|By: Alex Guillen
April 4, 2012 05:32 PM EDT
|Monday’s news that yet another solar company that received Energy Department backing is filing for bankruptcy protection at first looked like the Obama administration had funded another expensive loser.
But unlike Solyndra’s high-profile and costly flameout, this time the news came with a twist that tripped up wire services, talking heads and members of Congress.
The company, Solar Trust, never took the money.
The misunderstanding underscores the complexities of DOE’s loan guarantee program, the uncertainty of the global solar market and the eagerness of many in the media to discover the next Solyndra.
Right-leaning blogs and websites seized on the news with headlines blaring about $2 billion of taxpayers’ money lost — even if the accompanying story correctly noted that Solar Trust never got a dime.
“One year ago this outfit got $2.1 billion in taxpayer loans,” Rush Limbaugh said on his radio program Tuesday. “So down the tubes. Solyndra was solar panels, and now Solar Trust of America has filed bankruptcy.”
Rep. David Schweikert (R-Ariz.) took to Twitter on Tuesday to lament the failure: “This costs us $2.1 bill. Equal to all ‘Big Oil’ tax breaks last yr.”
Even The Associated Press and Reuters got it wrong.
Solar Trust’s project in Blythe, Calif.— which would have been one of the largest solar farms in the world — received a conditional commitment for a $2.1 billion loan guarantee from DOE in April 2011.
The deal, almost four times as large as Solyndra’s, got star treatment from administration officials. Energy Secretary Steven Chu lauded it in a White House blog post, and Interior Secretary Ken Salazar attended the project’s groundbreaking ceremony in June. (It’s located on federally controlled land).
But in August, Solar Trust essentially walked away from the deal.
The company wanted to use photovoltaic panels, a cheaper and older technology than the concentrating solar power technology that DOE’s support required.
“Whereas the electricity from solar-thermal power plants was more economic only less than two years ago, this relation has changed completely due to the sharp drop in PV module prices, particularly from Asia,” Cristoph Wolff, then the CEO of Solar Trust’s parent company, Germany-based Solar Millennium, said at the time.
That assessment is close to what happened to Solyndra, which received a $535 million loan guarantee but went out of business partly because its unique, cylindrical solar panels couldn’t compete with traditional photovoltaics’ pricing.
The terms of Solar Trust’s conditional loan guarantee required the project to use a newer, more expensive technology, and the company decided it would rather find private financing.
The guarantee was never finalized. DOE confirmed to POLITICO on Monday that no money went out on the deal.
Solar Trust’s conditional commitment, which was not a binding contract, was far more widely reported than the company’s quiet withdrawal from the deal.
And the details surrounding the company’s insolvency — a parent company in the red — only complicated matters.
The future of the Blythe project is not yet certain. Solar Trust’s court filing noted that NextEra Energy Resources, a subsidiary of the Florida-based energy company NextEra, was interested in purchasing some of its projects, although it didn’t specify which ones.
NextEra declined to comment on Wednesday.
Rep. Morgan Griffith (R-Va.), speaking to POLITICO on Wednesday, cited Solar Trust alongside Solyndra as examples of the loan program’s failures.
Griffith, a member of the Energy and Commerce’s oversight committee, which is looking into Solyndra, noted that he stood corrected when told the money was never spent.
“Of course, aren’t we glad they turned it down, from a taxpayer’s standpoint … because then we’d be out $2.1 billion,” he added.
This article first appeared on POLITICO Pro at 5:19 p.m. on April 4, 2012.