This is a wild story of how a small town mechanic convinced some of the most sophisticated investors in the world that he had achieved a green energy breakthrough. In reality, it was a Ponzi scheme.
Jeff Carpoff invented the Solar Eclipse. Think of it as a giant battery on a trailer covered in solar panels that offered portable, renewable power. Rather than relying on a polluting diesel generator at construction sites, outdoor events or disaster zones, Carpoff was pitching the Solar Eclipse as a clean alternative. In 2011, he made his first major sale – selling 192 generators for $29 million. Over the next 8 years, sales would top more than $2.5 billion and Carpoff bought a baseball team, more than a dozen houses and more than 150 cars.
There was a bit of a complexity to these sales. He was selling the Solar Eclipses to large corporations that wanted the renewable energy tax credits, but had no use for the generators themselves. So as part of the deal, Carpoff was to then lease the generators out to companies that would use them.
Early days, he tried leasing to Hollywood – big users of portable generators and highly conscious of their environmental impact. Movies including Inception (starring Leonardo DiCaprio), Valentine’s Day (Julia Roberts), Bad Words (Jason Bateman) all used them when shooting on location. But at some of these movie sets, problems started to arise. Power would sometimes suddenly cut out—plunging makeup trailers for Disney’s Alexander and the Terrible, Horrible, No Good, Very Bad Day into darkness, and reportedly leaving Pink’s trailer without air-conditioning at an MTV concert.
So Carpoff started faking the leases instead. Money from new sales was used to fake leases on older sales. And the buyers kept coming.
As the Ponzi scheme grew, Carpoff needed to land bigger deals to cover the fake leases on the previous deals. So he went whale hunting. And there is no bigger whale that Warren Buffett. Geico, an insurance company wholly owned by Buffett’s Berkshire Hathaway, bought almost 8,000 generators for nearly $1.2 billion.
But eventually, as all Ponzi schemes do, it all collapsed. Of the more than 17,000 generators sold from 2011 to 2018, only about 6,000 would be found to exist. This article tells the story of the the wild growth and spectacular fall of Jeff Carpoff and his company DC Solar.
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