A major residential solar project was nearly derailed in September as Solyndra’s bankruptcy jolted the federal loan guarantee program.
SolarCity and Bank of America Merrill Lynch (NYSE: BAC) announced SolarStrong, a program that would put 160,000 solar power systems on military homes. But they were hoping for guarantees on $344 million in loans to make it possible.
The government had offered an 80% guarantee on this loan for a project that would extend across 33 U.S. military bases and generate 371 megawatts of solar-powered energy, according to Forbes.
But after the Solyndra fiasco, the loan guarantee could not be carried out in time.
This didn’t stop the two companies, however, which decided to take matters into their own hands.
Though the project financing went up once the loan guarantee was gone, Bank of America has been able to create a plan for their loans toward the project.
SolarCity has scaled back the project a bit to make up for the loss, now aiming for 120,000 solar arrays instead of 160,000.
But officials are still positive. As CEO of SolarCity Lyndon Rive told USA Today:
“This is uncharted territory for residential solar. The fact that SolarStrong can move forward without a federal loan guarantee is a clear indication that long-term incentives such as the investment tax credit are working.”
And it is also made possible by still-falling solar panel prices. A year ago, this sort of thing couldn’t have happened.
Bank of America’s Jonathan Plowe told Forbes that it is also due to their experience in Project Amp, a huge solar project led by NRG Energy (NYSE: NRG) that Bank of America Merrill Lynch funded, albeit with a loan guarantee.
This experience in solar financing has helped show the company what could be possible and what sort of funding plans are best to use, Plowe said.
As Forbes reports, the companies aren’t going into the project without any help at all. They have been granted a 30% federal tax subsidy that will last until 2016.
The project will still be extensive. Lyndon Rive told Forbes that it will probably create thousands of jobs, and “we’ll have a big focus on hiring veterans.”
SolarStrong is aimed at helping those who serve the country, and is taking its job seriously.
That’s all for now,