Monday, June 01, 2015

An Artificial Economy Fueled by Taxpayer Dollars . . .

Last September we noted Oneida County's deal with Solar City to install solar panels. In October we discussed the State's "trophy project" deal with Solar City to make solar panels in Buffalo. By January we noted the secrecy surrounding the Buffalo project which continued through May.

The story now continues:  Per the L.A. Times over the weekend:  Elon Musk's growing empire is fueled by $4.9 billion in government subsidies.

Los Angeles entrepreneur Elon Musk has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space.

And he's built those companies with the help of billions in government subsidies. . .

Tesla and SolarCity continue to report net losses after a decade in business, but the stocks of both companies have soared on their potential; Musk's stake in the firms alone is worth about $10 billion. . . . 
Musk and his companies' investors enjoy most of the financial upside of the government support, while taxpayers shoulder the cost.
Regarding the New York project:
New York state is spending $750 million to build a solar panel factory in Buffalo for SolarCity. The San Mateo, Calif.-based company will lease the plant for $1 a year. It will not pay property taxes for a decade, which would otherwise total an estimated $260 million.
An accompanying article gives this breakdown of government benefits to Solar City:
$750 million — New York State cost to build solar panel factory 
$1.5 billion — Estimated value of 30% subsidy for solar installation since 2006, including at least $497 million in Treasury grants 
$5.6 million — Oregon tax credits and rebates
         $260 million  — New York local property tax exemptions

You have to ask yourself two questions: (1) If solar panel installation and manufacture were such a good deal, why was this not financed by private investors?  (2) How long can taxpayers keep subsidizing government-approved technologies?

5 comments:

cnytruth said...

Strike note that the "Fort Schuyler Development Corporation" is dealing with the actual leases for "Solar City" and a lot of the "development" there. Same gang of fakes making a huge cloud of hot air over the state-funded "Nano" rental space that's sitting vacant in Marcy.

Solar City's recent filings look pretty dismal as opposed to earlier.

The same old names and associations.

Anonymous said...

The OD did its typical cheerleading job over the Nano project. It would seem prudent for even them to wait to see how much of the project is real and how much will be funded and subsidized by the taxpayer. My guess is that the area will once again be treated to more taxpayer job dependency that never seems to result in private sector job creation, tax base expansion or very many new people moving in. If the project was an economic home run it would have been announced by now.

RomeHater said...

I still think Utica Nano is an impending dud. They are talking about tens of million of dollars when Albany Nano is getting tens of billions. I went there once and they showed me one machine that was $65 million.

This won't be competitive, just a tax write off for someone else.

Anonymous said...

Rome Hater, The real problem is that the tens of millions are our tax money. We don't "get" tax money, we pay it.

Anonymous said...

It's interesting that we barely ever hear of the EDGE these days. Where is the vaunted chip plant? What does the EDGE do? What was the last industry they recruited in? Why are we still paying them?