First, let me preface this by saying that I actually like Elon Musk – who’s an immigrant who came to this country to make his fortune and actually did it on his own. He got a company started that provided online city guides to the newspaper industry and turned a $28,000 investment into a $307 million payout in just four years, and that was before he got into PayPal, which made him REALLY rich.
And a lot of the stuff Musk is doing now is quite cool. SpaceX is a government contractor, but the work that company is doing is making space flight interesting again. And while Tesla is a company soaking up extravagant government largesse to make hyper-expensive electric cars they at least look great and, from what I understand, drive like a dream until the battery runs out.
But what Musk seems to be focusing on lately is more scam than innovation. And his company that makes and sells rooftop solar panels, SolarCity, is the worst thing he’s done.
Musk is going to be in New Orleans tomorrow to promote SolarCity and solar energy’s sweetheart tax and regulatory treatment, and given that circumstance it’s worth mentioning just how awful what that company does.
Namely, screwing the taxpayer.
Every time SolarCity sells one of its rooftop solar systems, which go for about $23,000 on average, the taxpayer is out $7,000 in subsidies and tax credits from the federal government.
You heard that right. SolarCity claims they’ve generated 217,595 customers since 2006, and the L.A. Times quotes an estimate by the Union of Concerned Scientist which says SolarCity has pocketed some $1.5 billion in federal government swag. That comes to $6,893.54, or about $7,000, every time he makes a sale.
That doesn’t count the free stuff state and local governments kick in, and of course in Louisiana we’re one of the most generous states in the country – so some 80 percent of the cost of a rooftop solar system here is paid for by somebody’s tax dollars.
That’s not a free market. It’s crony capitalism. It’s not like PayPal, where Musk was operating purely within the framework of consensual transactions. I don’t choose to subsidize some rich lefty’s decision to put solar panels on his roof; someone chose that for me.
And SolarCity is the No. 2 retailer of rooftop solar in America.
I don’t have a philosophical problem with solar energy; in theory solar energy sounds like a pretty good idea. If you can efficiently capture the sun’s rays and use it to power your house, great. In Louisiana with all the clouds and rain we get, it’s probably not such a great idea, but that’s not my problem.
At least, it’s not until I have to pay to subsidize somebody’s purchase of solar panels.
And it’s worse, because not only are my tax dollars paying for some 80 percent of the cost of rich people’s solar panels but in Louisiana the rich people with solar panels on their roof have managed to fix it so that they can sell their excess power to the utilities when the sun is shining at retail rates. That’s the underlying basis of this “net metering” thing you might have heard of. Which means not only are my tax dollars paying for the installation of Elon Musk’s solar panels, which allows him to jack up his prices far beyond what the market would tolerate without the government’s involvement, but my electric bill is higher, if only by a little bit, because his customers are getting a government-mandated top-dollar rate for power they sell back to the utilities. And of course the cost of that arrangement is – naturally! – passed on to the rest of us who don’t have solar panels on our roofs.
I’m not going to say solar power in and of itself is a scam. I am going to say that these subsidies, tax breaks and brother-in-law net metering deals are a scam. They’ve got nothing to do with the market. In fact, despite all the free stuff from the government SolarCity has never turned a profit in a decade of operations.
And don’t give me this crap, that the solar energy continually gives, that fossil fuels are getting all kinds of subsidies. For one thing, the amount of money that we’re paying in taxes for a gallon of gas is off the charts – gasoline is taxed to the gills, not subsidized. And for another, if there were these massive subsidies being paid to the oil and gas, or coal, industry then that’s an argument for ending them, not putting the solar guys on the government teat.
The market doesn’t want solar energy – at least not the way SolarCity is doing it. But they’re still around, because the politicians sure love the campaign cash the solar energy is doling out.
Last year SolarCity and its pals in that industry did everything they could to take Eric Skrmetta down. Skrmetta – who doesn’t oppose solar energy but does have a problem with the level of subsidies the industry gets – barely won re-election to his seat on the Public Service Commission. The solar industry found a thoroughly dishonest candidate in Forest Wright, who didn’t live in Skrmetta’s district and hadn’t lived in the Baton Rouge district he’d unsuccessfully run for the PSC in back in 2012, either, recast him as a Republican instead of the lifelong Democrat he’d always been and dumped a million dollars into character assassinations against Skrmetta in one of the most disgracefully mendacious political campaigns in Louisiana political history.
SolarCity dumped $15,000 into Wright’s campaign last year, and they’ve also dumped an additional $10,000 into a PAC called Louisiana Conserves PAC, which has been busy trying to pressure state legislators into preserving those sweetheart tax credits in Louisiana.
Frankly, I liked Musk better when he was making it easier to pay online and I like him better when he’s shooting rockets into space for less cost than NASA. Nothing about the business model of this company looks honest or productive. And if his speech tomorrow is about anything other than how he’d like to stop fleecing taxpayers and start turning a profit based on real prices, I don’t want to hear it.