More Green Eggs and Scam; Served New York Style

Tom Shepstone
Shepstone Management Company, Inc.

 

The “Green Eggs and Scam” story continues to evolve with one solar fiasco after another, driven by corrupt cronyism and political correctness.

A post I wrote a while back called “Green Eggs and Scam,” which regularly gets quite a bit of daily readership on this site as solar promotion schemes continue to get lots of attention in New York, where corrupt cronyism knows no bounds. Elsewhere, both political parties continue to enable the cronyism that produces ever more green eggs & scam.

Every single day there is more evidence of solar dreams going dark, but you wouldn’t know it by the hyperbole coming out of the Cuomo administration, from the mouths of special interests or the actions of Congress. Yes, there are some individual states and nations starting to awaken to the dangers of ratepayer and taxpayer subsidy schemes that dangerously distort markets and threaten energy security, but tax credits are being extended, solar farms and utility scale projects are being exempted from normal legal requirements and slush funds are being created to funnel money to business and political cronies.

green eggs

Several examples of green eggs and scam have made the news recently. Google’s Ivanpah experiment with producing solar-thermal power in the desert, for example, which depends on natural gas for backup/startup, is failing according to a recent article in RenewableEnergyWorld.com:

California regulators gave the owners of the world’s biggest solar-thermal power plant more time to avoid defaulting on a contract with Pacific Gas and Electric Co. after failing to supply power they had guaranteed.

The California Public Utilities Commission approved a PG&E proposal at a meeting Thursday that would avert a declaration of default through July 31 if the owners of the Ivanpah solar farm in California’s Mojave Desert pay the utility for shortfalls in generation. Ivanpah is owned by NRG Energy Inc., BrightSource Energy Inc. and Alphabet Inc.’s Google, and operated by NRG…

The threat of default brings into a question the future of a project that won a $1.6 billion loan guarantee from the U.S. Energy Department. Before winning the loan guarantee in 2012, plant builder BrightSource Energy told government officials that its cash position was “precarious” and said the project’s failure would be a “major embarrassment” to the White House.

Solar farm proposals are also being pushed throughout much of New York over the last year or so by companies such as SunEdison and SolarCity, with the active support of thge Cuomo admninistration. They are running into predictable opposition from the same types of NIMBYs and activists who oppose natural gas development, as well as ordinary citizens, as this article in the Batavian makes clear:

Members of the Town of Batavia Planning Board responded coolly to a proposed solar farm off of Bank Street Road at its monthly meeting Tuesday night.

Buffalo-based attorney Gregory P. Scholand, representing SunEdison, outlined the company’s plan for 15 acres that are currently cultivated for peas.

The farm would produce two megawatts of electricity, which is enough energy for about 300 homes.

Scholand told board members he had to be honest — the solar farm won’t create jobs and any increase in assessed value, which means more tax revenue, will be delayed by state-backed incentives for solar installations.

“In other words,” said Board Member Lou Paganello, “the only people who will benefit are the landowner, National Grid and SunEdison.”

The Cuomo administration is now trying to clear these hurdles facing solar farm proposals and push them even harder as part of the Governor’s $1 billion NY-Sun initiative; apparently on behalf of its cronies at SunEdison and SolarCity.

green eggsThe state’s Public Service Commission (PSC), now firmly under Cuomo’s control and the Joint Landowners Coalition of New York, says “Cuomo is using the states agencies to push solar farms into our communities using your tax dollars as subsidies.” The evidence is the PSC’s recent announcement:

The New York State Public Service Commission (Commission) today announced new regulations making it faster and easier for solar energy, microgrids and other distributed generation projects to connect to the electric grid and advance the development of renewable power under the state’s new Clean Energy Standard…

The Commission’s order increases the size of distributed generation projects (from 2 MW to 5 MW) that may apply under the state’s “standardized interconnection” process. In addition, under the previous regulations, interconnection developers had to pay the entire cost of interconnections up front. That up-front cost will now be cut to 25 percent, although construction will not begin until full payment is received, according to the new Standardized Interconnection Requirements (SIR) approved today. The Commission also amended its rules to enable utilities to more-easily process and analyze the large numbers of applications currently filed by solar and other DG power developers…

“While other states have recently slowed solar development through regulatory actions, New York has strongly embraced the development of renewable power as it considers changes to encourage and promote the financing and installation of solar and other clean-power sources,” said Chair Zibelman…

New York State is committed to taking additional steps to further advance the installation and interconnection of solar and other distributed energy resources. As part of these efforts, the New York State Energy Research and Development Authority (NYSERDA) and the Department of Public Service (DPS) will provide ombudsman services to assist developers and utilities with interconnection applications and new distributed generation projects…

The State has also created the New York State Interconnect Working Group, which is made up of representatives from DPS, NYSERDA, utilities, New York Solar Energy Industry Association, and a few individual installers. While the ombudspeople will work on issues regarding individual installations, the Working Group will work to solve technical interconnect problems that affect large numbers of projects.

