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.