Seoul City Reports 1 in 5 Veranda-Type Solar Panel Companies Closed...Intentional Closure Suspected Firms Face Criminal Charges

Investigation of Veranda-type Solar Power Providers... 53.6 Billion KRW Supported for 68 Companies
11 Companies Closed Within One Year After Receiving Final Subsidy... Some Changed Ownership to Participate in New Projects
Companies Newly Selected Through Ownership Changes Will Have Selection Canceled and Be Excluded from City Subsidy Projects for 5 Years

[Asia Economy Reporter Lim Cheol-young] Since Seoul began its veranda-type solar panel distribution project in 2014, a total of 68 companies have participated, receiving subsidies amounting to 53.6 billion KRW. Seoul City plans to file criminal charges for fraud against companies suspected of deliberately closing down.

On the 19th, Seoul City announced that a full investigation of veranda-type solar panel distributors revealed that 14 participating companies closed within three years after receiving subsidies. This accounts for one in five companies. Among them, 11 companies shut down within less than a year after receiving the final subsidy, two closed within two years, and one within three years.

The subsidies paid for 26,858 installations by the 14 closed companies totaled 11.8 billion KRW. Among these closed companies, four were cooperatives, which received 7.7 billion KRW (65%) of the subsidies. Notably, three representatives of the closed companies were found to be participating again in Seoul’s veranda-type solar panel project under different corporate names after closure.

Seoul City believes these companies deliberately closed despite being fully aware of their obligation to conduct regular inspections and provide free defect repairs for five years after receiving subsidies. Therefore, the city plans to take strong measures, including criminal prosecution for fraud and obstruction of official duties by deception.

Additionally, Seoul City will seek compensation for damages caused to the city (Seoul Energy Corporation) due to the companies’ failure to fulfill defect repair obligations. Annually, about 26,000 complaints have been filed, and in the past year alone, there were 113 A/S requests related to veranda solar panels installed by closed companies. Regarding misuse of subsidies, criminal charges for embezzlement are underway, and subsidy recovery actions will also be taken. To this end, Seoul City has formed a ‘Legal Response Team’ and will begin legal procedures starting this month.

Seoul City will immediately cancel the selection and contracts of the three companies that changed their names after closure and were newly selected for the project, and will exclude them from participating in any subsidy-related projects conducted by Seoul City for the next five years. To prevent recurrence of similar cases, the city plans to expel fraudulent companies by restricting their participation in bidding and contracts, and will request cooperation to prevent their participation in projects of other local governments.

Furthermore, Seoul City will promote related institutional improvements, including the introduction of a ‘prior approval system’ requiring local government approval for the suspension or closure of solar panel distributors, and will strengthen post-management monitoring of existing distributors.

Seoul City stated, "Due to the deliberate closure of veranda solar panel companies, regular inspections and A/S have not been properly conducted, raising safety concerns. Delays in repairs have increased citizen inconvenience, so we will take thorough follow-up measures."

This content was produced with the assistance of AI translation services.