The San Jose voted unanimously to move forward with the deal with San Mateo-based SolarCity and the details of that deal will be worked out within the next several months. This project does not hinge on a government-backed loan, but other SolarCity projects do.
San Jose's budget woes will likely have an impact on its ambitious partnership with SolarCity. The hope was to put solar panels on as many as 28 government buildings that would save an estimated $140,000 in energy costs the first year and $5.7 million over 20 years.
However, city budget cuts could force the closure of libraries and community centers slated to get solar panels, and if they aren't open, that changes the whole energy savings formula.
"We really want to move forward on those that breakeven or save money today. We don't want to take money away from the general fund that could be used to restore services," said Kerrie Romanow, the environmental services acting director.
SolarCity says it is ready to install panels and provide financing on whatever ultimately makes sense for San Jose. The leading solar installer is disappointed the U.S. Department of Energy may not come through with a promised $275 million loan guarantee for another project. That project, SolarStong, is intended to put $160,000 solar systems on the homes of military families.
"Without the loan guarantee, there would be certain states that we couldn't deploy solar in. It would some states where there's been very little solar investment to date, so it would be disappointing, but we still plan to move forward with the project," said SolarCity spokesperson Jonathan Bass.
San Jose Mayor Chuck Reed however is concerned the fallout from Solyndra's bankruptcy and failed $500 million federal loan will hurt the industry and the city.
"We're looking at $500 million of loan guarantees and another $1 billion of private sector investments around these San Jose companies and I'd really like to see that money coming into our community, but I'm very concerned DOE won't be able to process it," said Reed.
City leaders accepted an award on Tuesday from Siemen's for implementing its green vision and focus on sustainability. SolarCity says a pullback on loan guarantees will slow the progress of solar in the U.S., but it will not stop it.
"We've raised over $1.4 billion in project financing from Google, Morgan Stanley, U.S. Bank, and Citygroup. So demand has never been higher, growth has never been higher, we've hired over 500 people in the last 12 months," said Bass.
The SolarStrong project is one of nine loans worth of about $7 billion being reviewed by the Department of Energy. A DOE spokesperson told ABC7 that the questions surrounding Solyndra are not impacting the loan application process right now, that they are all being scrutinized for legal, technical, and financial reasons.