ALTERNATE ENERGY: $535m Solar-Plant govt. support

GOVERNMENT SUPPORT NEEDED

The Energy Department will give a $535 million loan guarantee to Solyndra Inc. so the solar-panel maker can manufacture photovoltaic panels at a plant that will employ 1,000 people, a person familiar with decision said.

The department offered the closely held Fremont, California, company the loan guarantee in March, pending Solyndra securing its portion of the financing. Vice President Joe Biden will announce the award via satellite today, and Energy Secretary Stephen Chu will attend a ceremony in Fremont, according to the person who asked not to be identified because the agreement wasn’t public.

Money for the loan guarantee came from the economic stimulus plan signed by President Barack Obama in February. The Energy Department is preparing to dole out about $83 billion in loan guarantees for energy projects that reduce greenhouse gas emissions.

“We expect additional loan guarantee announcements before the end of the year, but believe the program won’t gain real momentum until mid-2010,” said K. Whitney Stanco, an analyst for investment adviser Washington Research Group.

The loan guarantee covers 73 percent of the plant’s cost and the company is responsible for the balance, Stanco said. The plant will have a manufacturing capacity of 500 megawatts a year. In 2008, solar power accounted for 514 megawatts of consumption, or a fraction of 1 percent of U.S. power use, according to the Energy Department.

The company said in March the project will create as many as 3,000 construction jobs and 1,000 long-term jobs.

Toyota Motor Corp. said last week it will shut a Fremont plant it has run with General Motors Corp. for 25 years. The car factory employs 5,400 people, including almost 4,600 union workers.

Lawmakers, trying to encourage a shift to clean-energy sources such as wind, solar, and bio-fuel have sought to stretch government funds by using loan guarantees instead of grants or direct support.

Solyndra’s backers include Richard Branson’s Virgin Group Ltd. Solyndra said in July it has more than $2 billion in orders and is sending shipments to customers in Europe and the U.S. The Associated Press reported the loan guarantee earlier today.