SolarCity Corp (NASDAQ:SCTY) is building one of the world’s largest solar panel manufacturing plants in Buffalo, New York. The company reached a deal with New York Governor Andrew Cuomo in September. Cuomo said the NY state would spend a huge $750 million in taxpayer money for the plant. In return, the San Mateo-based solar installer agreed to invest $5 billion in the state over the next 10 years, creating more than 2,900 jobs.
It looks like a report from the CIA
Recently, a local TV station News 4 requested the contract details between SolarCity and the state through a Freedom of Information request to see the big promises in writing. The state provided News 4 with a whole lot of blacked out pages (image above). Almost all the numbers were redacted from the contract. It looked more like what a news agency would receive from the CIA.
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The New York state officials said the redactions reflected trade secrets in the contract. The state claimed that the disclosure of specific terms will affect the ability of both parties to negotiate deals effectively with others in the future. What’s more, the state can reveal the information only after being granted SolarCity’s permission. When and how will SolarCity invest $5 billion in Buffalo? That portion of the contract is blacked out.
It’s unclear how many of the 2,900 jobs the company will create each year. The “Investment and Job Milestones” section of the contract is a big black box. The contract states that if New York state terminates the contract, it will have to pay SolarCity some taxpayer money. But how much? That’s blacked out. Experts wonder why Cuomo agreed to subsidize a private company.
SolarCity to pay just $1 per year in rent to NY state
Nick Loris, a policy analyst at Heritage Foundation, told Watchdog.org that if SolarCity promises to invest $5 billion in the state, why can’t if invest $750 million of that amount if its product is so promising. Loris said people of the state had the right to know how their tax dollars are being spent. He said proprietary information can be kept secret. But when your contract involves public money, the process must be transparent.
New York Governor Andrew Cuomo used a lot of big numbers at the factory’s groundbreaking on Sept.23. But he didn’t say that the NY state would own the plant and charge SolarCity a meager $1 (not a typo) per year for the next 10 years. SolarCity is already under investigation for allegedly inflating its sales figures to gain additional federal rebates.
SolarCity shares fell 2.39% to $50.54 at 11:01 AM EST on Tuesday.
Full Disclosure: Vikas Shukla has no stake in SolarCity or any other solar company. He neither stands to gain nor lose from any price changes in the U.S. solar stocks.