Is the SolarCity Gigafactory at risk? State funding on hold as lobbying connections investigated

Legislators for the State of New York failed to move forward on a vote to deliver $485 million in funding to build out SolarCity’s Gigafactory in Buffalo. According to BuffaloNews, even though the project has been approved by the State Legislature as part of the much-heralded Buffalo Billion program, a three-person team has decided to not vote on the release of the next round of funding due to, “red flags were raised in the Legislature when the control board’s internal agenda document included vague language about future, undetermined beneficiaries.”

If you’re considering solar, get a quote from multiple contractors at understandsolar.com. If you want feedback on the quote you get – either email me at john @ 9to5mac dot com or send a tweet.

This vote is likely a result of an investigation opened by the U.S. Attorney for the Southern District in September of 2015, and commented on by the Attorney General of New York:

“The U.S. Attorney for the Southern District has an ongoing investigation focused in Upstate New York (commonly referred to as the Buffalo Billion and Nano investigation). This investigation has recently raised questions of improper lobbying and undisclosed conflicts of interest by some individuals which may have deceived state employees involved in the respective programs and may have defrauded the state.”

According to Newsday,

Bharara’s office (the U.S. Attorney for the Southern District of New York) has been looking into how construction firm LPCiminelli was selected to build the SolarCity plant. LPCiminelli employed politically connected lobbyist Todd Howe as a consultant. Cuomo last month cut off all state contacts with Howe and his former firm, Whiteman Osterman & Hanna.

Kady Cooper, a spokesperson for SolarCity, quoted by Newsday, said SolarCity “is not the subject or focus of the investigation, as we were not involved in the vendor selection or contracting process.”

As part of this project SolarCity has milestone agreements of 5,000 employees (recently increased from 3,000) in the state within 10 years. If it fails to meet employment milestones, SolarCity must pay the state upward of $41.2 million a year. Recent headlines suggest the exact mixture of jobs is evolving from factory line workers toward management and sales positions.

The factory itself is considered to be a technological marvel by the MIT Technology Review, showcased in Ten Breakthrough Technologies of 2016. The above image of the factory floor from the MIT article shows a clear progression in construction.

As reported here in January of this year, the exterior of the facility has been seemingly completed and work was going on inside of the structure readying for the arrival of the solar module manufacturing hardware. According to an earlier report by the Buffalo News the Gigafactory has already delayed from moving into full production by three to six months due to slower than expected equipment procurement:

“Some of the equipment has longer lead times than we originally expected,” Rive said during a conference call to discuss the company’s earnings. “So that equipment is going to be arriving around the second quarter or third quarter of next year.”

SolarCity’s own Gigafactory” will produce its proprietary Silevo ~350-watt solar panels, which are expected to achieve a record-breaking 22% efficiency.  Production already started last year at the company’s 100 MW pilot facility in Fremont, California, but they plan on transferring the production to the 1 GW factory in Buffalo. Its gigawatt production output is the reason why it is referred to as a “Gigafactory” like Tesla’s, SolarCity’s sister company, battery factory in Nevada.

Senior Vice President of Operations Steve James says SolarCity will use the most advanced solar manufacturing equipment designed specifically for the plant’s needs:

“One of the reasons we can do this in North America as opposed to Asia is that we can be cost-competitive because of our equipment knowledge and we can design the plant in such a way that it can be very, very efficient,”