At least two major firms that do solar installations in Connecticut are among three that are under investigation by the U.S. Treasury Department, according to a report in the Washington Post and in several other publications.
SolarCity, which just a week ago announced it was expanding its Connecticut operation, is one of them. SolarCity’s announcement coincided with the company’s initial public offering, which had been delayed over turmoil in its price.
Reports say the other companies are Sungevity, which operates in the state, and SunRun.
All mainly install solar systems using a solar lease model in which home and business owners pay the company for solar power at rates generally lower than utility prices.
Such systems, like others, are eligible for a 30 percent federal tax credit based on the installation cost. But solar lease companies typically use fair market value as their cost basis. Reports indicate the probe is looking at whether these companies, considered the largest in the country, have been inflating that price, which in turn increases the tax credit.
In leased systems, it is the system owner, not the building owner, who gets the benefit of that tax credit. Reports indicate the three companies also received considerable stimulus funding to help promote solar development.