There’s an old saying that an onion rots from the outside in and a potato rots from the inside out. I think some light needs to be shone on this solar debacle in order to decide what kind of vegetable it is.
Our representatives from the local to the State House have allowed this Morris/Somerset/Sussex county rotten solar scheme to occur. How was the public’s money put at such risk so that a private company (SunLight General) could use it as a backstop for trading in the Solar Credit Market? I’m all for alternative energy projects that can save the taxpayers money, but this scheme used public money to benefit a private company.
According to appellate court papers filed by the project’s sub-contractor Mastec, taxpayers were supposed to be responsible for 70 percent of the cost, and SunLight General would be responsible for the other 30 percent. However, SunLight’s 30 percent was allowed by our state representatives to be deferred until a federal grant was secured and the solar credits traded. In other words, SunLight did not have the 30 percent and did not have to show any proof of funds. There’s more.
According to arbitration papers, SunLight was allowed to create "thinly financed" LLCs so that the counties could insulate the company from financial liability, and these LLCs were responsible for the required performance bonds against default. So essentially, taxpayers had to put up 100 percent of the money and supply its own performance bond.
Also according to arbitration papers, the “grant program was set to expire by the end of December 2011, and therefore any project which hoped to qualify had to close before that day and establish that a certain amount of materials had actually been acquired by then.” If these benchmarks were not met, SunLight couldn’t qualify for the grant money it was depending on for its portion of the project. When the grants expired, the market for solar credits SunLight was to trade, collapsed.
But remember, SunLight set up these LLCs as partnerships with the counties, so it was really the counties and taxpayers who were on the hook. Why would taxpayer money be put at such risk for a company that a) wasn’t investing any of its own, and b) benefiting from the savings generated by the production of solar electricity on municipal properties?
Why weren’t any questions raised about the risks involved in this trading scheme? The market for solar credits went awry early in 2012, and no one representing citizen interests rang the alarm bell.
Michael F Grace
NJ Democratic Assembly Candidate District 24