Stimulus funds used to buy solar panels from China?

IG report: Roof of federal building cost $1.8M

This is a rush transcript from "Your World," September 19, 2012. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST OF "YOUR WORLD": And talk about a solar pain in the you know what.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: I will not cede the wind or solar or battery industry to China.

Nobody is playing for second place.

To make sure countries like China aren't giving their solar companies an unfair advantage over ours.

So that we can be competitive with what China';s doing.

I don't want to see wind turbines and solar panels and high-tech batteries made in other countries by other workers. I want to make them here.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

CAVUTO: Maybe not, because after all of that, this, word that solar panels made in China were installed on the roof of a federal building in Illinois.

And you paid for it, because $1.8 million in stimulus dough, your dough, was used to buy them. The inspector general for the GSA calling it a violation of the president's stimulus plan and Buy America Act, but the agency that bought them is claiming it did nothing wrong because the panels were included in a large order and not a contract item.

Either way, Marc Morano says taxpayers are the ones getting fleeced.

We should point out, Marc, before I get to you, that the Federal Acquisition Service issued a memo, saying -- we had hoped to get someone on this from them, but to little avail -- but we do have the memo -- that "the solar panels were a component of a larger system and the panels themselves are not a contract item."

I argue we can debate the details all we want, China's a beneficiary, and we got into this because we didn't want China being a beneficiary.

MARC MORANO, CLIMATEDEPOT.COM FOUNDER: But the inspector general of the GSA, their own report, actually said this should not have happened.

The contractor said, is this OK to buy these solar panels from China? It was expressively forbidden as part of the stimulus. And here's the irony here. Not only are we helping China, but the reason given for Solyndra's failure, the reason given for Abound Solar failure, for all these other solar failures is that China undercut our market and that there was a glut of Chinese products and they were dumping tens of billions of dollars into all these companies trying to prop them up.

And China had a bigger spigot to spend. And now we ended up putting protective tariffs on solar panels from China, but we still bought them from China, and so in order to prevent China from selling them in the U.S.

So it's a classic government boondoggle. Here we are. Our solar companies they allege are failing because of China -- Chinese imports, and we're actually buying them, against what the inspector general says is against the rules laid out by the law.

CAVUTO: And it was brought to light by the contractors themselves. They said, is this OK? We're getting this from China.

Leaving that aside, the argument for the government getting involved in green energy and the rest is that China underwrote it. They're going to have a big lead in batteries and panels and everything else if we do not get off the stick fast.

So, here we are doing something presumably meant to sort of take the oomph out of China and be a threat to China, and we've made China a bigger threat and a richer one at that.

MORANO: We have.

In fact, if you look at where China's going, so many of the environmental left here in the country -- even people -- The New York Times will say, first of all, they love China's one-party rule, because they can impose what's better for the people without the messiness of democracy.

So, China is looked up at as a model by environmentalism because of all the investments they're putting in renewables. The problem is they're also putting in massive amounts of coal plants.

So, in a way, is China serious about renewables or not? The bottom line is renewables aren't going to power the United States or China. There's a report out by the international agency -- the EIA last month showing that $250 billion was spent globally on these renewable energy, including solar panels like this, which exceeds all the profits of the major oil companies, including Exxon, combined.

And this money is going to produce less than 3 percent of energy worldwide.

CAVUTO: Well, I think it goes back to -- whether it's a waste of money or not -- and I tend to agree with you -- so far, the history isn't really encouraging.

But the irony of all of this is that the country we were trying to beat is the country we're enriching, albeit with one project. I suspect there might be more, but it is a damning irony.

MORANO: There might be more.

CAVUTO: A damning irony.

Marc, thank you very, very much.

MORANO: Thank you, Neil.

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