Energy Department Analysis: Loan Guarantee Program Launched Utility-Scale Photovoltaic Solar Market in the United States
The U.S. Department of Energy’s (DOE) Loan Programs Office (LPO)recently released new numbers on how the Obama Administration’s early support for solar photovoltaic (PV) projects led to a massive expansion of large-scale solar farms. According to today’s update to a 2015 report, the loans provided by DOE to the first five utility-scale solar PV projects larger than 100 megawatts (MW) in the United States helped demonstrate the technology’s success to the market and led to the private financing of an additional 45 utility-scale solar PV projects, a ten-fold increase.
The announcement coincided with the dedication ceremony for the 150-megawatt (MW) Mesquite Solar 3 PV solar project in Maricopa County, Arizona – a project that was preceded by the nearby 170-MW Mesquite Solar 1, which received a $337 million DOE loan guarantee in 2011, paving the way for this non-DOE funded solar PV project and dozens more like it. The Mesquite Solar 3 project will help power fourteen Navy installations in southern California.
“When the Obama administration began, there were zero large-scale solar PV projects in the United States. Our Loan Programs Office committed funding for the first five, and today we can say 45 more have been built with private financing, opening a clean energy market that did not exist before,” said Secretary of Energy Ernest Moniz. “Mesquite Solar 1 and 3 exemplify how the Energy Department provides crucial early financing and technical support to demonstrate cutting-edge projects at commercial scale to support new markets, work with lenders, and provide confidence to investors so the Department can then step aside to let industry take over. We’re excited for the ongoing opportunity to help more innovative technologies overcome hurdles to commercial maturity.”
Before LPO provided loan guarantees to the first utility scale PV facilities, developers faced challenges securing the financing necessary to build these large projects. LPO helped to address this market barrier by providing more than $4.6 billion in loan guarantees in 2011.
Currently, LPO supports a large, diverse portfolio of more than $30 billion in loans, loan guarantees, and commitments, supporting more than 30 closed and committed projects. This portfolio is helping to advance the nation’s all-of-the-above energy strategy through projects including the first nuclear power plant to begin construction in the U.S. in the last three decades, one of the world’s largest wind farms, several of the world’s largest solar generation and thermal energy storage systems, and more than a dozen new or retooled auto manufacturing plants across the country.