Alliance for Innovation and Infrastructure | Nevada Solar Crisis Deepens as Regulators Deny Grandfathering Provision - Alliance for Innovation and Infrastructure
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Nevada Solar Crisis Deepens as Regulators Deny Grandfathering Provision

18 Feb 2016, Posted in All Posts, Analysis, Blog Posts

In a new twist to a long running solar energy battle, the Public Utilities Commission (PUC) of Nevada denied a provision to grandfather approximately 17,000 solar customers into the original utility rate and voted to keep the new metering policy in place. Solar advocates can claim a small victory in that PUC agreed to gradually increase rates over a 12-year period instead of the initial 4-year proposal. Nevada’s solar battle has been brewing for a while and the issue’s profile has increased since catching the attention of numerous prominent political figures, including Presidential candidates Bernie Sanders and Hilary Clinton.

The Issue

In recent years, Nevada actively encouraged and incentivized homeowners to install solar technology by paying them for excess energy they put back in the grid – a system called “net metering” – during peak generation hours. The program worked, and 17,000 homeowners invested in residential solar. Nevada was ranked number one in per capita solar jobs in the country while solar investments in the state rose to more than half a billion dollars in 2015, playing a critical part in Nevada’s economy.

On December 22, 2016 PUC voted to increase fixed charges for customers owning rooftop solar panels from $12.75 to $38.51 per month, while simultaneously decreasing the credit customers earn for excess energy from 11 cents per KwH to 2.6 cents per KwH. After agreeing to review whether to “grandfather” existing customers into the new system, on February 16, 2016 PUC voted against the grandfathering provision, but extended the reduced net metering payment phase-in from 4 to 12 years.

Solar advocates claim rooftop solar owners got a raw deal and that the new policy will take a huge toll on the Nevada solar industry as a whole. SolarCity claims it was already forced to eliminate more than 550 workers as a result of the new policy. Conversely, PUC staff claims that the prior policy was an unfair subsidy for solar customers at the expense of non-solar customers.

Big Picture

The battle in Nevada between rooftop solar customers/supporters and utilities/non-rooftop solar utility customers is a likely a precursor to a wider national debate about how to best encourage increased renewable energy in the market place. Debates over how to bring new energy to market are important, and there is plenty of room for honest disagreement across the spectrum. The only certainty is that the U.S.’s status as one of the world’s largest energy producers provides strong strategic advantage globally – an advantage we should not give up.

Increasing the ability to generate and utilize renewable energy will be critical to future U.S. energy security. Future efforts should focus on increased capacity, more efficient generation, increased commercial storage capabilities, and a smarter grid that takes full advantage of all generation nationwide.

Innovation in the oil and gas industry – the combination of hydraulic fracturing and horizontal drilling – put the U.S. in the driver’s seat of global energy markets. Innovation in the solar industry may very well play a large role in keeping us there. All policy-makers and policy-making bodies should be mindful of solar energy’s role in the economy of the future as these debates unfold.