Solar Firm That Turned Down Gov't Loan Fails — But Are Taxpayers Really Off the Hook?

By:  Michael Tennant
04/05/2012
       
Solar Firm That Turned Down Gov't Loan Fails — But Are Taxpayers Really Off the Hook?

Solar Trust of America, an energy firm based in Oakland, California, declared bankruptcy on April 2, fewer than 10 months after breaking ground on a project near Blythe, California, that was to be the world’s largest solar power energy project built on public lands. In its bankruptcy filing, the company claims to have assets of up to $10 million. Those assets, however, are dubious, consisting primarily of the Blythe project and another project in Riverside County, California, neither of which has gotten off the ground. Meanwhile, its liabilities may run as high as $100 million.

 

Solar Trust of America, an energy firm based in Oakland, California, declared bankruptcy on April 2, fewer than 10 months after breaking ground on a project near Blythe, California, that was to be the world’s largest solar power energy project built on public lands. In its bankruptcy filing, the company claims to have assets of up to $10 million. Those assets, however, are dubious, consisting primarily of the Blythe project and another project in Riverside County, California, neither of which has gotten off the ground. Meanwhile, its liabilities may run as high as $100 million.

The Blythe Solar Power Project, which was supposed to generate 1,000 megawatts of electricity — enough to power 300,000 homes — was highly touted by the Obama administration. Interior Secretary Ken Salazar — who, along with Bureau of Land Management Director Bob Abbey and California Gov. Jerry Brown, attended the groundbreaking ceremony for the project — called the event “a historic moment in America’s new energy frontier.”

President Barack Obama’s Department of Energy (DOE) had also extended $2.1 billion in loan guarantees to the project — “the largest amount ever offered to a solar project through … the Department’s Loan Programs Office,” according to Energy Secretary Steven Chu’s announcement of the offer, and the second largest loan in DOE history. Chu was proud of the department’s involvement in the project, saying it would help meet the President’s goal of “doubling the amount of electricity we generate from clean energy sources by 2035 … while creating jobs and positioning the U.S. to lead in the solar industry.”

Based on reports from several reputable sources, The New American reported in an earlier version of this article, that Solar Trust had accepted the loan guarantees and that, therefore, taxpayers were on the hook for the $2.1 billion that the company would now be unable to repay.

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