SolarCity's skyrocketing stock dependent on government tax giveaways

These are boom times for SolarCity, the solar energy company backed by libertarian-leaning entrepreneur Elon Musk.

The company's stock, initially offered at $8 a share in December 2012, is trading around $82 a share early Monday. And in a shareholder's meeting last week, company officials said they're bullish on the company's future.

Buried in SolarCity documents is the secret to that success. Musk, the billionaire who founded PayPal and is chief executive officer and product architect of electric carmaker Tesla, has built SolarCity on government giveaways -- subsidies that will decrease substantially in the next two years.

"If, for any reason, we are unable to finance solar energy systems through tax-advantaged structures ... we may no longer be able to provide solar energy systems to new customers on an economically viable basis," SolarCity's third quarter 2013 reportsaid. "This would have a material adverse effect on our business, financial condition and results of operations."

That makes SolarCity no different from countless other companies that have leveraged taxpayer cash for private profit -- all part of President Barack Obama's goal of a green-energy future.

Critics say it's an abuse of taxpayer dollars -- and a risky investment.

"I could see no rational reason why anybody would put money behind this company," said William Yeatman, a senior fellow with the Competitive Enterprise Institute, a free-market think tank in Washington, D.C. "They have been the beneficiary of $11 million from the stimulus and $411 million from subsidies. It's a crass market decision based on political considerations. Anyone taking this stock is making a bet that the federal government will not turn off these subsidies.

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