Tom Steyer Listed as Manager of Green Energy Investment Firm

Corporate documents reveal previously unknown ties to renewable energy financiers

Tom Steyer
Tom Steyer / AP
July 8, 2015

Billionaire Democratic donor Tom Steyer is listed as a "manager" of a green energy company that finances solar and energy efficiency projects, public records show.

Documents filed with secretaries of state in California and Texas name Steyer as a "manager" of Kilowatt Financial, LLC. Nevada records say he is a "managing member." In Massachusetts, he is listed as a manager of Kilowatt Systems, LLC.

The documents reveal that Steyer is more involved than previously known in private green energy projects that could benefit financially from policies he has advanced as one of the country’s most active and deep-pocketed environmentalists.

Kilowatt Financial is headquartered in Minnesota, incorporated in Delaware, and finances renewable energy and energy efficiency products through a host of subsidiaries operating around the country.

"We were created to help [solar and energy efficiency] industry professionals make more sales," Kilowatt says on its website. "More financing options and more customers equal more profit. It’s that simple."

The company offers financing through solar loans, solar leases, and power purchase agreements. Industry publication GreenTech Media reported last year that it had provided more than $400 million in financing for green energy projects since its inception in 2011.

Kilowatt is involved in markets created, sustained, and subsidized by policies that Steyer and his political operation have promoted through political and policy advocacy.

Among Kilowatt’s core business activities is the financing of rooftop solar panel installation. "Kilowatt’s financial expertise is changing the rooftop solar and energy efficiency industries," its website declares.

Profit potential for companies financing such projects goes beyond the rates they charge for financing. Many rooftop solar installers pocket a federal tax credit for renewable energy investment. Some then sell those credits to tax equity investors.

The investment tax credit, as it’s known, is set to expire at the end of 2016. NextGen Climate Action, Steyer’s super PAC, is pushing hard for its extension, criticizing "Republican job killers" that oppose the measure.

Steyer's political team is also working on a California ballot measure that would levy an "extraction tax" on the state’s sizable oil industry. On its website, NextGen proposes using the resulting revenue to fund additional "tax credits for solar installations," among other measures.

The ballot measure will not be Steyer’s first foray into California referenda. He helped promote Proposition 39 in 2012, which used a tax hike to pay for incentives for rooftop solar installations, and was a leading opponent of Proposition 23 in 2010, which would have rolled back a California law that has also subsidized such projects.

Many of the groups supported by Steyer highlight what they say is the destructive nature of fossil fuels, coal energy in particular. Coal provides a cheap if carbon-heavy source of electricity, and raising the cost of coal-fired power makes alternatives—such as solar—more competitive.

William Yeatman, a senior fellow at the Competitive Enterprise Institute, described Steyer’s political work as integral to a business model focused on making green energy more financially appealing.

"For themselves, they seek taxpayer subsidies and production mandates," he said of politically active green energy investors. "And for their competitors in the business of conventional energy production, they lobby for restrictions on both the supply side (i.e., going after mining or drilling) and the demand side (i.e., shutting down power plants)."

Legal services company LegalZoom defines an LLC manager as "a person chosen by the members to manage the LLC and is similar to a director of a corporation. A manager can also be a member."

It defines a managing member, Steyer’s title on previous Nevada incorporation documents, as "an individual who holds an ownership interest in the company, participates in its day-to day management and has authority to contract on behalf of the company."

All four states in which Steyer is listed on Kilowatt incorporation documents generally adhere to those definitions.

Neither Kilowatt nor NextGen responded to requests for comment about Steyer’s involvement in the companies.

In addition to his role at Kilowatt, Steyer is a manager at subsidiary Kilowatt Systems, LLC, according to documents filed with the Massachusetts secretary of state. The company exists "to own, purchase, develop, maintain, operate, lease, manage, and sell photovoltaic solar systems," the filings say.

Also listed on those documents and others filed with various secretaries of state are two employees of venture capital giant Kleiner Perkins Caufield Byers, which has provided Kilowatt with more than $120 million in equity financing.

Kleiner Perkins is one of the nation’s top green energy investment firms, and its executives have poured millions of dollars into the campaigns of leading Democratic officials who have advanced policies that have benefitted its portfolio companies.

Former vice president Al Gore is a Kleiner Perkins partner. He has been criticized for investing in green energy companies while aggressively pushing for restrictions on carbon-based energy and subsidies for companies and technologies in which he has a financial stake.

Steyer has also faced scrutiny for the overlap between his political and financial interests. One of his nonprofit groups, the TomKat Charitable Trust, is a limited partner in a private equity firm that invests in green energy companies, as reported by the Washington Free Beacon.

Steyer has denied that he has any financial stake in the outcomes of elections or policy fights in which he is involved.

However, he has also been bullish on green energy’s profit potential. "We have a chance to lead in the world in the way that we generate and use energy," he said in 2012. "It’s a big business opportunity. It’s a chance to make a lot of money."

Update 8:29 P.M. July 8, 2015"Tom Steyer stepped down from the board of Kilowatt Financial last year, and has asked Kilowatt to update its records accordingly," said Suzanne Henkels, deputy press secretary for NextGen Climate. "The TomKat Charitable Trust is a limited partner in Eagle Cliff Partners, which invested in Kilowatt — a fact publicly listed on Eagle Cliff’s website. Tom Steyer and his wife, Kat, have signed the Giving Pledge to donate the vast majority of their wealth to charitable purposes. Additionally, any investments in clean energy are held by trusts with all proceeds directed to charitable organizations."