Inside Gavin Newsom’s Solar Scam

California advocates wanted to provide solar panels to 1 million low-income housing residents. After ten years, the state is more than 900,000 short of that goal.

Governor Gavin Newsom has dismissed fossil fuels as “alternative energy,” and wants to power California with, among other things, the sun. Through extensive mandates and extra energy costs for non-solar consumers, the Newsom administration has directed billions to building solar energy capacity.

The centerpiece of this initiative is the Solar on Multifamily Affordable Housing (SOMAH) program. SOMAH began under Governor Jerry Brown, who signed legislation requiring a state commission to apportion up to $100 million a year from California’s cap-and-trade program to pay for the installation of solar panels on apartment buildings in poor areas. Since then, California has devoted nearly $900 million to SOMAH, which the state hoped would create 300 megawatts of power by 2030 and advocates envisioned would create a million solar-using renters.

The results have been disastrous. Since 2015, the program has installed or reserved only 129 megawatts of solar power for approximately 65,600 residents—nowhere close to the target of 1 million “solar renters.”

What happened? First, incompetence. For a decade, businesses and utilities have been forced to buy emissions credits, and while the state has lavished nearly $900 million on SOMAH, administrators designed the program so poorly that they have paid out only $131 million for solar installation.

As the program’s largest contractor admitted in a draft audit, potential customers were turned off by the paperwork, bureaucracy, and red tape. “Initially, we found housing owners excited about the program,” the contractor said, “but after a long and laborious process, they are much less enthusiastic.”

That is an understatement. From the beginning, the SOMAH program has been plagued by delays and cancellations. More than 400 applications have wound up cancelled or withdrawn, or about a third of the total. On average, projects take three and a half years to make it through the program’s gauntlet of paperwork and inspections.

Some projects have been fully installed—only to sit idle for a year or more waiting for permission to begin operating. As a result, more than $700 million of the program’s budget remains unspent. In other words, California can’t even give away a heavily subsidized, and sometimes free, product.

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These failures do not mean, however, that no one is profiting. The managers of the SOMAH program have spent about $60 million on overhead, including salaries, conferences, website development, and more. And, as part of that budget, they have devoted at least $5.5 million to “community-based organizations” (CBOs), most of which are left-wing nonprofits that, in one case, labeled giving solar panels to low-income housing residents a way to fight “racial injustice.”

Under the guise of marketing and outreach, SOMAH paid more than $163,000 to the Asian Pacific Environmental Network (APEN). Vivian Yi Huang, the group’s co-director, extolled the need to “fight against the systems of white supremacy, patriarchy, and capitalism of the extractive economy.” The organization called for Richmond, California to “Defund the Police and Invest in Black Lives” and is a member of the Defund Police Coalition in Oakland, California.

California Environmental Justice Alliance (CEJA) told supporters that it “led in the creation” of SOMAH. Officials awarded it $230,000. The nonprofit wants the “democratization” of “land, labor, and resources” to “reverse the long course of environmental racism, the climate crisis, and colonialism.”

CEJA uses aggressive language to support its apparent goal of banning oil. “What’s at stake is our very survival,” its then-executive director said in 2021. “We must make the transition to 100 percent clean energy and bring all communities along to avoid a devastating climate apartheid.”

The group’s political arm, CEJA Action, endorses candidates and publishes voter guides as it “builds the political power of communities of color to advance environmentally and socially just policies.”

While APEN and CEJA no longer partner with the state, one of the active CBOs, Communities for a Better Environment, is no less radical. Last year, the group demanded the immediate release of everyone who was detained in immigration raids in California. “[T]here is no environmental justice without migrant justice,” the group wrote. “[W]e stand in solidarity with migrant, low-income, queer and trans, and people of color.”

Have these groups delivered results? No.

In 2023, a state-contracted auditor interviewed some CBOs. It found that they were only “responsible for a handful of submitted applications.” This year’s draft audit noted an “inverse relationship” between new applications and spending on these groups.

The other main beneficiary of the SOMAH program is a San Francisco-based corporation called Sunrun Inc., which bills itself as the country’s largest solar provider and has been the contractor for 78 percent of all SOMAH projects. The company has donated hundreds of thousands of dollars to political candidates—including $50,000 to Gavin Newsom’s campaigns—and has employed an army of lobbyists in Sacramento.

Newsom, in turn, has packed his administration with former Sunrun employees. The governor appointed the company’s public policy manager to the California Energy Commission and appointed its former chief policy officer to a regional water quality control board. In recent years, Sunrun representatives have met with government regulators’ offices to discuss SOMAH, including last December, when the company supported efforts to expand the program.

SOMAH and Sunrun did not respond to requests for comment.

California’s infrastructure projects seem always to fall short. SOMAH shows why. Liberal nonprofits help pass sweeping climate laws and receive money from the programs those laws create. In turn, those groups use their expanded influence to push for still more mandates and spending. The laws finance the activists, the activists demand more laws, and the cycle feeds itself—and helps well-connected firms, like Sunrun, collect new contracts.

Meantime, Californians increasingly think solar isn’t worth the headache. As one property owner told auditors, it’s “hard to justify poking a whole bunch of holes in your roof all over the place, just for a small amount of benefit.”

Christopher F. Rufo is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and the author of America’s Cultural Revolution. Austen Hufford is a senior investigative reporter at City Journal.