Holdups on a local construction permit could scuttle a $1.36 billion government-backed deal for a solar farm in Southern California.
First Solar Inc., which sold the plant to the Exelon corporation, has yet to receive any payments from a $646 million Department of Energy loan finalized in September because of an issue with a construction permit.
First Solar, one of the world’s largest solar-panel companies, has warned it may have to buy back the plant from Exelon unless Department of Energy funds start flowing in.
From the Wall Street Journal:
Energy Department spokesman Damien LaVera said the agency "continues to support this project" but also that its loan guarantees "have strict conditions in place to protect taxpayers."
The department can only disburse such funds "after all applicable permitting issues are resolved," Mr. LaVera said.
Should the deal fall apart, First Solar would sustain a blow to its developing emphasis on designing, building and selling large solar projects to developers—a strategy that was supposed to keep the company on an even keel amid squeezed margins affecting its solar-manufacturing business, which has seen industry-wide head winds.
First Solar's stock fell 10% to $43.91 in Friday trading on the Nasdaq Stock Market.