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First Solar to Resume Building California Solar Farm

June 22, 2012, 5:20 p.m. ET
By CASSANDRA SWEET
http://online.wsj.com/article/SB10001424052702304765304577482982599654236.html?mod=WSJ_business_whatsNews

First Solar Inc. said it is calling back about 230 furloughed construction workers after the company obtained approval from Los Angeles County to continue work on a large solar farm.

The county's Department of Public Works and First Solar resolved a disagreement that began in April over the electrical certification of First Solar's thin-film solar panels. The certification allows the company to install the solar panels at the 230-megawatt AV Solar Ranch One solar-power project in the Antelope Valley northeast of Los Angeles.

The Tempe, Ariz., solar firm is building the project and supplying the solar panels, and plans to operate the plant. U.S. power giant Exelon Corp. bought the project from First Solar in a package of deals worth roughly $1.36 billion.

The companies obtained a $646 million federal loan guarantee last year to help finance the project, which they have said will generate enough electricity to serve 75,000 homes when completed next year.

First Solar said the project would be completed on time, despite the delay in obtaining approval for the panels.

The incident is the latest example of a long history of problems developers have faced in building renewable-energy facilities in California, despite state policies and incentives that call for an aggressive expansion of solar, wind and other renewable-power generation by 2020. The policies are part of the state's 2006 plan to fight climate change.

In February, after several weeks of consideration, the Los Angeles County Public Works Department approved a request by First Solar to remove more dirt at the AV Solar One site than the company originally had proposed.

The delay in obtaining that approval prevented Exelon from drawing down funds from the $646 million in federal loans. That delay, in turn, delayed completion of the companies' $1.36 billion deal, which was contingent on the federal funding.

Both First Solar and the county expressed relief Friday that they had moved past the latest regulatory hurdle.

First Solar "appreciates the collaboration and commitment" from the department in approving the panel installation, said Jim Lamon, a senior vice president at the company, in a statement.

"We're pleased to see the project back on track," said Dennis Hunter, the county's deputy director of public works, in a statement.

First Solar is now calling back construction workers hired earlier this year to install the solar panels, said Alan Bernheimer, a spokesman for the company. The company expects to eventually retain about 400 workers at the site over the course of construction, he said.

The solar firm has built more than a dozen large solar farms using its solar panels in the U.S. and Canada, and other firms have used the company's panels to complete solar projects in Europe.

—Melodie Warner contributed to this article.

Write to Cassandra Sweet at [e-mail]

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