The US government has been pushing the idea of home solar panels for quite a while now, giving the industry a significant, additional nudge when the current federal subsidy program was generously expanded in 2008. The idea behind this was that if homeowners wanted to save some money on their energy bill by using solar power, they could receive a 30% subsidy to help cover the costs. Sounds pretty sweet, eh?

Well, when the government is giving away taxpayer cash, plenty of people will line up to get it… and it’s not always those who were intended to benefit. This is apparently going on in terms of this solar panel subsidy scheme as well, with at least one company figuring out a way to profit from it. SolarCity came up with a plan where homeowners could lease the solar panels over the long term rather than having to pony up the cash up front. The sales pitch was that this would allow them to start earning those big savings on their utility bills right away, rather than having to wait to save up or pay off the cash to purchase them.

As the following report shows, this freed up SolarCity to pocket the government subsidy money since the homeowner never actually took possession of the panels.

SolarCity has been accused of taking advantage of subsidies from the US government. Instead of these subsidies going to the consumer, SolarCity has been claiming them. SolarCity takes away a 30% tax credit while leasing solar panels to its customers. Most customers are unaware of the complicated laws that regulate solar policies.

Solar City has come under frequent criticism of its unethical behavior in milking hundreds of millions of dollars in subsidies from the USA government. Its sister concern Tesla, run by Elon Musk, is also facing the same criticism. One of the biggest issue that has come up with Solar City is the fact that it claims a 30% tax credit on its solar installation which is meant for its customers. It takes away the 30% tax credit, while leasing the solar panels to its customers who may face high electricity bills and do not get any share of the subsidy. Most customers are ignorant about the complicated laws and regulations that make up the solar policies. They are happy with whatever small savings that SolarCity offers them. USA’s federal and state governments have a lengthy complex procedure for approving solar subsidies. Compared to USA, Germany has a streamlined fast procedure where the individual customers get all the benefits. Unlike Germany in the USA, the installers and developers like SolarCity have popularized the PPA and leasing model which allows them to make money while the customers usually get the raw end of the deal.

This is turning out to be a better deal for the installer than for the consumer it was intended to benefit. But surely somebody else must have their snouts up to the Washington trough. So who else is benefitting, aside from the “green technology” installers? Well, the Chinese seem to be doing well.

One of the largest solar-system installers in the U.S., SolarCity Corp., uses the LLC strategy and currently buys a majority of its solar panels from the low-cost Chinese supplier, Yingli. Thus when President Obama said that we must subsidize our solar industry to remain competitive with the Chinese, it would have been more accurate to say that we subsidize Wall Street to create employee-less corporations that buy and install Chinese solar panels in the U.S. Wall Street and consumers understand that free markets are borderless; Washington does not.

Just last week, the U.S. International Trade Commission found the Chinese solar industry guilty of “dumping” solar panels in the U.S. Tariffs are likely to be levied against Yingli and others. Here then, is a practical guide to the Obama administration’s nonsensical solar policy: Washington gives tax breaks to Wall Street to fund LLCs that buy solar panels from the Chinese to “help” the American solar industry, while the ITC threatens to levy a tariff on those solar panels, which would raise the price of solar energy to U.S. homeowners. In short, Wall Street pockets the money and consumers get higher solar-energy prices.

The deal actually manages to get worse for the homeowners if they plan on selling their homes. If they wind up in one of these long term solar panel lease deals (the “free” ones mentioned above), potential buyers are less than eager to sign on to the owner’s lease arrangement as part of the conditions for purchasing the home. The lack of savings keeps on rolling!

Once the subsidy genie is out of the bottle, it’s nearly impossible to put back in. And the cash is not going to the people who were supposed to benefit from it while they helped to save the planet. But don’t worry… Uncle Sam will send you the bill next April.