Col. Belote and Vander Leest walk through array of solar photovoltaic panels at Nellis Air Force Base in Las Vegas
Col. Dave Belote (L), commander of Nellis Air Force Base, and Eric Vander Leest, a photovoltaic system technician for SunPower Corp., walk through an array of solar photovoltaic panels at the base in Las Vegas, Nevada in this picture taken August 1, 2008. The 15 megawatt plant, consisting of 70,000 panels on 140 acres, provides 30 percent of the base's electricity needs. The U.S. military has a history of fostering change, from racial integration to the development of the Internet. Now, Pentagon officials say their green energy efforts will help America fight global warming. Picture taken August 1. Reuters

Solar panel installer SolarCity said on Friday it was the second company in as many days that will not get finalization of U.S. government loan aid by a September 30 deadline.

The Department of Energy informed SolarCity of its inability to close the loan 48 hours ago, blaming increased paperwork resulting from a Congressional investigation into the DOE's $535 million loan guarantee awarded to bankrupt solar company Solyndra, SolarCity said in a letter to the Republican lawmakers heading the probe.

The DOE loan guarantee program -- under fire for missing signs that its first recipient of loan aid, Solyndra, was bleeding money before it went bankrupt -- has nearly $9 billion in loans still to finalize.

SolarCity's $275 million loan guarantee was intended to fund a plan, called SolarStrong, to install up to 160,000 rooftop solar systems on military family homes. The conditional loan guarantee was offered on September 2, SolarCity said.

Unfortunately, Project SolarStrong, together with the thousands of job years it would create and the benefits it would bring to our country's military communities, is at risk of becoming an unintended casualty of the controversy over Solyndra, SolarCity CEO Lyndon Rive said in the letter.

Rive later said in an interview that SolarCity can furnish the documents to the department in weeks, and that the government loan aid could still be approved at a later date.

But he said the DOE's move could forced the company to look to private financing for the project.

USRG Renewable Finance was the lead lender on the SolarStrong project and Bank of America Merrill Lynch had intended to provide debt financing and advisory services.

GROSS MISMANAGEMENT?

A Republican spokesman for the House Committee on Energy and Commerce -- which is investigating the circumstances around Solyndra's guarantee -- accused the DOE of mismanagement and questioned the agency's assertion that the probe had raised documentation requirements and held up loan applications such as SolarCity's.

It is sad and irresponsible for DOE to attempt to shift blame for the agency's own gross mismanagement of the 1705 loan guarantee program, Sean Bonyun, a Republican spokesman for the committee, said in a statement. The Solyndra investigation is not causing DOE's failures, but rather DOE's failures have caused the Solyndra investigation.

Just a day earlier, industry stalwart First Solar Inc said it would not meet the DOE deadline for a loan guarantee that would have funded a huge solar power plant in California. The project had received conditional approval for $1.9 billion in loan aid in June.

Officials for both Sempra Energy and SunPower Corp said they are continuing to work toward closing their DOE loan guarantees for solar power plants.

A spokeswoman for solar thermal start-up SolarReserve would not comment on the status of the company's conditional loan guarantee offer.

Several renewable energy companies that are not invested in solar power got good news from the DOE on Friday.

POET, the world's largest ethanol producer, said on Friday the DOE finalized $105 million in loan aid for a cellulosic ethanol plant to be built in Iowa.

It also finalized a partial guarantee for up to $350 million in aid for three geothermal power facilities sponsored by Ormat Nevada Inc.

In addition, DOE finalized a partial guarantee for nearly $170 million for Granite Reliable Power, LLC. The aid will support the building of a 99 megawatt wind power project in New Hampshire, that will consist of 33 turbines built by Danish company Vestas.

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