The solar power industry in Nevada experienced something of a rollercoaster this past December. The federal government, despite fears to the contrary, maintained the federal solar investment tax credit at 30 percent. Yet despite this vote of confidence in solar power from the federal government, the federal tax credit did not solve the regulatory battle over residential rooftop solar in the state of Nevada.
Rooftop solar has been growing rapidly across the US, but particularly in Nevada, due to favorable geographical (lots of sun) and economic (favorable net metering policies) conditions. Nevada stood out as a particularly bright spot in a recent study of rooftop solar installations, with the number of installations quadrupling in Q2 of 2015. A 2014 state report found that net metering would save the state utilities 36 million dollars, and that Nevada solar users were, if anything, under compensated for the energy they returned to the grid.
And yet, Nevada recently made it much more expensive to be a residential rooftop solar power consumer. The Public Utilities Commission (PUC) raised the monthly charge for solar users from $12.75 a month to $17.90/month, with subsequent increases every three years for the next twelve years. The PUC also approved a two cent reduction in net-metering compensation, effectively requiring Nevada solar power users to put more money into the system and get less out of it.
Solar energy companies are fleeing the state. Immediately after the PUC’s decision, Solar City announced that they would completely cease operations in the state of Nevada, and a few weeks later, announced that they would eliminate 550 jobs, although some employees might get transferred to “business-friendly” states. Vivint and Sunrun are also leaving the state.
All of this, happening in a sunny state with incredible potential for solar energy, begs the question: why? A large utility in Arizona, another state with significant potential for solar power, is seeking permission to hike rates and reduce net metering credits. Across the country, utilities are fighting a coordinated battle against solar power.
The utilities are threatened, but going after solar is shortsighted. Instead of choosing to integrate renewable energy into the grid, Nevada Power and other utilities are choosing a path that makes it more cost effective for consumers to generate their own energy or at least fulfill most of their household energy needs through “behind the meter” resources, increasing costs for everyone on the grid. The utility rates are going up, but solar power and battery systems are getting cheaper.
Renewable energy, and rooftop solar in particular, is putting pressure on utilities. It is absolutely true that rooftop solar threatens the current business model, but the energy business is changing. Fighting against innovation isn’t going to help anyone.