It’s been a busy few months for financial regulators and law enforcement, particularly in industries saturated with spectacular and spurious claims.
No industry is more spurious than taxpayer-subsidized “green energy.”
In August, Tesla co-founder Elon Musk incurred the wrath of the Securities and Exchange Commission when he implied that a deal was secured for Tesla to go private (in reality, any deal “was uncertain and subject to multiple contingencies”).
Now that the SEC turmoil has come to an end, the FBI is examining whether the company misled investors about production targets for the all-electric Model 3 sedan.
Tesla produced just 2,700 Model 3s in 2017, a far cry from the 5,000 to 20,000 Model 3s per month promised to investors.
This is only the tip of the iceberg. “Renewable” companies seem to disproportionately fall afoul of the law time and time again.
Restrictions against fraudulent claims made to shareholders and consumers are central to a free and unfettered marketplace. It should go without saying that without protections against fraud, our economy would crumble.
But equally important, if not more so, is the integrity of claims made to the government to receive taxpayer money.
Companies who fraudulently represent themselves to achieve taxpayer subsidies are, quite literally, stealing from all Americans.
It seems that, from 2009-2013, that’s exactly what (now Tesla-owned) company Solar City evidently did.
As a part of Obama’s so-called “stimulus” package, SolarCity filed 29,000 claims on projects worth nearly $2 billion.
But regulators determined shortly thereafter that the company systematically overcharged the federal government on project costs, and after a years-long court battle, SolarCity finally agreed in 2017 to settle claims for $29.5 million.
Nor is SolarCity the only other leading renewable company to come under scrutiny by regulators.
Earlier this year, New Mexico Attorney General Hector Balderas lodged a 17-count civil complaint against Vivint Solar, a leading solar provider with the largest solar securitization to date.
Hundreds of New Mexican households now have clouded titles, with gargantuan cost increases in energy production not discussed by sales agents.
After households were locked into 20-year contracts by unscrupulous Vivint Solar agents, their costs skyrocketed by more than 70 percent, a huge blow to the unsuspecting consumers.
In California, the Campaign for Accountability found a similar track record of negligence, in which companies such as Vivint Solar and SolarCity allegedly damaged roofs and tricked consumers into long costly leases.
This kind of misbehavior, which seems to dog virtually all leading “renewable” companies, has far larger consequences than other corporate misdeeds due to the sheer amount of taxpayer resources flowing to green businesses.
California, the epicenter of Vivint Solar, SolarCity, and Tesla complaints, funds a generous solar rebate program, on top of an ambitious Renewable Portfolio Standard requiring that 40 percent of electricity comes from zero-carbon sources by 2045.
On the federal level, the Department of Energy’s SunShot initiative (rebranded under the Solar Energy Technologies Office) spends $270 million per year to “induce companies to lower production and installation costs associated with photovoltaic solar panel systems and reducing the price of solar power.”
A 2016 congressional investigation into the Department of Energy revealed that organizations routinely promote rooftop solar with public monies via SunShot.
The Interstate Renewable Energy Council, which received millions of dollars in taxpayer subsidies over the past nine years, advocates for onerous net-metering subsidies at the state level and provides technical assistance on panel installations.
Not all government investigations into financial misdeeds are focused and well-founded, of course.
Regulations put in place after Dodd-Frank, for instance, gave the government the impossible task of teasing out speculative proprietary trades from consumer-centric ones.
But one thing seems clear: From Tesla’s shenanigans to SolarCity’s apparent systematic overcharging of the federal government to Vivint Solar’s allegedly fraudulent claims, leading “green” companies can’t seem to conduct themselves honestly.
Given rampant fraud and corruption in the renewables sector, federal and state governments ought to reexamine their financial and regulatory support for the “green” sector.
Also, before handing out even more pork for “renewable projects,” governments need to make sure taxpayers are kept safe from unscrupulous companies.
While ending subsidies to these boondoggles would be best for taxpayers, insisting on more frequent audits and greater transparency would be a welcome first step for financial regulators looking to restore order to the market.
Read more at The Federalist
