Solar Energy Companies Cash in on Tax Credits
The Department Energy’s (DOE) Inspector General (IG) revealed last week that the legendary solar-panel manufacturer Solyndra-a poster baby of the Obama stimulus-lied to the feds to get a $535 million loan guarantee before going bust in 2011. The IG noted that DOE loan officers felt “tremendous pressure” from the White House and Congress to rush through loan-guarantee applications in 2009. The White House is more concerned with boosting the politically favored solar industry than protecting taxpayers dollars.
Large companies that support solar sales and installations, receive a 30% tax credit on their investment. The large solar leasing businesses that benefit most include Wal-Mart and Google. SolarCity, a company that installs and leases rooftop panels, is being financed by Goldman Sachs, Citigroup and J.P. Morgan. Solar leases are a high yield political investment.
Here is how it works. Solar leasing companies install rooftop systems at no upfront cost to the consumer. Rooftop Systems typically cost tens of thousands of dollars. Homeowners rent the system for 20 years. The initial electric rate paid by the homeowner is less than the local electric rate, and the rate escalates over 20 years. The investor companies collect the myriad of state and federal subsidies. Homeowner are promised hundreds of dollars in annual savings on their electric bills.
Here’s the catch. If the government subsidies are scaled back, the homeowner’s electric rates could shoot up. Several members of Congress have voiced concern to the Federal Trade Commission that solar leasing companies were using “deceptive marketing strategies that overstate the savings” and “understating the risk.” It appears that the President is using his bully pulpit to abet an industry that is essentially fleecing the American public.
1. Editorial, “Big Solar’s Subsidy Bubble” Wall Street Journal, Aug.30, 2015