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For months now, Governor Cuomo’s $750 million Buffalo RiverBend boondoggle has been floundering, mired by federal corruption charges, delayed payments to contractors and a money-losing business model.
This week, the Buffalo News reported that Tesla, the project’s current managing company, is now feeling the pinch from a slowing solar market nationwide.
Based on analysts by GTM Research, the News reported, “After years of fast-paced growth, the residential solar market is expected to shrink for the first time ever in 2017 and grow at “a limited pace” in 2018.”
“State regulators have chipped away at the incentives for residents and businesses to go solar. Falling natural gas prices have made electricity cheaper, reducing the savings from switching to solar.”
Meanwhile New Yorkers get the worst of both worlds as taxpayers finance solar in many different ways, Buffalo’s future is chained to SolarCity, and natural gas is made more expensive by constant attacks from the state.
There has been a string of bad news for the company and taxpayers.
In September 2017, new details came to light regarding the contract between the state and Tesla, including tweaks made in 2015 that give the company “more ways out of the deal if its business goes south. Added to the list of reasons SolarCity could end the contract and walk away: broad language about changes in government policy or regulation – at the local, state, or federal level – that would damage the company’s business.”
So… State officials now have to run energy policy by SolarCity? Aren’t we the ones paying them? Talk about a bad deal.
Before that, in April 2017, Telsa admitted that SolarCity was undergoing financial restructuring, with the company paying off some of its financial bonds, while also converting the bonds held by its three key shareholders into private debt.
The company’s finances have long been precarious.
When Cuomo announced the funding for Solar City in September 2014, the company’s stock was trading at $60.04 per share. That price had plummeted to a low of $19.50 on November 17, 2016, when Tesla’s shareholders voted to take over the company.
For Buffalo area workers, and state taxpayers, this week’s news has to feel like another bad omen for the much-maligned project. Further market downturn can’t bode well for the state-funded RiverBend site, or the unemployed Western New Yorker who are waiting for the much-needed factory jobs.