In the last three years, solar module prices have fallen 75%. Though this does mean they’re more affordable, it’s also hurt the companies that manufacture them.
It’s taken away some government incentives, too. For example, last September Silicon Valley startup SolarCity and Bank of America (NYSE: BAC) were to receive a $344 million loan guarantee for their project. That loan fell through just after the announcement came.
But unlike some other companies that lost their loan guarantees, SolarCity saw it as a mere bump in the road. Its SolarStrong project was still going to happen.
At its conception, SolarStrong was a plan to install 371 megawatts of solar panels on the rooftops of 160,000 units of military housing.
The project had to be scaled down after losing the loan guarantee, but SolarCity still insisted on making a splash.
Now aiming for 120,000 units, SolarStrong is the nation’s largest rooftop solar project.
It’s been aided by a 30% government tax credit, which will be valid through 2016. And Bank of America was able to work out a financing program to make the project feasible, also contributing around $350 million in loans.
U.S. Bancorp (NYSE: USB) is also investing in the project, contributing to the estimated total cost of $1 billion.
SolarCity plans to create plenty of job opportunities with this extensive project, taking pride in their initiative to hire veterans. The company currently employs 75 veterans.
And as the project moves forward, SolarCity has announced a round of installations set to take place.
In this phase, 18,000 panels will be installed on top of 850 military homes at the Los Angeles Air Force Base in California, the Peterson Air Force Base in Colorado Springs, and the Schriever Air Force Base, also in Colorado Springs.
The yearly production of 6.4 million kilowatt hours per year should provide 30% to 60% of the electricity needs in the communities.
The residences at all three bases are managed by Lend Lease, a property development company involved in the Military Housing Privatization Initiative (MHPI) through the Department of Defense.
Simon Muir, Vice President and Director of Solar Services at Lend Lease, told MarketWatch:
“We are committed to finding ways to meet the energy challenges of our lifetime and helping the Defense Department, currently the largest energy consumer in the United States, meet its goal of having 25 percent of its overall energy consumption derived from clean, renewable sources by 2025. This is another big step toward that direction.”
SolarCity’s motivation to complete this project despite losing loan guarantees could set a standard for other U.S. solar companies.
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Despite the strain felt in the industry—even by well-established companies like First Solar (NASDAQ: FSLR)—as a result of falling panel prices, this startup is writing its own success story.
SolarCity recently filed for IPO, though any details have yet to be released.
Since it’s still such a small company, it was able to file under the Jumpstart Our Business Startups (JOBS) Act, where it is able to keep all information completely confidential until up to three weeks before its release. In fact, the public does not even have to be aware that the company filed at all.
But SolarCity has leaked that much. When the company will go public remains to be seen.
That’s all for now,
Brianna
