Utah gave $40M in tax breaks to a solar company accused of fraud

May 7, 2024

A newly formed company that claimed it could bring wide-scale solar energy to residents received a $40 million tax break from Utah – then was accused of defrauding customers and failing to deliver promised products and services.
From the article:

A June 2021 Forbes article heralded the formation of Lumio as an answer to the climate crisis. Noting that Lumio resulted from the merger of five companies—Atlantic Key Energy, DECA, Lift Energy, Our World Energy and Smart Energy Today—the article described a “decentralized service platform” to shake up the solar industry, “like Uber did for the car ride.”

As a result, the company in its first month was named “a Top Five U.S. solar provider with a 12-month run rate of more than $1 billion in gross sales, over 3,500 employees covering 37 states and strategic partnerships rare in a new company.”

By this account, Lumio hit the solar market like a supernova, exploding onto the scene with immediate and spectacular success. But the company was not even a registered business entity in Utah until the fall of 2021.

This registration came shortly after the Governor’s Office of Economic Opportunity (GOEO) board voted in September 2021 to award a $40 million tax incentive to Lumio in exchange for the company pledging to stay in Utah and bring 3,697 new high-paying jobs over the next 20 years…

While Lumio is a new company, its principal, Greg Butterfield, was previously the CEO of Utah’s Vivint Solar but left that position in May 2016.

During Butterfield’s tenure, however, Vivint Solar emerged as a major focus of a report by the nonprofit advocates at the Campaign for Accountability. They reviewed consumer complaints related to solar panel installation filed with the Federal Trade Commission between 2012 and 2016 and found more than half were about Vivint Solar and one other company.

The report noted Vivint Solar’s history of legal battles. In 2018, the New Mexico attorney general sued the company for allegedly deceiving homeowners into being locked into long and expensive contracts.

The company denied the allegations but paid the state roughly $2 million and agreed to change its marketing practices and provide ethics training to employees. In 2019, the company also reached a settlement with the state of New Jersey over similar allegations…

Jacob Whiton is a research analyst at Good Jobs First, a national organization promoting accountability in publicly funded economic development programs. He says not awarding incentives to companies with bad consumer track records should be a “no brainer”—but it’s not.

“It seems like common sense—right?—that companies which have received regular violations should not be receiving subsidies for private investment,” he said. “And yet, you would be shocked how little we see that reflected in the sort of statutory requirements governing these programs.”

While many states bar companies with legal or regulatory actions against them from receiving state contracts, few prohibit tax incentives for the same reason.

Read the full story at the Utah Investigative Journalism Project.