Loan Guarantee of $1.85 Billion to Abengoa and Abound Solar seems to be a Misuse of US Taxpayer Money

President Obama declared $1.85 Billion in Combined Loan Guarantees to Concentrated Solar Power Giant Abengoa and Cadmium Tellurium startup Abound Solar.These huge guarantees is nothing new as other solar startups like Solyndra and Brightsource Energy have also  received hundreds of million dollars in Loan Guarantees from Department of Energy(DOE).I had written earlier about how US Solar Energy policies seem misguided as Obama visits Solyndra which looks to be Billion Dollar Failure.Though the ultimate success or failure of Solyndra has yet to be decided,its failure to conclude an IPO does reflect tough times for this overhyped startup.

Spanish Leader Abengoa gets a Billion Dollar Loan Guarantee in Gift from DOE

Abengoa which is building Solar Thermal plants around the globe is going to receive a whopping $1.45 Billion in Loan Guarantee from DOE for building a CSP plant in Arizona.Note the number of permanent jobs that will be created will be just 85 which means more than $15 million of stimulus to create 1 job.Abengoa is a Spanish conglomerate which recently announced a JV with Masdar in building a Solar Thermal plant in UAE.Why it needs such a massive loan in building a 280 MW plant in Arizona seems a bit incomprehensible unless they decide to increase the size.Also note that the stimulus spending will help in creating a power plant made by a Spanish Company.It will lead to no new technology or manufacturing capability.

Spain’s Abengoa to Build 280-MW Solar-Thermal Plant in Arizona – Sustainable Business

Abengoa Solar, a subsidiary of Spanish technology company Abengoa, S.A. (ABG.MC), said it has signed a contract with a U.S. utility to build a 280-megawatt (MW) solar-thermal plant (CSP) near Phoenix Arizona.The plant is scheduled to go into operation by 2011 and will be located 70 miles southwest of Phoenix, near Gila Bend, Arizona. It will sell the electricity produced to Arizona Public Service Co. (APS) over the next 30 years for a total revenue of around $4 billion, according to a release.The plant, named the Solana Generating Station, will employ a proprietary concentrating solar power (CSP) trough technology developed by Abengoa Solar, and will cover a surface of around 1,900 acres.

Thin Film Startup Abound Solar gets a Huge $400 million Loan Guarantee

Abound Solar which is a CdTe startup has also received a massive loan guarantee like Solyndra earlier.This money is going to be used to set up manufacturing facilities in Indiana and Colorado.Abound Solar has been heavily supported the the US government’s National Renewable Energy Laboratory (NREL) and is in the process of starting a 200 MW plant in Colorado.While this subsidy seems to make more sense than the  Abengoa power plant,one needs to question whether Abound is capable of surviving the tough times Thin Film Technology is going through.When established companies like Applied Materials are being forced to abandon their Thin Film plans,it is highly uncertain whether a startup will survive.$400 million seems a massively risky bet unless it has got some secret sauce capable of beating stalwarts like First Solar at their own game.One needs to question why these startups and power plants are receiving huge sums of money when established US solar companies with great technology like Evergreen Solar and Energy Conversion Devices (ENER) are struggling to survive

Obama Announces Loan Guarantees for Solar Firms Abengoa, Abound – Bloomberg

The loan guarantees will come from money in the $862 billion economic stimulus program enacted early last year. “The recession from which we’re emerging has left us in a hole that’s about 8 million jobs deep,” Obama said. “And as I’ve said from the day I took office, it’s going to take months, even years, to dig our way out.”Abengoa Solar, a unit of the Seville, Spain-based engineering company, will receive a $1.45 billion loan guarantee to build a solar-power plant in Arizona that will create 1,600 construction jobs and 85 permanent jobs, according to White House documents released in conjunction with Obama’s address.

Abound Solar, a closely held company based in Loveland, Colorado, will receive a $400 million loan guarantee to expand a solar-panel manufacturing plant in Longmont, Colorado, and to open a new plant in Tipton, Indiana. The two plants will employ about 1,500 people, according to the White House documents.

“When fully operational, these plants will produce millions of state-of-the-art solar panels each year,” Obama said.