San Diego cancels projects for troubled solar firm

San Diego's high-profile push into solar power is facing a setback as city officials have canceled five projects by contractor SunEdison.

More projects could be terminated under the 2015 agreement as soon as next month.

"SunEdison has failed to meet schedule and contract deadlines stated in the contract," says a July 6 letter from the city's Environmental Services Department to the solar provider.

The San Diego Union-Tribune learned of the terminations through a request under the California Public Records Act.

A spokesman issued a statement saying the city's solar initiative is moving forward and any other projects SunEdison fails to complete under the agreement will be rolled into a second round of solicitations expected to be advertised later this year.

The company, which filed for bankruptcy in April, did not respond to questions about the city's terminations or say whether it would complete other projects specified in the San Diego contract.

Spokesman John Lamontagne told the U-T in April that SunEdison had "every intention of meeting the commitments we made with the city of San Diego."

SunEdison signed a deal late last year that called for the company to build 25 solar projects on publicly owned property across San Diego, then sell the electricity to the city over 20 years.

The city has 40 other sites identified for a second phase of solar installations.

When Mayor Kevin Faulconer announced the SunEdison deal in October, he predicted the 25 projects alone would cut the city's energy bill by 45 percent and save taxpayers $22 million through the next two decades.

"This is about using our infrastructure to its fullest potential and using public resources to save taxpayer money," he said in a news release.

The panels were supposed to be installed at no cost to San Diego at libraries, recreation centers, police and fire stations and other city properties.

The plan was expected to generate 6 megawatts of electricity per year, generally enough power to serve 3,000 homes. The output would triple the amount of solar power now generated on city facilities.

After SunEdison filed for bankruptcy protection, company executives said they secured $300 million in new capital that would enable them to meet their agreements with San Diego and other customers.

By early June, however, SunEdison was asking San Diego officials for more time.

"For a variety of reasons, including those outside SunEdison's control, the installation schedules outlined in the (contract) are no longer feasible," the company told the city in a June 16 letter.

SunEdison wanted to push deadlines back to Dec. 31 and February 2017 in exchange for a slight discount in the cost of power.

The city's July 6 reply not only refused the request and terminated the initial projects, it indicated the company was scrambling to pay for the installations.

"In fact, at the June 7, 2016 meeting/conference call, SunEdison acknowledged it was still in the process of obtaining equity investment from third parties required to move the projects ahead," the city letter said.

SunEdison has had trouble delivering on contracts with other governmental agencies. It also has seen several top executives depart as its reorganization unfolds.