disbursing loan guarantees called for in the massive stimulus package signed into law last week, Sempra CEO Michael Allman said Friday.

“If we’re able to get the loan subsidy, we could be breaking ground in the second quarter on the world’s largest PV plant,” Allman said at the Pacific Crest Clean Technology Conference in San Francisco. Without it, “It’s still a question mark.” 

Energy Secretary Steven Chu has pledged to speed DOE’s process for getting billions of dollars of grants and loan guarantees in the stimulus bill out to the companies that need them to boost renewable energy and energy efficiency projects. 

But the $6 billion in loan guarantees for renewable energy, energy efficiency and electricity transmission projects will come through a DOE program that has failed to give out a single loan guarantee since it launched in 2005.

The El Dorado project gained attention in December when Pacific Crest analyst Mark Bachman said it was producing electricity at below the price of conventional power in the United States (see First Solar Reached Grid-Parity Milestone, Says Report). The project uses solar panels from First Solar (NSDQ: FSLR) and its power is sold to Pacific Gas & Electric Co. 

Allman wouldn’t reveal the cost of power from El Dorado, saying only that it was the “lowest cost electricity ever produced anywhere in the world from solar power.”

First Solar, which makes cadmium-telluride thin-film solar panels at what is generally acknowledged to be the lowest price in the industry, made a splash this week by reporting that it had cut its costs below the magic $1-per-watt level (see FIrst Solar Cuts Production Costs to $0.98 Per Watt). 

“I don’t know of anyone in the silicon space is coming close to that,” Allman said.

Still, he wouldn’t say whether Sempra had committed to using First Solar panels for its El Dorado expansion, noting that silicon solar panels could see a steep drop in price that makes them worth considering.

Sempra is also seeking federal loan guarantees for an even larger PV project it wants to build in Arizona, Allman said. The Mesquite Solar project outside Phoenix is envisioned to grow as large as 400 megawatts and could cost $1 billion when complete, he said.