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US government OKs long-delayed, $1 billion First Solar plant in California

Highlights

450-MW photovoltaic project could start operation in 2022

Developers cite high cost of public land rents

New York — The U.S. government has approved First Solar Inc.'s proposed $1 billion Desert Quartzite Solar Project on roughly 3,000 acres of public land in eastern Riverside County, California. The project has been under development since 2007.

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The envisioned 450-MW, thin-film photovoltaic project could start operation in 2022, the US Department of the Interior's Bureau of Land Management said in a January 15 news release. However, First Solar still lacks a contract for the output of the massive facility, according to S&P Global Market Intelligence data.

First Solar did not immediately respond to a request for details January 16 about the project's intended customer. While the facility would interconnect with Southern California Edison Co.'s electric system, local government-run community choice aggregators are the most active buyers of renewable energy in California.

The project marks the second $1 billion solar project the federal government has advanced in recent weeks, following a favorable environmental review for the Gemini Solar + Battery Storage Project in Nevada in late December 2019. The actions are part of what the BLM has described as an "all of the above" strategy for energy development on public lands.

HIGH COST OF PUBLIC LANDS

Despite the approvals, developers of solar projects on federal land face considerable obstacles, including additional costs that make projects less competitive than their counterparts on private land, a First Solar official told U.S. senators in 2019 testimony.

The BLM charges rents "that vastly exceed fair market value" and capacity fees "that unnecessarily increase the cost of land and are not found in private land contracts," Laura Abram, First Solar's director of project execution and public affairs, said in testimony March 7, 2019, before the U.S. Senate Committee on Energy and Natural Resources.

"This has made development on public land uncompetitive with private land," Abram said.

Desert Quartzite, for instance, will provide about $2.7 million in annual rent and fees to the U.S. Treasury, according to the BLM, equal to $81 million over 30 years. That is about three times more expensive than a 30-year lease on private land in California, according to Abram.

"Many developers are now avoiding development on public lands because of these challenges," Abram added.