I've just spent some time watching, and re-watching, and re-re-watchingsolarand business experts Bill O'Reilly, Steve Doocy, Megyn Kelly, Lou Dobbs, and Michelle Malkin pillory SunPower, which received a $1.2 billion Department of Energy Loan guarantee.
Fox is analyzing, in their unique style, the $1.237 billion loan guarantee from the DOE to support the 250-megawatt California Valley Solar Ranch Project in San Luis Obispo County, CA sponsored by SunPower and just acquired by NRG Energy (NYSE: NRG). Construction of the CVSR is in progress, and the first phase of the project looks to start generating power early in 2012.
Fox did not give SunPower a chance to respond -- but we do below, along with providing our own analysis.
Fox equates SunPower with Solyndra, the recently bankrupt DOE loan recipient.
SunPower is one of the world's top-ten solar manufacturers with a downstream project development arm. They recently received a $1.38 billion investment from French oil giant Total and build the world's most efficient solar panels. They sell these panels in high volume, often at a profit.
SunPower is borrowing money to finance this project because these projects are almost always financed with debt.
Fox claims that SunPower is in financial trouble.
GTM Research Managing Director Shayle Kann was quoted in an excellent article in Media Matters. This is what Kann said:
"I would place the odds of SunPower defaulting [on the loan guarantee] at almost zero," Shayle Kann, a solar power market expert at GTM Research, said. Kann added, "They've already got financing in place and a guaranteed purchaser for the power." Kann called SunPower "a pretty big success story" and said that if the project were completed today, "it would be the largest solar generating facility in the world, which is part of why they needed the loan guarantee -- private financing would have been more difficult to attain otherwise."
SunPower's stock price is indeed suffering -- as are the stock prices of most every publicly held solar company. This has been a difficult year for solar manufacturers with falling average selling prices (ASPs), overcapacity in the market, and murky subsidy outlooks. SunPower did lower their third quarter and 2011 guidance numbers. (SunPower's balance sheet can be found here.)
Fox claims that 15 jobs will have been created by the loan guarantee and that they are in Mexicali, Mexico.
Most of the solar panels for the California Valley Solar Ranch will be sourced from our manufacturing facility in California's Silicon Valley. Because of the magnitude of the plant -- at 250 megawatts, it is one of the first central station solar PV plants in the world -- we also need to source panels from our facilities in Mexico and Asia. Our Silicon Valley manufacturing facility will deliver panels to CVSR using equipment sourced from four U.S. states: Oregon, Colorado, Illinois and Pennsylvania, and using silicon that comes from Michigan.
The recently announced Mexicali facility is a shift from ongoing manufacturing with a partner to our own plant. The loan guarantee, issued to NRG, does not finance SunPower’s manufacturing facilities or other operations in Silicon Valley, where we manufacture today, Mexicali, or anywhere else.
During the 2-year construction period, CVSR will create 350 construction jobs, at good wages in an area of high unemployment. The project will also inject nearly $315 million into the local economy during that time. The California Valley Solar Ranch website lists the type of jobs, as well as other information about the project. Construction has begun at the site.
Approximately 15 long-term jobs will be created for operation of the project.
Additionally SunPower, headquartered in Silicon Valley, has created thousands of jobs in 45 U.S. states, delivering solar systems to thousands of homes, businesses and public facilities, as well as power plants around the country. The company’s U.S. operations created more than 100 jobs at our Silicon Valley manufacturing plant, more than 1,000 SunPower employees in the U.S., and more than 6,000 jobs created by more than 400 independent dealers around the U.S. who sell and install our solar technology for homes and businesses. SunPower manufacturing creates jobs and economic benefits for 26 parts suppliers in 19 states.
Fox News alleges that Congressman George Miller's son, as a lobbyist for SunPower, influenced the loan decision.
SunPower's response to that allegation:
George Miller IV had no role in the loan guarantee or the California Valley Solar Ranch project and does not lobby in D.C. for SunPower. His firm -- Lang, Hansen, O’Malley and Miller -- represents us in California.
Brian Harrison, the CEO of Solyndra, resigned last week. He leaves in his wake a congressional and media frenzy framing these DOE loans as corrupt transactions. The Solyndra effect has already fatally impacted the SolarStrong project from SolarCity.
Here are some facts and figures on the CVSR project:
The 250-megawatt project would include solar arrays covering nearly 1,900 acres, an electric substation, operations and maintenance facilities, public viewing areas, and an approximately 2.8‐mile, 230-kV generation tie-line.
Size: 250 MW-ac
Total cost: $1,637M ($6.55/W-ac)
Equity: $450M from NRG Energy
Expected break ground date: 2H11
PPA with PG&E for 25 yrs
Tracking: 1-axis (SunPower T0)