First Solar, Inc. (FSLR) announced completion of the sale of one of the world's largest photovoltaic (PV) solar power projects — the 550-megawatt (AC) Desert Sunlight Solar Farm near Desert Center, Calif. First Solar — which will continue to build and subsequently operate and maintain the project under separate agreements — has sold the project to affiliates of NextEra Energy Resources, LLC, the competitive energy subsidiary of NextEra Energy, Inc. (NEE), and GE Energy Financial Services. First Solar estimates that Desert Sunlight will employ up to 630 people for construction, which has begun. Converting sunlight into electricity, the solar power project will provide enough clean, affordable energy to power approximately 160,000 California homes and displace 300,000 metric tons of greenhouse gas emissions per year — equivalent to taking 60,000 cars off the road. Total indirect local economic benefits to Riverside County, where the solar project is located, are estimated at $336 million, the majority of which will be generated during construction with the remainder over the minimum 25-year operating period (according to an economic benefits study by Coachella Valley Economic Partnership and The Brattle Group), including nearly $200 million in wages. Indirect benefits result from local business-to-business transactions, for example local purchase of building materials. The project is expected to contribute approximately $27 million in sales and property tax revenue to the county. Desert Sunlight will also help California meet its target of generating 33 percent of its power from renewable sources by 2020.
Tapping the Desert's Sun
The project is located 35 miles west of Blythe and six miles north of Desert Center in the Chuckwalla Valley on approximately 3,800 acres — with 200 more acres for related infrastructure — of largely vacant land managed by the Bureau of Land Management. First Solar will install its advanced thin-film PV modules, which convert sunlight into electricity without producing emissions or waste or using water. First Solar will supply some modules from a new $300 million factory it is building in Mesa, Ariz., that will employ 600 people to support Desert Sunlight and other U.S. PV projects. Project construction began this month, with full commercial operation expected by the first quarter of 2015.
Funding from Equity and Debt
Affiliates of NextEra Energy Resources and GE Energy Financial Services have each acquired 50 percent of the Desert Sunlight project. Financial details of the transaction were not disclosed. A NextEra Energy Resources affiliate will manage the project. The Desert Sunlight project's power will be sold under two long-term power purchase agreements: a 250-megawatt agreement with Southern California Edison and a 300-megawatt agreement with Pacific Gas and Electric Company. The U.S. Department of Energy Loan Program Office on September 29 approved a loan guarantee for the project. The project will not receive any cash from the government through the loan guarantee; rather the DOE is partially guaranteeing $1.46 billion in loans provided by a syndicate of private institutional investors and commercial banks headed by lead lenders Goldman Sachs Lending Partners LLC and Citigroup. The loan guarantee expanded the pool of potential lenders to the project, encouraging development and deployment of clean energy, jobs and reduction of the country's reliance on fossil fuels.
"We are pleased to be able to expand our position as North America's leading generator of solar power," said NextEra Energy Resources President and CEO Mitch Davidson. "Acquiring a 50 percent interest in the Desert Sunlight project is consistent with our strategy to add fully contracted clean energy to our portfolio."
"First Solar is excited about the sale of such a groundbreaking PV solar project, which will have profound environmental and economic benefits," said Frank De Rosa, First Solar Senior Vice President of Business Development—Americas. "We look forward to working closely with the new owners as we build and operate the facility, bringing jobs, renewable power and energy security to California and the United States."