Google-Owned Solar Company Requests $540 Million Bailout To Help Pay $1.6 Billion Loan

A renewable energy company touted publicly by President Barack Obama which lists Google as an investor is requesting a $539 million federal grant to help pay off part of a $1.6 billion federal loan it received to build a solar plant in the Mojave desert.

The Ivanpah Solar Electric Generating System, which is owned by Google, NRG Energy and BrightSource Energy, uses nearly 175,000 mirrors, called heliostats, and sprawls 3,500 acres in California.

“It’s going to put about 1,000 people to work building a state-of-the-art facility. And when it’s complete, it will turn sunlight into the energy that will power up to 140,000 homes,” Obama said of Ivanpah in a weekly address in Oct. 2010, touting a new clean-energy investment initiative he said would stimulate the economy.

But since going operational in February, Ivanpah has failed to meet its own expectations, generating only 254,000 megawatt-hours of power, about one-fourth of what it predicted, Fox News reported this weekend.

NRG Energy said fewer sunny days than predicted are responsible for the deficit.

To help keep the project afloat, NRG Energy, which holds the largest stake in Ivanpah, has applied for federal grants through the Treasury Department.

The bailout was initially reported in September by The Wall Street Journal.

The $1.6 billion federal loan came through the Department of Energy’s 1705 loan guarantee program and helped finance the plant’s construction, which began in 2010. Tech giant Google also invested $168 million in the project.

The 1705 program is the same one that funded Solyndra, the California solar company that went bankrupt in 2011 after receiving $536 million in federal loan guarantees.

Two weeks after Ivanpah became operational, on Feb. 25, NRG Energy applied for, and received, an extension from the Department of Energy to pay off the $132 million owed on the first installment of its massive loan. The company must now pay that amount by Feb. 27, 2015, the Journal reported.

A $159 million loan payment due on June 27 was extended until Dec. 27.

When the Journal reported those extensions in September, a third loan installment of $117 million due on Oct. 27 remained on schedule. But according to NRG’s most recent quarterly filing with the Securities and Exchange Commission, the repayment date for that loan has been extended to Apr. 27, 2015.

To help pay off these installments, NRG applied for a $539 million grant through the Treasury Department’s 1603 program, which, according to Treasury’s website, provides awards that are “equivalent to 30% of the project’s total eligible cost basis in most cases.”

Rather than put the grant to use to develop the plant, NRG Energy plans to use those proceeds to pay off loans it owes the Department of Energy.

“Solar Partners I, Solar Partners II, and Solar Partners VIII submitted applications to the U.S. Department of Treasury for cash grants; any proceeds received will be utilized to repay the borrowings,” reads NRG Energy’s SEC filing for the quarter ended Sept. 30.

The Ivanpah project is one of many that have come under scrutiny following the Solyndra debacle, which the White House pushed despite concerns over the project’s risk.