Government? Who needs government? Private companies reach deal to build solar panels for military houses

One of the major debates between the two political parties in the United States has always been: More government versus less government.

Uncle Sam lending a helping hand to any and all who need it from time to time, versus individuals and private companies hauling themselves up by their own bootstraps and making do on their own. The specter of Big Brother looming over the shoulder of every American, versus a government that stays out of people’s way and lets the individual prosper or fail on their own.

Of course, it’s never really as simple an argument as that. Everyone needs some government in their lives, and the government also does need to often allow individuals to fend for themselves. Sometimes, though, it’s when private individuals and groups fail to act, and accept the government’s help, that great things can be accomplished.

Take what just happened between a solar panel company out of California called SolarCity, the economic behemoth that is Bank of America/Merrill Lynch, and a real estate managing group called Lend Lease. The three companies just combined (or teamed up, really) to do something on a grand scale: They’ve agreed to spend $1 billion over five years on solar panel projects for military-based housing communities across the country.

Originally, SolarCity and Bank of America/Merrill Lynch tried to get help from the Department of Energy to get funding for the project, but SolarCity missed a deadline. Undeterred, Bank of America/Merrill Lynch agreed to continue funding the project, and now it may result in solar power systems being in 120,000 military homes.

“BofA Merrill never wavered when the loan guarantee wasn’t finalized and worked with us to create a financing structure that works well without it,” Lyndon Rive, SolarCity’s Chief Executive Officer, said in a statement. “SolarStrong makes affordable clean energy available on a much greater scale. This is uncharted territory for residential solar. The fact that SolarStrong can move forward without a federal loan guarantee is a clear indication that long-term incentives such as the investment tax credit are working.”

(Workers put solar panels on a roof at the Soaring Heights Communities at Davis-Monthan Air Force Base outside Tucson, Ariz. Photo source: Lend Lease)

Now, whether the last part of Rive’s statement, that this is proof that the investment tax credits are working, could be debated. But what can’t be debated is the positive impact this cooperation will have.

A bit about SolarCity: They’re based in California and say as part of the company’s description that it was “founded with the mission to help millions of homeowners and businesses adopt clean power, protect themselves from rising gas and electricity costs and protect their environment from polluting power sources.”

SolarCity has 23 operations centers serving Arizona, California, Colorado, Hawaii, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Texas and Washington, D.C.

The current project, called SolarStrong, has been in the works since mid-2010.  SolarCity initially teamed up with private equity firm U.S. Renewables Group to try to secure Department of Energy funding, and with Bank of America/Merrill Lynch’s help, did initially get a partial loan guarantee from the DOE this past September. But SolarCity was unable to meet a Sept. 30 deadline to finalize the loan, and it was possible the project was to be lost.

But Bank of America/Merrill Lynch agreed to keep funding the project and move forward.

“There really weren’t a lot of financing tools available, so it was done one rooftop at a time,” Jonathan Plowe, a head of the new energy team at Bank of America/Merrill Lynch, said in a recent NPR story.

Bank of America isn’t putting up all $1 billion for the ambitious project; it’s forking over $350 million, so SolarCity will still need more money. Still, the SolarStrong project has a lot of things going for it.

For one thing, this could be a major job creator. SolarCity expects to create thousands of full-time and temporary jobs through this project; putting panels on 120,000 new homes will take an enormous amount of man-power.

And SolarCity has said that it hopes to give many of those jobs to struggling, out of work veterans; it’s easy to forget sometimes that the number of veterans has exploded this decade thanks to the war on terror in both Iraq and Afghanistan, and military veterans have been particularly hard-hit by the recession that’s been going strong for three years now.

The project itself seems affordable and will take advantage of the many tax credits the U.S. government gives to solar energy companies. SolarCity said after teaming with the leading military housing developers in the country (like Lend Lease, the company mentioned above, on whose bases in Tucson, Ariz. and Honolulu, Hawaii SolarCity has already worked, it will install and own the solar systems and sell the electricity back to the private companies that manage the military housing complexes.

One benefit of building solar panels on so many houses in a small area, like on a military base, Rive said, is that it’s economical, concentrating the work in one area and not stretching workers all over the place.

And Lend Lease says it also can save money with these projects, as the solar systems bring down electricity costs on the base, therefore allowing them to use the financial savings in other areas.

Now, of course let’s not forget solar power and solar energy are not without controversy. As you have likely read and heard about, some companies have not been exactly judicious with their money, and the government’s money. But Solyndra may have been a colossal disaster, going belly up after wasting billions of the government’s dollars, SolarCity has a good track record so far.  Too often one bad mistake by a company in a new industry sets back everyone else in that industry, ruining the good name of others who are trying to play by the rules and make a positive contribution.

SolarCity seems like one of the good companies out there in the solar industry; the company says it has added 1,200 new jobs in the past four years.

And Bank of America/Merrill Lynch, which has come in for abuse like so many banks have during the Occupy Wall Street movement, stepped up here and made an enormous investment to help a private company.

SolarCity still needs to raise more money. The solar panels and solar systems have yet to be installed. But cautious optimism is certainly warranted here, as SolarCity tries to make life just a little better and easier for military families living on bases.




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  • Ras
    December 15, 2011

    All tax incentives mean is that they pay less and we pay more. We meaning those who pay taxes. Michael, I would like to introduce you to the Article 1 – The Legislative Branch, Section 8 – Powers of Congress of our constitution. In the words below where do you find the concepts:
    “To engineer our markets so to meet political standards and in doing so choose winners and losers based on the directions of special interest groups”

    The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

    To borrow money on the credit of the United States;

    To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

    To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

    To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

    To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

    To establish Post Offices and Post Roads;

    To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

    To constitute Tribunals inferior to the supreme Court;

    To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;

    To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

    To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

    To provide and maintain a Navy;

    To make Rules for the Government and Regulation of the land and naval Forces;

    To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

    To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

    To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings; And

    To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

  • Jerimiah Taylor
    December 15, 2011

    We’re seeing these guys pop-up all over Tucson. I think it is great for us to be harnessing the natural energy sources that are out there, and we have plenty of sun to do so.

    I hope that large banks and corporations continue to see the value in these green energy projects and they make them a priority with or without government intervention.

    I know we can use all the help we can get to resuccitate our distressed housing market in Tucson.

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