Whole Foods Market Inc. has agreed with solar panel producers SolarCity Corp. and NRG Energy to stick rooftop solar panel systems on several of the company’s organic grocery stores, potentially giving both of solar companies’ fledgling stock a shot in the arm.
The organic grocer plans on placing 100 more solar panels to its 434 stores. It had previously used solar panels on 25 of its stores.
Whole Foods, which was co-founded by self-proclaimed free market capitalist John Mackey, will score a discount on solar power purchased from SolarCity.
While the financial terms connected to the agreement have not been disclosed, SolarCity’s customers have capitalized on taxpayer support in the past.
The solar power industry — and SolarCity in particular — uses, on a regular basis, a 30 percent Investment Tax Credit (or ITC), allowing residential customers as well as solar companies the ability to get taxpayer money for buying lithium energy batteries for their solar arrays.
The ITC was pegged to end Dec. 31, but Congress came to its rescue, extending it at the last moment to lengthen the tax credit. The extension potentially gives solar companies such as SolarCity and NRG Energy billions in tax credits, free taxpayer money.
The IRS later extended the ITC to include rechargeable batteries.
The company, which was co-founded by tech billionaire Elon Musk, uses an exotic policy called “net metering” to force public utility commissions to pay solar panel customers for the excess electricity their panels inject into the grid.
The policy helps defray some of the cost associated with panel upkeep, to include installation.
SolarCity is so dependent on the subsidy, in fact, that it carried out on a threat to lay off 550 employees in Nevada after the state changed its so-called net metering rules.
The service charge for panels increased in Nevada by about 40 percent from $12.75 to $17.90 per month in the southern section of the state, and 38 percent for those in the northern section of Nevada as a result of the rule change.
Musk, along with SolarCity’s other executives, pushed back hard against the state’s decision.
“I contacted Governor Sandoval multiple times after the ruling because I am convinced that he and the PUC didn’t fully understand the consequences of this decision, not only on the thousands of local jobs distributed solar has created, but on the 17,000 Nevadans that installed solar with the state’s encouragement,” SolarCity CEO Lyndon Rive told a reporter with StreetInsider.com in January.
The company cited Nevada’s move to slash the subsidies to Musk’s solar panel project as the reason why SolarCity’s stock tumbled in the market.
SolarCity’s shares fell 51% this year, but ticked upward 3.7% to $25.08 on Tuesday shortly after the Whole Foods deal was finalized.
Mackey, for his part, has championed free market capitalism and been a leading figure in the libertarian movement for years. He’s even criticized the private sector for using government connections to get ahead in markets.
“Governments must constantly guard against their tendency to overreach and grow beyond a level that is productive or healthy,” Mackey said in a 2013 Forbes Interview about government’s role in the economy.
He went on to criticize businesses that sidle up next to government bureaucrats for the purpose of defending their market share.
“The greatest danger is when governments fail to act in the public interest and start to serve the narrow self-serving agendas of politically connected elites, including businesses,” he added.
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