On April 2, 2012, Oakland, CA-based Solar Trust of America, LLC filed for Chapter 11 protection in a US Bankruptcy Court in Delaware (Case No. 12-11136). The company's Chief Operating Officer, Edward Kleinschmidt, stated that the company had missed two quarterly rent payments to the Bureau of Land Management, and was unable to make further payments that were coming due.
Solar Trust owns the development rights for the Blythe Solar Power Project as well as three other projects under development in the Southeastern California desert. The company listed assets of up to $10 million and debts of up to $100 million.
By far the largest enterprise, the Blythe Solar Project is a 7000-acre site dedicated to producing nearly 1000 megawatts of electric power, enough to supply about 300,000 homes, utilizing Concentrated Solar Power technology. CSP concentrates the sun's radiation into troughs of parabolic mirrors that superheat fluid-filled tubes resting at the center of the troughs. The tubing conveys the heat to a boiler, which in turn runs a turbine, producing electricity. The power produced was to go through a 230 kW transmission line to the Devers-Palo Verde #2 500 kV line on the Colorado River.
Initiated with great fanfare on June 17, 2011, at a ceremony attended by Interior Secretary Ken Salazar and California Governor Jerry Brown, the project was to have created 1000 construction jobs, 3000 supply-chain jobs and 220 permanent jobs. Solar Trust also received a conditional commitment for a $2.1 billion loan guarantee from the US Department of Energy (DOE), one of the largest ever granted.
The project had been inconvenienced initially by lawsuits brought by environmentalists and Native American communities, and its German parent, Solar Millennium, LLC was required to provide funding for more than 8000 acres of habitat for the desert tortoise, and other species endangered by the presence of the project.
In August, 2011, Solar Trust abruptly changed its rollout plans from CSP to photovoltaic (PV) production, reacting to plunging PV panel prices. During this strategic shift, the company lost its access to the massive DOE loan guarantee.
In December, 2011, Germany's Solar Millennium, a 70% stakeholder in Solar Trust, sought court protection. Solar Millennium attempted to sell its stake in Solar Trust to solarhybrid AG [sic]; however, that company went belly up as well. Millennium and solarhybrid both fell victim to subsidy cuts and equipment oversupply in the German market.
Ferrostaal AG owns the other 30% of Solar Trust, but has not made any financial contributions in the past two years.
Florida-based NextEra Energy Resources, LLC stepped up to provide financing and has expressed an interest in becoming an initial bidder for Solar Trust's assets, which include essential permits and a connection agreement with Southern California Edison's power grid. SCE has committed to $200 million in network upgrades. The Blythe project must come up with $27 million to support this connection agreement, and COO Kleinschmidt intimated that lenders, including NextEra, are poised to put up the money for those payments. According to Kleinschmidt, losing the connection agreement with SCE would render the entire project valueless.
Both federal and state energy goals were invested in the Blythe Solar Project. It would have impacted the Obama Administration's goal to have 80% of US energy production from renewable sources by 2035. It would have had even greater impact on California's mandated goal to have 33% of its energy production from renewables by 2020. Being the only city within 100 miles of the project, Blythe, CA, would have benefited by the influx of jobs.
There has been some misinformation posted on several blogs making comparisons between Solar Trust and Solyndra. Unlike Solyndra, a solar panel company that declared bankruptcy in 2011 owing $528 million to the US government, Solar Trust never finalized its federal loan guarantee. Solar Trust was actually paying rent to the federal government's Bureau of Land Management before its Chapter 11 filing.
Solar Trust of America, tragically, ran a gamut replete with a turn in the renewable energy market in Germany, lawsuits, and change of strategy that cost the company its government funding. The project still has the potential of bettering local economies and providing a source of cheap, clean energy. Hopefully, the entrepreneurial spirit has not left the California desert and someone will step up to continue the project in the near future.