Solyndra nabs $535M DOE loan guarantee for 500 MW factory

The U.S. Department of Energy has offered a $535 million loan guarantee to Fremont, Calif.-based solar cylinder developer Solyndra to expand its manufacturing, the company said today.

The money is expected to cover 73 percent of the cost to build a 500 megawatt factory in California, making the total project cost nearly $733 million. Solyndra had previously said it planned to build a 420 MW capacity plant (see Solyndra reveals thin-film solar tubes).

Mike Grunow, senior director of marketing for Solyndra, told the Cleantech Group the new facility is going to be located near Solyndra's factory in Fremont. The factory began limited production in July and is still ramping to its production capacity of 110 MW per year, Grunow said.

Solyndra is waiting for the loan to close but expects to begin construction in the second half of 2009, Grunow said. The funding is subject to final DOE approval "upon completion of definitive documentation and satisfaction of certain conditions precedent," Solyndra said in a news release.

Initial production is expected to begin in late 2010, Grunow said.

Solyndra said the loan is the first to come from the U.S. Treasury's Federal Financing Bank under the Energy Policy Act of 2005.

The news comes amid talk that Solyndra has closed a financing round of more than $100 million. The company already has significant financial backing—$820 million, according to estimates.

Grunow said it is "not appropriate for Solyndra to comment on any future equity activity."

In the last days of 2008, the company raised $219.2 million from 23 investors, including Argonaut Ventures, U.S. Venture Partners, CMEA Capital and Redpoint Ventures (see Solyndra closes 2008 with $220M financing round). Solyndra CEO Chris Gronet previously told the Cleantech Group that Solyndra raised $600 million in equity from investors including Virgin Green Fund, Madrone Capital Partners and RockPort Capital Partners. It was reported in 2007 that Solyndra raised $79 million (see Swiss cleantech and ocean power).

Last year, Solyndra came out of stealth mode to reveal its entry into the solar race—long cylinders coated in thin-film material inside glass tubes, which line up inside aluminum frames.

See Solyndra's technology here >>

Solyndra says the tubes allow the CIGS material to capture optimal sunlight for a longer period than traditional flat panels. Solyndra’s 180-watt-peak panels—each made up of 40 cylinders in a one-meter by two-meter aluminum frame—have an efficiency of 12 percent to 14 percent, the company says.

Upon coming out of stealth mode last year, Solyndra did not have third-party verification of its technological claims. But Solyndra now says the DOE has looked extensively into the technology.

"DOE, in consultation with independent consultants, performed a thorough investigation and analysis of our project’s financial, technical and legal strengths," said Kelly Truman, Solyndra’s vice president of marketing, sales and business development, in the news release.

In November, Solyndra announced a $320 million deal to provide its thin-film solar tubes to a division of commercial roofing manufacturer Carlisle Construction Materials, bringing its announced deals to-date to $1.52 billion (see Solyndra inks $320M deal with roofing maker Carlisle).

The company estimates that the plant construction will employ 3,000, while the factory operation will require 1,000 employees. Over its lifetime, the plant will produce 15 GW of solar panels, Solyndra said.

"The DOE Loan Guarantee Program funding will enable Solyndra to achieve the economies of scale needed to deliver solar electricity at prices that are competitive with utility rates," Gronet said in a news release. "This expansion is really about creating new jobs while meaningfully impacting global warming."

Solyndra isn't the only high profile Silicon Valley cleantech company relying on DOE funds for the completion of a second factory. 

San Carlos, Calif.-based Tesla Motors is awaiting word on a $350 million loan application to the Department of Energy that would allow the electric carmaker to build a new $250 million factory in San Jose for its Model S sedan, which is expected to cost $57,400 (see Tesla Motors on an upswing?). Tesla scrapped plans to build on undeveloped land in San Jose because it would not qualify for the DOE funds (see Tesla CEO says carmaker is bouncing back and Tesla to build factory, new HQ in San Jose).

Tesla plans to unveil the Model S on March 26 and plans to begin shipping the vehicle in late 2011.

See a sneek peak of the Model S here »

Tesla CEO Elon Musk said this week that the company has delivered 250 of its $109,000 Roadsters. The company is producing 20 a week but expects to ramp to 30 a week by this summer, Musk said. The waiting list is about 1,000 people, with the company sold out through October (Tesla previously said it was sold out through November).

Earlier this month, Tesla began selling the Roadsters in Canada.

Also applying for a DOE loan is Oslo, Norway's electric car maker Think Global's U.S. subsidiary, Think North America. Think hopes to secure the funding for an electric vehicle factory to make 16,000 Th!nk City vehicles a year and employ 300 workers (see Think says U.S. electric car market is overtaking Europe).

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