The Moral Hazard of Subpriming Solar

Hey Steemit - I wrote this blog post a month ago about the ridiculous solar financing scheme going on in Massachusetts. It is kind of ridiculous that post 2008 that the government would want to engage in such obscene lending practices. Enjoy!

By Andrew Nehring

In January 2016, Massachusetts Governor Charlie Baker announced the launch of the $30 million Mass Solar Loan Program (MSLP). MSLP will provide residential solar customers income-based loan support and interest rate buy downs. The program will also include a subprime loan loss reverse scheme to reduce the risk to lenders, opening the door for financial chaos to ensue.

The MSLP, with help from the Department of Energy Resources (DOER), would put the taxpayers on the hook to finance installations of residential rooftop solar panels. In other words, taxpayers are yet again left with the government’s liability of guaranteeing loans to people with subpar credit scores and subsidizing interest rates without regard to the borrower’s income. Essentially, MSLP is following the same policies that created the housing crisis that led to the Great Recession starting in 2008.

It has been a longstanding concern that the Massachusetts solar market is already heavily subsidized through tax credits at the state and federal level. People already have access to solar financing without the need for a new taxpayer-subsidized program. Using more taxpayer dollars to prop up the solar industry in Massachusetts is simply not justified.

It is imperative that solar policies in Massachusetts be updated so that everyone who utilizes the grid is on an even playing field. In so doing, solar and non-solar customers would have access to safer, reliable electricity, at prices that are fair and affordable for all energy consumers.