The U.S. Treasury Dept. is investigating solar companies, including SolarCity, for potentially abusing a federal stimulus program and jacking up the fair market value of solar systems to increase payouts from tax incentives, Reuter’s reports.

The Treasury’s internal watchdog is looking at how the department managed the program and is searching for “possible misrepresentations” about the fair market value of solar systems that received grants, one large installer of solar panels said in its filing with the U.S. Securities and Exchange Commission.

The investigation is focused on the Section 1603 stimulus program that allowed rooftop solar developers to take renewable energy credits as cash grants.

Read the full story here: Treasury Watchdog Probes Solar Tax Grant Program.

John Farrell, a senior researcher at the Institute for Local Self-Reliance, analyzes the situation in a piece called, Treasury Dept. Fingers SolarCity in Exploration of the Dark Underbelly of Solar Leasing.

He writes that the “investigation of SolarCity on the eve of its initial public offering (IPO) may explain how solar leasing is fleecing federal taxpayers and making U.S. residential solar more expensive than in other countries.”

He focuses on abuses in the solar leasing market, a subject covered in Civil Beat’s story Tuesday, Vivint Dominates Hawaii Solar Market, Sparks Consumer Fears.