A House Ways and Means spokesperson confirmed that the committee, in conjunction with the Senate Finance Committee, sent letters on Sept. 14 to seven solar companies requesting information about their use of funds received from the now-expired Treasury Section 1603 grant program.
The companies, which include SunEdison, Abengoa, NextEra Energy, NRG Energy, SolarCity, Sunrun and Sungevity, have until Oct. 12 to respond.
The letters, signed by Finance Committee Chairman Senator Orin Hatch (R-Utah) and House Ways and Means Committee Chairman Kevin Brady (R-Texas), ask the companies to provide information about how they determined projects’ fair-market value, whether they used independent appraisals in those determinations, their use of third-party financing, an accounting of all the Section 1603 cash grants they received and their use of tax-loss insurance.
According to documents obtained from the House Ways and Means committee by pv magazine USA, the seven companies were chosen as a representative sample of the largest residential solar companies under Treasury Inspector General (TIG) investigation.
The letters are intended to delve even more deeply into the use of Section 1603 grant program. The investigation, which started in March, focuses on whether the program “encouraged companies to sign as many leases as possible without regard to the long-term value or credit-worthiness” of the deals and potential cost-inflation to receive as much of the funds as possible for the investors. Such practices have been compared by the committee chairmen as similar to the practices that led to the mortgage-based collapse of several Wall Street firms in 2008.
Both Sen. Hatch and Rep. Brady have expressed concerns about whether the government had sufficient oversight into how the funds were used.
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The biggest part of their scam was that they booked jobs for $10/Watt, the maximum allowed under the ITC, to get the $3/Watt 1603 cash grant which pretty much paid the whole cost of the system. On top of that, they got an $8.5/Watt tax deduction PLUS the lease payments. It was a scam that should have been avoided by more careful oversight but republicans don’t believe in that.
Thanks for the comment Hal. Can you document any of these numbers?
The 2008 law gives you the $10/W max allowance and the 30% tax credit and the 85% depreciation. We will have to see what the DoJ comes up with as far as what they reported and claimed. It is all in the public records.
I look forward to documentation as to the actual cost per watt under which jobs were reported and claimed. I don’t think it is fair at this time to assume that any or all of these companies claimed the full $10 per watt, without solid evidence.
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