* Three California projects win Energy Dept. loan backing
* Plants will total 1,330 MW when completed
* Shares rise 7 percent
(Adds analyst comment, background, updates share price)
NEW YORK/WASHINGTON, June 30 The U.S.
Department of Energy awarded First Solar (FSLR.O) conditional
loan guarantees worth $4.5 billion for three of its biggest
power plants in California, lifting the company's shares 7
Investors had been anxiously awaiting news on the loan
guarantees, which will sharply lower the cost of building the
plants. The facilities will have a total capacity of about
1,330 megawatts, 30 percent more than a large nuclear power
First Solar, which makes the lowest-cost photovoltaic
panels in the industry, has entered the power plant building
business in recent years as a means to help create a pipeline
of demand for its products.
The loan guarantees, announced on Thursday, offer
protection for investors who lend funds to the company to build
the projects, and will help the company find buyers for
"They still have to get some of the equity commitments for
some of the plants," said Ardour Capital analyst Adam Krop.
"But we've seen a lot of interest for these projects. I don't
think that will be problem."
The company received a conditional commitment for a U.S.
loan guarantee of $967 million for its 290-MW Agua Caliente
plant in January. It announced in December that it would sell
that plant to power company NRG Energy Inc (NRG.N) for up to
First Solar, the largest solar company in the world by
market value, has a pipeline of power plant projects totaling
2,400 MW. It expects to have module production capacity of
2,820 MW annually by the end of 2012.
The Energy Department program that grants renewable power
projects the guarantees on loans to secure financing will
expire later this year, removing a key support for an industry
that depends on subsidies in most locations to compete against
The Energy Department said the conditional loan guarantees
for First Solar include $680 million for the 230-MW Antelope
Valley Solar Ranch project, $1.88 billion for the 550-MW Desert
Sunlight project, and $1.93 billion for the 550-MW Topaz Solar
The Antelope Valley plant has received all its permits and
construction is expected to begin in July. The Topaz and Desert
Sunlight plants are expected to receive their permits next
The company expects the projects to create a combined 1,400
jobs in California during peak construction.
Declining solar power subsidies in key European markets
have trimmed demand there, leading to a glut of supply that has
pushed solar panel prices down more than 10 percent this year,
pressuring solar companies' share prices.
Short sellers piled into First Solar stock in recent weeks,
betting it would sink, and represented more than 39 percent of
the company's free float shares. That helped pressure the stock
down more than 35 percent from a February high of $175.
First Solar shares were up 7 percent to $138.43 in midday
trading on the Nasdaq.
(Reporting by Matt Daily in New York and Tom Doggett in
Washington; Editing by Lisa Von Ahn, Dave Zimmerman and John