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Wednesday, October 10, 2012
SolarCity Reveals Details Of Treasury Investigation In Pre-IPO Documents
By Selected News Articles @ 5:55 PM :: 1430 Views :: Energy, Environment, National News, Ethics
 

SolarCity Reveals Details Of Treasury Investigation In Pre-IPO Documents

by Jessica Lillian on Tuesday 09 October 2012 Solar Industry (excerpts)

Earlier this week, San Mateo, Calif.-based PV integrator SolarCity filed documents with the U.S. Securities & Exchange Commission (SEC) that take it a step closer toward selling shares under its much-anticipated initial public offering (IPO)….

SolarCity is not currently profitable; it had an accumulated deficit of $70.3 million as of June 30, according to the company's Form S-1. The company lays out its case for future success by highlighting its end-to-end sales-service model, diversification into energy efficiency services, and continued expansion into new states.

Pre-IPO, several household names have already demonstrated their faith in SolarCity's model through their willingness to invest. "To date, we have raised $1.57 billion through 23 investment funds and related financing facilities established with banks and other large companies such as Credit Suisse, Google, PG&E Corp. and U.S. Bancorp," the company notes.

However, SolarCity has also revealed that it is under investigation by the Office of the Inspector General of the U.S. Department of Treasury, after having received a subpoena in July.

The probe, which also involves other unnamed participants in the rooftop PV industry, will determine whether SolarCity (or any of the other companies) inaccurately stated the fair-market value of their PV systems when applying for funds under the Treasury's Section 1603 cash-grant program. No specific allegations of misconduct or misrepresentation have been made against SolarCity yet, the company notes.

Rumors of "misrepresentation" on 1603 applications have swirled in the industry for some time. Solar Energy Industries Association President and CEO Rhone Resch alluded to such behavior - and other ethically questionable practices cropping up in the solar sector - at this year's Solar Power International conference.

During his speech, Resch warned that once knowledge of these ethical lapses become public, solar power's reputation could take yet another hit at an inopportune time.

For SolarCity and the other companies being investigated, the discovery of wrongdoing could also bring about significant financial consequences.

"The Department of Justice could decide to bring a civil action to recover amounts it believes were improperly paid to us," SolarCity writes in its SEC filing. "If it were successful it asserting this action, we could then be required to pay damages and penalties for any funds received based on such misrepresentations."…

Some project valuation discrepancies between SolarCity and Treasury officials have already occurred. Earlier this month, the Internal Revenue Service (IRS) notified the company that it was conducting income tax audits of two SolarCity investment funds. Once again, the investigation focuses on the fair-market value of PV installations for which SolarCity sought cash grants.

Some projects received Treasury grants at a "materially lower value" than what SolarCity had established in its own appraisals, thus requiring additional payments to investors or additional asset contributions, the company explains.

"We were unsuccessful in our attempts to have the U.S. Treasury Department reconsider its valuation for these systems," SolarCity adds. Later reviews of other project valuations on which SolarCity and the Treasury disagreed may result in SolarCity's owing millions of dollars to fund investors.

Finally, SolarCity's SEC filing also briefly addresses the company's ongoing legal dispute with SunPower. In February, SunPower filed a complaint alleging that five SolarCity employees stole valuable, confidential data from SunPower's servers just before leaving SunPower for their new jobs at SolarCity.

read … SolarCity Reveals Details Of Treasury Investigation In Pre-IPO Documents

 

October 2010: Facing default, Hawaii windfarm operator cancels IPO.

and No Money Down Rooftop Solar Providers Inflate Project Value for Tax Credit

Comments
comment By Hawaii Free Press @ Thursday, October 11, 2012 6:29 PM
Comments from the following blog entry: October 11, 2012 News Read, located at: http://www.hawaiifreepress.com/ArticlesDailyNews/tabid/65/articleType/ArticleView/articleId/7947/October-11-2012-News-Read.aspx

comment By Hawaii Free Press @ Friday, December 14, 2012 12:59 PM
Comments from the following blog entry: SunRun, SolarCity: Hawaii Solar Installers Subpoenaed , located at: http://www.hawaiifreepress.com/ArticlesMain/tabid/56/articleType/ArticleView/articleId/8424/SunRun-SolarCity-Hawaii-Solar-Installers-Subpoenaed.aspx

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