The Obama administration is providing a loan guarantee for a massive solar energy project that could double the number of glimmering solar panels on residential rooftops in the U.S.

The Energy Department said Wednesday it provided a partial guarantee for a $344 million loan to San Mateo, Calif.-based SolarCity for the SolarStrong Project, which seeks to place solar panels on 160,000 homes across 124 military bases in 33 states.

"This is the largest domestic residential rooftop solar project in history," Energy Secretary Steven Chu said in a news release. "This groundbreaking project is expected to create hundreds of jobs for Americans and provide clean, renewable power to our military families."

SolarCity CEO Lyndon Rive said the company already had started its first military base project under the program at Joint Base Pearl Harbor-Hickam in Hawaii. When fully installed, about 2,000 military homes will be powered by solar at the base.

"It is super important to get the guarantee from DOE, and because of this we can now provide clean power at a lower cost than regular power in 33 states," Rive told The Associated Press.

SolarCity will own and operate the panels and work with private companies that run the military housing to install them.

According to the Solar Energy Industries Association, 138,600 solar systems were installed on residential rooftops at the end of 2010, and they generated about 637 megawatts of power.

If the SolarStrong project is fully implemented on the military housing it is targeting, it would add 160,000 more solar-powered homes in the U.S. The Defense Department is the nation's single largest consumer of electricity.

"By tapping into our abundant domestic solar energy to power base housing, the military is showing the rest of country that homeowners throughout the U.S. can help improve our energy independence by going solar," said Rhone Resch, president of the solar industries group.

Tim Newell, the managing director of the U.S. Renewable Energy Group, the private equity firm providing the loan for the project, said the project was a low risk for the government. SolarCity is already the leading installer and operator of panels on U.S. residences.

"It's important to remember that all of the capital (including the loan) for this project is being provided by the private sector," Newell said in an email. "DOE is only providing a guarantee for a portion of the project's loan in order to reduce the financing cost and make it possible to include more states and more military bases in the project."

The loan program has come under fire in recent days, after a solar company declared bankruptcy last week despite receiving nearly $528 million in federal loans.

Solyndra LLC of Fremont, Calif., was the latest in a series of failures in the U.S. solar business, which has been beset by oversupply and competition from abroad.

The bankruptcy has provided critics with further ammunition to criticize an economic stimulus program that has provided billions of dollars in seed money for solar startups such as Solyndra. The program is set to expire at the end of the month.

SolarCity's Rive said the SolarStrong project differed from Solyndra in several ways. Solyndra was a business just getting off the ground and was using the money to build facilities. SolarCity is already an established company, and the DOE loan guarantee will not kick in until after panels have been installed at specific sites.

The House Energy and Commerce Committee has subpoenaed documents relating to the Solyndra loan from the White House Office of Management and Budget. A major investor in Solyndra, oil billionaire George Kaiser of Oklahoma, was a fundraiser for President Barack Obama's 2008 campaign.


Dearen reported from San Francisco.