The U.S. Department of Agriculture’s list of North Carolina solar power projects to be backed by federal loan guarantees ranges from easy-to-miss small rooftop panels to huge industrial solar farms visible from a distance.
A total of 22 solar projects in the state will be backed by $55.3 million in federal loan guarantees, U.S. Agriculture Secretary Tom Vilsack announced at a federally backed solar power project on a sheep farm in Bunn, about 35 miles east of Raleigh.
Vilsack later traveled to Raleigh to describe the loan guarantee program in a meeting with News & Observer editors and reporters. He said federal backing for financing solar projects will make it possible for developers here to borrow from North Carolina banks that are skittish about gambling on solar energy.
“We’re confident we’ll reduce your risk,” Vilsack said. “The risk of solar is that it’s not like a natural gas-fed facility, or a coal-powered facility, or a nuclear plant that can operate 24/7.”
The loan guarantees announced Thursday included $4.9 million for a solar project in Hertford County, $3 million in Columbus County and $2.1 million in Warren County. In all, Vilsack announced $68 million in federal loan guarantees and grants Thursday, most of them going to North Carolina projects.
North Carolina is currently ranked fourth in the nation for total solar power deployment, the result of a surge of solar development to comply with a state law requiring renewables and the plummeting global cost of photovoltaic solar panels.
Just this week Charlotte-based Duke Energy announced it will invest $500 million in eight solar farms, including the acquisition of a Duplin County project that will be the nation’s largest east of the Mississippi River.
About half the loan guarantees announced Thursday are designated for FLS Energy in Asheville, which is developing more than 40 megawatts of solar energy at numerous facilities in the state. Company officials did not return emails and phone calls Thursday.
O2 Energies, based in Cornelius, developed several of the projects with FLS, said O2 owner Joel Olsen. He said solar farms are low-risk investments because they sign long-term contracts with utilities to buy the electricity, but noted that loan guarantees reduce financing costs and help secure local financing.
“They may not have been built with North Carolina banks,” Olsen said. “These loan guarantees provided that extra measure of security for banks that have never underwritten solar projects.”
Olsen’s company developed the Progress Solar project in Bunn that Vilsack used as a backdrop for his announcement.
Progress Solar is a working sheep farm and received $3.4 million in federal loan guarantees in 2012. It has a capacity of 4.5 megawatts, enough to power about 540 homes each year, and sells electricity to Duke Energy Progress.
The Agriculture Department’s Rural Energy for American Program loan guarantees back between 60 percent and 85 percent of the loan, up to $25 million per project.
Not all solar developers are attracted to federal loan guarantees.
Chapel Hill-based Strata Solar, the developer of the Duplin County project for Duke Energy, avoids guarantees because involving a federal agency creates additional bureaucratic hurdles, said John Morrison, Strata’s senior vice president of account management.