SunPower Corp. won a guarantee for $1.24 billion to build a 250-megawatt solar generation project in San Luis Obispo County that it sold last week to NRG Energy Inc. The project, known as the California Valley Solar Ranch, also has an agreement to sell its electricity to PG&E.
"These purchase agreements with the California utilities are like building a factory where you already have a customer lined up to buy all the widgets you make," said Robert Stone, managing director of equity research at Cowen & Co. in Boston.
Stone said the loan guarantees for established companies reduce borrowing costs by about 1.9 percentage points. "It's nice but it's not a show-stopper," he said.
Democratic Defense
In addition to publicly defending the decision to lend to Solyndra and the "green jobs" program, Democrats are using the congressional inquiry to release e-mails they say show the Solyndra application did not receive special treatment.
On the same day Obama defended the programs in an ABC News interview, Democrats on the Energy and Commerce Committee released internal e-mail showing the White House raised concerns about the Energy Department's oversight of Solyndra and acknowledged that by investing in new technology, they run the risk of losing some money. The correspondence also showed debate within the administration about the viability of Solyndra
"There were going to be some companies that did not work out; Solyndra was one of them," Obama said yesterday. "But the process by which the decision was made was on the merits. It was straightforward. And of course there were going to be debates internally when you're dealing with something as complicated as this."
FBI Probe
The prompt response by the FBI and Energy Department after Solyndra abruptly shutdown, could allow Obama to argue that his administration is being as tough on the company as Congress --or more so.
Still, the mere existence of investigations, especially by the FBI, could taint the entire loan program, said Dezenhall and Ari Fleischer, a former spokesman for President George W. Bush and now a crisis communication consultant.
"The fact that the FBI is investigating sends a neutral signal to everyone regardless of party that there's something wrong there," Fleischer said.
"It has the potential to tarnish a whole industry independent of whether or not that industry has the same problem that one company does," Dezenhall added. "Whenever you're dealing with an investigation, it has the whiff of broader implications."ic company, as well as the return of illicit profits and unspecified fines.