Exelon Says $1.36 Billion Solar Deal With First Solar Hits Trouble

SAN FRANCISCO -(Dow Jones)- Exelon Corp. (EXC) said Friday that a $1.36 billion solar-power plant deal with First Solar Inc. (FSLR) has hit a delay, stemming from problems with the project’s federal loan guarantee and a construction permit that the company said it hopes to resolve later this month.

In September, Exelon agreed to buy a 230-megawatt solar farm near Los Angeles from First Solar for up to $1.36 billion. The deal was contingent on a $646 million loan guarantee that the U.S. Department of Energy issued that month for a loan from the Federal Financing Bank to back construction of the project.

Now, however, the loan and the deal have been delayed by an issue with a construction permit that First Solar obtained from Los Angeles County.

The loan guarantee snag comes at a difficult time for First Solar and its rivals in the global solar-power market as they struggle to remain profitable amid falling prices, …in the document, First Solar said that if the department doesn’t approve an initial loan payment by Feb. 24 or a at a later date to be determined, the company would have to buy back the project from Exelon for $75 million, the amount Exelon has paid the solar company so far.

Spokesmen at First Solar and the Energy Department declined to comment.

Exelon said it still plans to invest up to $713 million in equity in the project and that the acquisition supports the company’s “commitment to clean energy.”