Feds back a Solar winner?

As most of you know, my news sources are diverse.  I’ll read HuffPo as well as Fox news, and much in between.  I find when I do this, it is easier for me to discern what the truth is.  I’ve come to know, as most everyone else has, the idea of an unbiased media is a myth.  And, perhaps its always been that way.

So, I’m reading HuffPo, and its talking about a solar power company, SolarCity.  It talks about a another guaranteed loan by the feds.  Oh boy, I say this ought to be good.  I read on, the “plan calls for SolarCity to receive a $344 million Department of Energy-backed loan from financiers U.S. Renewables Group and Bank of America.”  Now I’m really concerned.  BOFA?  Aren’t those one of the pinheaded banks that helped get us in this economic mess?  Continuing, “SolarCity predicts that the initiative will create 6,000 jobs over the next five years.”  Well, I do the math, it comes out to about $57,000/job.  That’s not too bad.  Quite reasonable, in fact.  Is it possible a solar power company and the feds got something right?  Did someone accidentally do something nearly sensible?  Well, ok, there’s really nothing sensible about the solar power industry, but even still, is it possible that with a relatively small investment, did the government actually help create jobs?  If true, I’ll have to rethink my position on Keynesian economics!

However, being a bit cynical of the feds and solar power companies, I dig a bit further. 

I do a simple search for “SolarCity” using “Bing”.  I find this headline……. BofA, US Renewables Back Part of $1 Billion SolarCity Rooftop Project .  Sigh, maybe these are two different projects.  They’re not.  On a positive note, the taxpayer won’t be left to pay for this loan.  It is pretty much a slam dunk.  Why, because the solar panels are going on homes leased by the military.  I shudder to think how much we’re paying for this, but Google has deemed it a money maker and has invested in SolarCity and the project.  And, that’s the good news.  The 6,000 jobs?  They’re not permanent.  Most are temporary construction jobs.  The investment is a total of $1 billion, meaning that each job now costs $167,000.  Worse yet, “The $344 million loan is similar to a $1.4 billion loan, also backed by a DOE loan guarantee, that BofA agreed to provide to NRG Energy Inc. (NRG) and ProLogis Inc. (PLD) to finance part of a $2.6 billion commercial rooftop solar project.”  And, oddly, “BofA’s solar loans are part of the bank’s plan to put $20 billion of capital to work in renewable energy, conservation and other clean technologies that address climate change, Plowe said.”   Wait…….. WHAT??!?!?!?!??!?!?

Where in the hell did BofA get $20 billion?  They don’t have that kind of jack!  They’ve just announced that they’re laying off 30,000 people!  AIG is suing them for $10 billion! 

Summary…..  From a business perspective, SolarCity’s project is a winner.  The contract is signed and the U.S. govt will pay for the work………regardless of the price.  So, the loan guarantee is secure.  We need to investigate how much the military will be on the hook for this.  We also need to figure out how it is that BofA got its hands on $20 billion dollars to throw at an industry that is going nowhere fast.  And what is the angle for Google?  This whole deal smells wrong.  And while we’re not on the hook for the loan guarantee, we’re on the hook for ensuring the load pays for itself.  I’ll be sure to update on this story as I find out more, but this is bad.  This is way out of my purview, but This Is Scandalous.


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