America’s largest residential solar power project will go ahead with the company behind the initiative, SolarCity Corporation, securing financial backing from Bank of America Merrill Lynch (BofA Merrill).
SolarCity’s $1 billion "SolarStrong" plan to install solar power systems on 160,000 private military homes was put in jeopardy after the company failed to meet a tightened deadline for a $344 million Department of Energy federal loan guarantee celebrated by SolarCity back in September.
The DOE’s Section 1705 loan guarantee program, which supports the start-up costs of large-scale solar energy projects, faced intense scrutiny and heightened restrictions in the aftermath of the Solyndra affair. Despite reaching a partial agreement on Sept. 7, the parties failed to finalize the deal before the Sept. 30 deadline.
At the time U.S. Energy Secretary Steven Chu hailed the project as a model for large-scale rooftop solar projects that would help America regain its lead in the solar industry.
BofA Merrill partnered with USRG Renewable Finance and SolarCity in the stringent DOE loans application process and, according to SolarCity CEO Lyndon Rive, never wavered in their support of the SolarStrong project.
"SolarStrong makes affordable clean energy available on a much greater scale. 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," Rive said.
Under the new private equity loan arrangements with BofA Merrill, the plan will be scaled back. Although still expected to be the biggest rooftop solar installation in U.S history, SolarStrong will install solar power systems on 120,000 military homes instead of 160,000.
SolarCity still expects the project to generate over 300 megawatts of solar power each year and create thousands of jobs during the installation process.
