Oregon AG Probing Use of State Tax Credits for Solar Power Project

By Barbara Hollingsworth | April 1, 2015 | 2:37 PM EDT

Solar energy panels installed by SolarCity at the Oregon State University campus. (Oregon University System)

(CNSNews.com) – SolarCity, the nation's largest solar energy provider, is under investigation by the Oregon Department of Justice, a spokeswoman for state Attorney General Ellen Rosenblum confirmed to CNSNews.com.

The company, whose chairman is tech billionaire Elon Musk, allegedly installed solar panels made by federal prisoners at two green campus projects while pocketing $11.8 million in state tax credits intended to create jobs for Oregonians.

The prisoners, who were incarcerated at the Federal Correctional Institution (FCI) in Sheridan, Ore., were reportedly paid just 93 cents an hour – well below Oregon’s $8.95/hour minimum wage – to assemble some 3,000 solar panels SolarCity installed at Oregon State University and the Oregon Institute of Technology.

Gov. Kate Brown asked Rosenblum to launch the investigation of SolarCity after The Oregonian/OregonLive reported that the highly-subsidized solar energy company allegedly submitted phony documents to the state after missing the deadline to qualify for the now defunct Oregon Business Energy Tax Credit program.

A $60,000 study commissioned by the state found that manufacturing the solar panels in Oregon would have generated $10 million in local wages.

The state tax credits – the most generous in the nation – were used to pay for nearly half the cost of the multi-campus solar project. Under Oregon’s False Claims Act, the state can force contractors who submit false information to return the money.

A spokesman for the Oregon University System (OUS) previously responded to CNSNews.com’s inquiries into whether university officials were aware that the solar panels used for the state’s signature solar energy project were made by prisoners, stating that they were “not engaged” in the management of the $26.6 million solar project.

But the use of prison labor by the nation’s largest solar company has raised eyebrows, especially since SolarCity received more than $1 billion in taxpayer subsidies over the past 15 years, according to a new report by Good Jobs First, a Washington, D.C.-based non-profit, entitled Uncle Sam’s Favorite Corporations.

SolarCity collected $755,634,230 in state and local subsidies over the past 15 years, the report stated. In addition, it also collected another $325,999,783 in federal grants and allocated tax credits since 2000 – putting it # 36 on the largest subsidy recipient list just behind corporate giant Lockheed Martin.

SolarCity, which occupies the same San Mateo, California headquarters formerly used by Solyndra, did not respond to numerous phone and email requests for comment by CNSNews.com.

Related: Oregon U: ‘Not Engaged’ in SolarCity’s Use of Prison-Made Solar Panels for Green Campus Project

Related: Despite $39B in Annual Gov’t. Subsidies, Solar Produced 0.5% of Electricity in US