The role of NYSERDA in all this in interesting because that agency, too, has now been under Cuomo’s thumb for a while and who was appointed to the Board of Directors in 2014, but the founder of SunEdison, Jigar Shah:

Jigar Shah is an entrepreneur and author of Creating Climate Wealth: Unlocking the Impact Economy. He is the CEO of Jigar Shah Consulting and a board member of the Carbon War Room. Shah founded SunEdison in 2003; today the company is the world’s largest solar services company. SunEdison developed the power purchase agreement (PPA) business model, which allows customers to “pay as they go” for solar energy, eliminating any upfront capital costs of ownership. Shah graduated from the University of Illinois, and holds an MBA from The University of Maryland. Besides the Carbon War Room, he also sits on the boards of the SolarNexus, KMR Infrastructure, Prometheus Institute and Greenpeace USA.

green eggs Jigar-Shah

SunEdison has, no surprise, been a big beneficiary of NYSERDA/NY-SUN/Cuomo largesse, as this story from Saratoga Springs makes clear:

The city of Saratoga Springs will soon move forward with a project creating a 2-megawatt solar array to provide power at the city landfill.City Commissioner of Finance Michele Madigan said the city’s contractor, SunEdison, was successful in obtaining support from the New York State Energy Research and Development Authority (NYSERDA) through the Governor’s NY-Sun Competitive PV Program.

NY-Sun is a $1 billion initiative of Gov. Andrew M. Cuomo to advance the scaleup of solar and move the state closer to having a sustainable, self-sufficient solar industry. According to the governor’s office, SunEdison and the city of Saratoga Springs were selected among a competitive field of applicants.

SunEdison, along with the NRDC gang, is also a big fan of the Cuomo slush fund enterprise known as the NY Green Bank, about which we have earlier written here and here:

Governor Andrew M. Cuomo today launched the first step of his $1 billion New York Green Bank initiative through a petition to use approximately $165 million in uncommitted funds for the Green Banks initial capitalization. The petition was filed by the New York State Energy Research and Development Authority (NYSERDA) to the Public Service Commission (PSC). This initial funding, once approved by the PSC, will permit the Green Bank to leverage private sector financing for clean energy projects that create jobs and help make New York’s communities more sustainable…

Douglass Sims, Senior Policy Analyst at the Natural Resource Defense Council’s Center for Market Innovation, said, NRDC is pleased to see the New York Green Bank taking shape. We expect the bank, which is being designed to leverage public and private capital, also to create synergies with the State’s most effective existing clean energy programs. This comprehensive and innovative approach promises to yield more clean energy per New York dollar invested and set a national and international precedent for smart climate investment…

Fred Zalcman, Director of Government Affairs for SunEdison, a leading solar developer, said, Innovative public-private sector financing is the next frontier in unlocking the economic and environmental benefits of clean on-site generation. We applaud Governor Cuomo for having the vision to create the New York Green Bank and look forward to working with NYSERDA and the PSC to maximize the reach and effectiveness of this important new financing vehicle.

There’s just one problem with all this; SunEdison, like Ivanpah and, very likely, Cuomo’s pet project SolarCity, is going down the tubes as cronyism at the huge expense of ratepayers and taxpayers crashes into reality.

green eggs

Here’s the latest on the “world’s largest solar service company” and its fortunes:

Shares of SunEdison Inc. SUNE plunged as much as 50.9% on Apr 4, 2016, to a new 52-week low of 20 cents and eventually closed at 21 cents. This represented a one-year decline of 99.2% and a year-to date fall of 95.9%

According to Reuters, “TerraForm Global Inc. on Monday sued its controlling shareholder, SunEdison, accusing the cash-strapped solar power plant builder of diverting $231 million of the company’s cash to pad its balance sheet rather than to finish important projects in India.”

What’s worse, SunEdison tanked, after one of its two yieldcos, TerraForm Global Inc. GLBL recently warned that the company is at a “substantial risk” of bankruptcy…

The stock has been on a downtrend since the second half of 2015 as investors have become increasingly cautious over the company’s ability to finance its projects. Last year, the company made a string of buyouts to expand its global operations and become the world’s leading renewable energy developer.

