In Netherlands, Defrauding Solar Panel Program Is ‘Child’s Play’

Journalists in the Netherlands have exposed how simple it is to defraud the Dutch government’s subsidy scheme for solar panels. A person submits an official form saying they will install solar panels, and within two weeks a subsidy is deposited into their bank account. There is no mechanism to check if the person actually purchased or installed solar panels in their home. The journalists called it “child’s play.” The average subsidy paid out was around $750.

The Dutch government agency that administers the subsidies declined to send a spokesman to appear on RTL News, the show that aired the report. The agency did, however, send an email which stated that the process was designed to be simple to encourage as many Dutch people as possible to install solar panels. The agency said it had conducted spot checks on 3 percent of subsidy applicants and did not find any instances of fraud.

Dr. Hans van den Heuvel, a professor of ethics at the Free University of Amsterdam, appeared on the news show to say there is no doubt in his mind that the solar panel subsidies have been defrauded. “When there is an opportunity for fraud, some people will make use of it. That happens. That’s reality. We shouldn’t moralize too much about it,” he said.

Last year, the Dutch government announced it was establishing a $68 million fund to subsidize individuals purchasing solar panels for their houses. The scheme proved wildly popular. At least 83,000 Dutch people have been granted the subsidy. As a result, only $8 million is left in the fund today.

The revelations about solar panels come in the wake of a much bigger fraud scandal that erupted in the Netherlands in May. Journalists exposed how large numbers of non-Dutch citizens, mostly Bulgarians, were collecting social subsidies for things like rent and childcare. They moved to the Netherlands for short periods during which they opened bank accounts and applied for subsidies. They returned to Bulgaria and continued collecting the subsidies, which were automatically deposited in their bank accounts. This scam was largely organized by Bulgarian criminal gangs who recruited poor rural residents to move to the Netherlands. When these people returned to Bulgaria, the gangs would collect a portion of their subsidy payments.

Dutch TV news program Brandpunt invited the Deputy Finance Minister Frans Weekers onto their show and filmed as they showed him online message boards on which Bulgarian criminals boasted about how much money they had defrauded from the Dutch government. The exact amount defrauded this way is unknown, but it is believed to be over $125 million. Responding to the outcry, the government also argued that it had deliberately made the process of collecting subsidies easy to ensure that those who needed it could get access.

Like many EU countries, the Netherlands prides itself on its commitment to green energy, particularly solar energy. However, most EU countries have focused on subsidizing the energy produced, rather than the purchase and installation of the solar panels. Germany leads the world in solar energy production. In 2004, the German government introduced the “feed-in tariff,” a very generous, fixed rate paid to owners of solar panels for energy produced. Critics argue that the feed-in tariffs are unsustainably high, but at least the levels of fraud seem to be fairly low.

In the Netherlands, it remains to be seen if RTL News’ revelations will lead to an overhaul of solar energy subsidies. MP Kees Verhoeven, a member of opposition party D66, has vowed to ask for official clarification about how the $68 million fund was spent. “If it appears that there has been fraud then future regulations for solar panels have to be arranged better,” he told RTL News.

Due to its popularity, the solar panel fund will run out of money in the next few months. The Dutch government is unlikely to cease subsidizing solar energy altogether. But policymakers are likely to hesitate before making the money so easy to access.

Emma Elliot Freire is an American writer living in England. Image of solar-powered vehicle courtesy of Big Stock Photo.