BLYTHE (CBS) — For the second time in as many years, a California solar energy firm has gone bust on a federal loan.

Oakland-based Solar Trust of America filed for Chapter 11 bankruptcy after the firm failed to meet a deadline for a $2.1 billion U.S. Department of Energy loan on April 1.

Solar Trust broke ground in December on what was initially billed as the world’s largest solar power plant near the town of Blythe about 50 miles east of Joshua Tree National Park.

The firm listed assets of $10 million and liabilities of upwards of $50 million in the U.S. Bankruptcy Court filing in Delaware.

City Manager David Lane told the KNX Business Hour there had been rumors of bankruptcy swirling for some time.

“I believe Solar Millennium is the parent company, and they had the first problem back in December,” said Lane. “In the interim they tried to sell the project back to another company called solarhybrid, and that didn’t pan out.”

While Solar Trust was ultimately forced to file for bankruptcy, the filing is not considered a default after the firm lost federal guarantees for the loan when the project was delayed last summer.

But default or not, Lane expected Solar Trust’s bankruptcy will have an economic impact on Blythe.

“The biggest loss to us immediately will be the loss of sales tax and hotel/motel bed tax, because since we’re the only city for 100 miles around, we figured anybody working on the site is going to be spending their money here in Blythe,” he said.

Lane estimated a “rolling figure” of “thousands of four-to-five-year jobs” will be lost in the wake of the bankruptcy filing, but he said he expects at least one of some 40 companies to step in and build the 1,000-megawatt solar farms.

“We think the big fish are eventually going to eat the smaller fish and when it’s all said and done, there’s going to be 7, 8, a dozen companies that will build these plants between here and Coachella Valley,” said Lane.

The filing comes amid the ongoing controversy surrounding Solyndra, a solar firm that received a $535 million federal loan and from the Obama administration before declaring bankruptcy last year.

Comments (10)
  1. Mex says:

    Didn’t John & ken warn us about this solar energy scam? Yes they did. This was just another scam by California. few people were handed the money from the federal government and they stole most of it.

    1. Cheese Wonton says:

      Advances in technology made Solar Millenium’s technology less cost effective than what the competition is offering. Solar Millenium is a German firm with projects all over the world that are now in limbo. This is not confined to the US. Advances in PV cell technology has made some of these big, utility scale projects much less profitable than they were when they were designed, and investors all over the world are abandoning SM’s tech for less costly means. It’s not some grand plot, it’s just how the market works.

  2. El JoeBoy Del Cuchillo says:

    I can’t think of a more-deserving town for this to happen. They expected an economic transfusion from the solar project but got coal instead. While this town is in desperate need of help, and it sure looks like it, I will say with native authority that it deserves all it got. I was born in this God-forsaken pit, lived (?) there for 15 years, couldn’t wait to leave. In my opinion, You got what you deserve… I was assaulted by school staff in Jr. High, falsely imprisoned by city police when I was a child of 10 of 11, they assaulted a cousin in jail and took him home after they could NOT stop the bleeding and my 17 yr old uncle was aledgedly murdered by_ ? _ in that hell hole. May God have mercy on you ’cause I can’t.

  3. Ralph says:

    I worked at the genisis solar farm last Jan thru March of 11, and this town couldn’t care less about the workers or the money that us workers were spending by both staying and eating in this RAT hole. We had a total of almost 40-50 people doing the access road to the site, and alot if not most of the people we had contact with couldn’t care less because alot of the people thought we were taking THEIR jobs, and even a few threatened us – two of my workers got jumped just going to the Taco Bell for dinner. I only hope that they close down the othe solar farm and let this town die a long and slow death, its aready on its way as it is. My wife and I have renamed it BLIGHT. Good luck you sorry people