Vivint Solar Inc. VSLR had earlier terminated the deal related to its acquisition by SunEdison as the latter failed to meet certain obligations. We note that SunEdison has been struggling to finance its projects due to high debt as a result of a string of buyouts, including First Wind and Solar Grid Storage, made over the past one year.

The situation worsened in July last year when SunEdison entered into a definitive agreement to acquire Vivint Solar in a cash-stock deal worth $2.2 billion.

These acquisitions, once believed to be strategic, are now burning a hole in SunEdison’s pocket. The acquisitions have taken a toll on its balance sheet with total outstanding debt (including current portion) nearly doubling to $11.7 billion at the end of third-quarter 2015 from $6.3 billion a year ago. In our opinion, a highly leveraged balance sheet may limit its financial flexibility and weaken earnings growth prospects.

There’s nothing here that could not have been easily predicted by anyone familiar with the solar industry’s and, especially, the utility scale solar industry’s reliance upon direct and indirect ratepayer subsidies, renewable portfolio mandates, tax credits, special deals, requirements to buy back solar power at top price when not needed and taxpayer funds to survive. The industry is completely dependent on cronyism from top to bottom, one huge bubble starting to burst everywhere simply because its all unsustainable. Natural gas, not green eggs and scam, combined with a variety of other supplementary energy sources, including unsubsidized solar, is the answer. Lets end the cronyism.

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9 thoughts on “More Green Eggs and Scam; Served New York Style

  1. Towns should demand guaranteed bonds for failed and abandoned Solar arrays that will be left on property. The bonds should be escrowed before a shovel hits the ground.

  2. Concerns
    What happens if my town opts out of the tax free Cuomo incentive as I understand it is optional, Am I now taxed at a commercial rate and f so I understand taxes are my responsibility?

    Leases if held by contract payment are for 40 years. What does this mean if I want to sell my property?

    Do leases devalue property for me and or my neighbors?

    Who removes the many poles and concrete footers once the solar array is outdated or bankrupt?

    What is the environmental Impact to my property, to the animals and to water?

    Is there a SEQRA requirement?

    What about the chemicals being used to slow brush growth under the panels?

    How many trees will be deforested to make way for solar and solar transmission lines?

    who determines the right of way across peoples properties for transmission lines and service roads?

    can my neighbors sue me for loss of property value and Views scape?

    Where are the toxic panels to be stored in NY once they are out of service

    With so many 15 – 40 acre solar farms planed by Cuomo, (I understand 170,000 acers is targeted in NY this year alone) why is there no SGEIS required to answer the above questions and more?

  3. all excellent questions, and rhetorical of course…

    NY is not even a state under His Excellency, it’s simply an extension of NYC and we are serfs.

    the notion that hundreds of thousands of acres of solar panels, and hilltops leveled for wind turbines has no environmental impact is pretty damn deceptive. they won’t be in NYC though, they’ll be in our backyards.

    here comes 40 cents/KW electricity.

  4. http://earthfirstjournal.org/newswire/2014/08/22/dont-come-to-new-york-for-the-peoples-climate-march-come-to-grow-the-eco-resistance/

    Speaking of politics, natural gas and energy– above is a link to Bernie Sanders energy policy circa 2014. Thought I would pass on as I read that Bernie Sanders the antifracking plus other movement’s candidate will be speaking in Binghamton.

    http://www.pressconnects.com/story/news/local/2016/04/08/bernie-sanders-coming-binghamton/82793654/

  5. https://mobile.twitter.com/MarkRuffalo/status/718480484355846145

    Mark ruffalo wants you to see antifracking documentarian Jon bowermasters film. It is called dear president Obama. The first one was called Dear Governor Cuomo and I think there was one called dear guv brown.

    Pretty sure those are three Democrats.

    Good thing the antifracking movement has a non Democrat antifracking candidate running in their party then eh? Feel the Bern I think is the expression.

  6. http://www.newsweek.com/how-fractivism-could-change-new-yorks-primary-445265

    Also Alex beauchamp of food and water watch says it’s like a myth that anyone likes fracking in PA or something like that. Then again Alex and food and water watch know a lot about myth making themselves. Also conspiracy theories. As his pal Eric Weltman was all over news claiming an LNG import was secretly for export and the saavy NY press never caught on!

    Plus I think the person who wrote that thinks they are doing reporting.

  7. The Economist Magz last week had an article of two solar companies on verge of bankruptcy one in USA, one overseas. The SEC is investigating for fraud (Sen Sanders would you help them).?

  8. Pingback: The Insanely Corrupt Politics of the Constitution Pipeline

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