Widespread misuse of solar panel funds

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Widespread misuse of solar panel funds

Prime Minister Han Duck-soo is said to have been appalled by the leak in tax spending on solar panels under the previous Moon Jae-in administration. A sample investigation by the Office of Government Policy Coordination under the prime minister on 12 locations that administered 2.1 trillion won ($1.5 billion) out of the 12 trillion won worth electricity industry infrastructure funding projects pursued by 226 local governments over the past five years discovered misappropriation of 261.6 billion won.

The finding suggests 12 percent of the funding could have been ill-spent. Of the 2,267 dubious cases, 1,406 projects worth 184.7 billion won were related to solar panels and other renewable energy.

The misdeeds were similar in pattern. False tax invoices were issued to inflate construction costs, documents were falsified to draw loans illegally, and contracts were made with unlicensed companies.

According to a study by the Korea Energy Agency over the funding to solar panel businesses over the past three years, 17 percent of the businesses were made with unlicensed companies or broke subcontractor regulations. Of 395 solar panel businesses financed by four local governments, 25 percent, or 99 business locations, used false tax invoices and drew loans 14.1 billion won illicitly.

Some solar panel business operators were able to run business without any of their own money by borrowing money from financial institutions through inflated documents and drawing government subsidy.

The findings suggest what the rest of 9.9 trillion won projects under the other 214 local governments will look like. The prime minister ordered a nationwide investigation.

Solar panel businesses require a thorough probe. The previous government vowed to raise renewable sourcing for power to 20 percent, led by solar panels. Money was granted on any projects bearing the term solar. A probe by the Board of Audit and Inspection last year discovered favoritism and other irregularities in awarding the designing of solar farms across Saemangeum worth 4.6 trillion won. Mini solar module business led by former Seoul Mayor Park Won-soon also caused controversy.

Renewable energy’s contribution to power generation remains small, increasing to 7.5 percent in 2021 from 4.8 percent in 2016. The sector did not create jobs or new industries, either. Hanwha Group could be the sole large business name left in the market inundated with cheap Chinese panels.

Even if renewable energy is the way to go for carbon control, the procedures must be just. Solar panel projects must be closely studied to make fixes before it is too late.
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