First Solar snags nearly $4 billion in loan guarantees

Thin-film solar panel manufacturer First Solar has secured nearly $4 billion in conditional loan guarantees from the U.S. Department of Energy for three solar panel projects.

The Department of Energy has awarded First Solar a $680 million conditional loan guarantee for its Antelope Valley Solar Ranch 1 project. The government has also awarded the company partial loan guarantees for First Solar’s Topaz Solar and Desert Sunlight projects. First Solar is shooting for $1.93 billion and $1.88 billion loans for those projects, respectively. The three California projects will generate around 1,330 megawatts of power altogether.

This is the U.S. Department of Energy’s largest single commitment to a solar power company to date. The program has allotted around $16 billion to solar power projects and $38 billion to clean technology projects.

A loan guarantee from the Department of Energy helps companies like First Solar attract buyers and investors for new renewable energy projects. Basically it means the government will foot the bill if the project does not take off or is unable to produce some kind of return for investors. It’s one of the ways the U.S. government is promoting renewable energy.

First Solar was the first company to bring the cost of solar power down below $1 per watt. The company manufactures thin-film solar panels from a Cadmium-Telluride (CdTe) compound. Those solar panels have a lower efficiency rating than crystalline silicon panels, but can operate in a wider range of environments. For example, CdTe solar panels perform better and generate more power in days with more cloud cover than crystalline silicon panels.

First Solar became the last major U.S.-based independent solar panel manufacturer after French oil company Total bought a majority stake in SunPower. But it also struggled to grow in its most recent operating quarter, and the company had a lukewarm outlook for the remainder of the year. It’s essentially the last major player on the solar panel manufacturing stage.