By Matt Jarzemsky Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- First Solar Inc.'s (FLSR) shares fell as much as 10.6% Friday after the company warned a delay in government funding may stymie its sale of a California solar farm. The Tempe, Ariz.-based solar panel maker said late Thursday that it might have to buy back a facility it sold to Exelon Corp. (EXC) if the U.S. Department of Energy doesn't begin funding a loan made to finance the deal by later this month. Exelon's purchase of the 230-megawatt Los Angeles County project, called Antelope Valley Solar Ranch One, was contingent on the financing. Initial funding of the agency's loan has not yet occurred because a "construction permit issue" hasn't been resolved, First Solar said in a regulatory filing. A spokesman didn't immediately respond to a request for further comment. If the funding doesn't start by Feb. 24, which is an extension of the original timeframe, First Solar said it would pay Exelon at least $75 million for the project. First Solar would then be able to try to sell the facility to another party. Spokesmen for Exelon and the Department of Energy couldn't immediately be reached for comment. First Solar shares recently fell 9.9% to $44.15. Before Friday, First Solar shares had gained 35% since its low on Jan. 24. The companies agreed to the $1.36 billion deal in September. First Solar planned to build, operate and maintain the 230-megawatt project. Exelon expected to invest up to $713 million in equity, while the Department of Energy guaranteed up to $646 million in loans. The pact came on the cusp of a federal deadline for securing pending Department of Energy loan guarantees. Such funding attracted controversy after a deal valued at more than $500 million with solar-panel maker Solyndra LLC went sour. The Exelon deal snag comes at a tough time for First Solar and its industry. Panel prices have plunged on weak demand and an oversupply of product from China. In December, First Solar gave a weak forecast for its 2012 financial results and disclosed a reorganization of some of its operations. It's planning to idle half of its German factory for six months, according to reports on Thursday. Nevertheless, First Solar and its peers saw a recent stock rally on indications of rising solar panel demand, particularly in China, and price stabilization. Investors also are speculating meetings next week between U.S. and Chinese officials could lead to favorable trade concessions. -By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; matthew.jarzemsky@dowjones.com
