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.

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Jan Ellen is CT Mirror's regular freelance Environment and Energy Reporter. As a freelance reporter, her stories have also appeared in The New York Times, The Boston Globe, Yale Climate Connections, and elsewhere. She is a former editor at The Hartford Courant, where she handled national politics including coverage of the controversial 2000 and 2004 presidential elections. She was an editor at the Gazette in Colorado Springs and spent more than 20 years as a TV and radio producer at CBS News and CNN in New York and in the Boston broadcast market. In 2013 she was the recipient of a Knight Journalism Fellowship at MIT on energy and climate. She graduated from the University of Michigan and attended Boston University’s graduate film program.

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