TPA Releases New Report on Solar Subsidies
July 10, 2015
The Coming Green Bubble: New Report Exposes Parallels Between Big Solar Financing Schemes and Housing Meltdown
Washington, D.C.—This week the Taxpayers Protection Alliance (TPA) released a brand new report about the heavily-subsidized solar industry titled, From Washington to Wall Street: How Government Policies are Skewing Solar Investments (click here). TPA concludes that Big Solar’s heavy reliance on risky financing schemes, combined with government handouts, is creating conditions that could generate a “bubble” in the solar market just as Washington policy produced the housing and financial collapse. This report is another one in the series analyzing the impact of government solar subsidies and preferential treatment on taxpayers and consumers. The new report also contains a link (click here) that details the generous solar subsidies by state.
“Taxpayers are being left defenseless between two powerful lobbies, Washington and Wall Street,” said David Williams, President of Taxpayers Protection Alliance. “This report carefully examines the public and private financing of solar power in the United States and concludes that combining Washington policy with government handouts for Big Solar presents a major threat to American taxpayers.”
As the report notes, Washington policy—much more than Wall Street greed—was the real source of the financial crisis of 2007-2008. But Washington has failed to learn its lesson and is similarly doubling down on Big Solar. “Government policies—specifically using taxpayer-provided money and taxpayer-backed loans—ignited the fire. Other government imposed rules which incentivized banks to securitize mortgages that in a free market would have been undesirable (low quality and high risk), along with the government purchase of those mortgages, burned the house down,” the report states.
The TPA report concludes, “Few people realize that the United States could be heading down a similar path with its current promotion of solar power. Subsidies available for solar power at the federal and state level come in a variety of forms. Most importantly, they are unreasonably generous. Much like the government-created housing bubble, the policymakers’ goal to increase renewable energy production is arbitrary and unnecessary. And much like the housing bubble and subsequent financial crisis, handouts at the federal and state level are creating a solar bubble that taxpayers are propping up, and it will be the taxpayers and investors who take the hit when the industry comes crashing down.”
“In recent years, companies have used a variety of financing mechanisms, most notably third-party solar leasing, to take advantage of lavish handouts. Companies are then bundling and securitizing those leases to raise funds to pay the upfront costs for more home and small business installations…,” notes the report. “Billions of taxpayer dollars and private investment have already been squandered from failed solar investments in the United States. Continuing to channel spending towards a politically-preferred sector of the economy and propping up an industry dependent on subsidies could result in a collapsing green bubble.”
Some of the results are already in:
- Billions of taxpayer dollars wasted.
- Billions of dollars in lost financial investment and misallocated capital.
- Homeowners struggling to sell their homes because of solar lease contracts and a rapidly depreciating solar asset.
- Solar manufacturers and leasing companies facing financial difficulties if future revenue streams are not as predicted, resulting in losses for investors.
For more information, and to read the full report, visit www.SolarSecrets.org