The financial future has grown cloudy for SolarCity, the nation’s top residential solar company.

Already, the company is grappling with massive debt and two federal investigations into its business dealings. But its biggest problem may be dwindling subsidies.’s Tori Richards reports:

Most of SolarCity’s business involves leasing rooftop systems to homeowners at a cost that escalates each year on a 20-year contract. As the system owner, SolarCity reaps the federal 30-percent tax rebate, an amount that will disappear in 2017. Rebates will decrease to 10 percent for commercial customers, a group not currently a large portion of SolarCity’s customer base.

Likewise, President Obama’s stimulus fund has been drying up, doling out a fraction of the billions it has paid for renewable energy since 2009.  In 2013 SolarCity received $127.4 million in federal grants. And last year? Just $342,000, according to its 2014 SEC report.

The SEC report also shows that SolarCity recorded a net loss of $375 million on a total revenue of $176 million.

Subsidies have long been the foundation of the solar industry’s business model. In FY 2013 alone, the latest on record, the federal government provided solar companies with $5.3 billion in public support; as we’ve noted before, federal subsidies for solar increased even as the federal government cut back on its total support of energy companies.

And that’s not even counting the enormous support SolarCity has received at a state and local level. “SolarCity has been given a virtually free solar panel factory courtesy of New York taxpayers – rent is $1 a year,” Richards notes. SolarCity has enjoyed billions in state-level rebates, also benefitting from preferential metering policies in the majority of states.

 Even so, SolarCity has limped along. Though its energy production capacity has grown significantly, it continues to lag behind in its goal of signing 1 million customers by 2018.  True, SolarCity turned its first profit ever last November—but even that was the result of both New York State help and some interesting accounting.

Government support has long cushioned SolarCity from rough economic reality. With the levels of public support dipping, the company will be exposed, just as any other business, to the whims of the market. Such is the risk of any company that relies on subsidies instead of actual consumer demand.