The largest residential solar project in the U.S., and possibly the world, is alive and well. Despite -- and in some small measure, because of -- the DOE's derailing of the project's loan guarantee application.
The program, dubbed SolarStrong, had SolarCity partnered with military housing developers and would have installed as many as 160,000 solar rooftops on privatized military housing across the country, adding an estimated 371 megawatts of generating capacity. (There were only 166,000 photovoltaic installations in the U.S. at the end of Q1 2011, according to GTM Research.)
But the Department of Energy informed SolarCity that it couldn't finalize the company's $275 million loan guarantee by the Sept. 30 deadline, attributing the decision to the requirements of the Solyndra documentation collection requested by Congress.
Game over? No way.
Armed with the documentation and rationale for this project, SolarCity found a willing partner in Bank of America, which had, in SolarCity CEO Lyndon Rive's words, "become comfortable with this asset class." Rive added that the loan guarantee process provided the discipline to package the project to a lender.
For Bank of America, the residential solar financing asset class sees construction start in a few days without severe environmental restrictions, as would likely be encountered in a utility-scale project.
The project in its current state is dialed back to about 300 megawatts and about 120,000 housing units, with a total cost of $1 billion over the course of the five-year project life, $350 million of which will come from the bank.
Rive remarked that he saw the DOE loan guarantee as a rousing success, despite SolarStrong not receiving the DOE loan. He saw the DOE loan guarantee program as an incentive to attract private capital to the solar market -- and the Bank of America involvement in SolarStrong is a testament to its success. “B of A Merrill never wavered when the loan guarantee wasn’t finalized, and worked with us to create a financing structure that works without it,” said Rive in a company release.
Rive noted that "cost per kilowatt-hour is the only number that matters" and that the price for customers in the SolarStrong program will be at or below the current cost of electricity.
USRG Renewable Finance, a subsidiary of U.S. Renewables Group, was originally a lead lender for the project in partnership with BofA Merrill Lynch. After the DOE loan fell apart, USRG worked as a financial advisor for SolarCity as the project was restructured for a private financing led by BAML.
This could effectively double the total number of residential solar rooftops in the U.S.
The first glimpse of this project came in a story we reported on recently detailing how Hickam Communities and SolarCity started construction on one of the largest solar installations in Hawaii at Joint Base Pearl Harbor-Hickam for more than 2,000 homes.
SolarCity expects SolarStrong to create thousands of temporary and full-time jobs. The company hopes to provide as many of those jobs as possible to U.S. veterans and military family members. On the subject of jobs, Rive notes that the recent trade claim by CASM could have a "massive impact on jobs" since the vast majority of U.S. solar jobs are "focused on the delivery" of solar rather than the manufacturing of hardware. Rive sees the adoption of solar being slowed if a tariff is placed on low-priced solar panels.
Other Renewable Energy Efforts by the Military
The U.S. military, certainly the nation's largest consumer of energy, is rapidly becoming a leader in the deployment of renewable energy.
SolarStrong will help the DOD secure more of its energy from renewable sources -- in parallel with the utility grid.
We recently reported on a military effort in which the Departments of Agriculture and Energy teamed up with the Navy to spend up to $510 million over the next three years to advance drop-in biofuels for aviation and marine applications to power the military.
The U.S. Army just announced the creation of an Energy Initiatives Office to help the agency centrally plan and deploy renewable energy projects. The Army is looking to get 25 percent of its power from renewable sources by 2025.
The Navy also announced a partnership with the DOE’s research arm, ARPA-E, to develop grid-level energy storage. The Navy has set some ambitious clean energy goals for the coming years, including having half of the energy used by the department come from alternative fuel or alternative sources by 2020. Arun Majumdar, Director of ARPA-E, told Greentech Media that he thought the future of fuels was one of the most exciting areas of research during a recent interview at the ARPA-E Summit.