Green Leaf Report

  Dale Julin writes an interesting article about growing pains in the solar industry: “The Utility Fox is Guarding the Solar Henhouse.” The California Solar Initiative’s earmarking of around $2B for solar energy production is a program that should be repeated across every state, in whatever form of renewable energy is most appropriate for the local climates. But we’re starting to see the effects of increasing program size: paperwork.

This uncovers the danger for all business models that rely on tax credits or utility payments for a large part of their cash flow: the government, large utilities, or any large business is slow in making payments out. This is generally caused by all of the fraud checkpoints that a large program warrants.

I can certainly understand that anyone involved in a two billion dollar program wants to make sure the payments are used in the appropriate manner. Imagine the bad PR if it’s uncovered that most of the payments went to wasteful, inappropriate vendors. But putting the burden of proof on the smaller company applying for these payments creates potentially unanticipated administrative costs. Is there a way around this? Probably not; the bigger the solar repayment programs get, the greater the risk for fraud and misappropriation becomes. The solar business models relying on these payments will need to be adjusted to account for both the administrative costs of applying for repayments as well as the cost of delayed cash flow.