Nevada Guts Payments for Rooftop Solar, Installers Call It Quits

Chalk one point for Nevada’s utility monopoly; zero for rooftop solar. In a strange decision that is forcing solar businesses in the sunny state of Nevada to close their doors, the Public Utilities Commission of Nevada voted unanimously earlier this month to slash net-metering payments to homeowners who have invested heavily in rooftop solar.

The commission’s decision, which affects the rebates that homeowners receive for solar-generated energy, comes after months of warnings by solar advocates that the state’s net-metering “cap” (the 3 percent maximum payout for solar reimbursement across the state) was too low. When the cap was finally reached, the commission responded by quickly extending payments, prompting a face-off between rooftop solar advocates and supporters of the state's more conservative utility monopoly, which lobbied hard for a change to the rules.

And they won. After the legislature passed a bill that effectively gave the utility commission the power to make changes, solar customers found the returns on their solar investments suddenly slashed. In a record 3-0 vote, the commission voted not only to raise user fees, but also to amend the amount that customers would receive from utility companies. It also made the decision retroactive, so users saw their return on solar drop literally overnight.

The impact on the solar industry has been decisive. The state’s three largest solar installers have said they are pulling the plug in Nevada, resulting in a potential loss of some 6,000 jobs and leaving the Nevada solar industry in flux.

Net metering has been around in Nevada since the late 1990s, when the state established rules governing solar electricity reimbursements. The rules have been adjusted several times over the years, but the solar industry has remained robust -- until now. In fact, until the latest decision, Nevada figured among the top states for consumers interested in solar power. That translated to 974 megawatts of solar energy in 2014, enough to power 150,000 homes. It has also realized more than $500 million in sales since solar was introduced commercially in the state.

With more than 100 solar companies in the state, Nevada was due to exceed its third-rank standing in solar power.

"Just weeks after Congress voted with bipartisan support to extend the federal tax credit for solar, Gov. Sandoval's Commission is moving the state backwards," notes SolarCity, one of Nevada's strongest solar companies. "The governor's and commission's support for a de facto ban on rooftop solar defies public opinion, including the opinion of the members of his own party. According to a recent poll by Moore Information, 73 percent of registered Nevada Republicans support the state's previous rooftop solar rules."

Local utility NVEnergy, which supported the new rules, defended the change -- calling it an appropriate decision. "This approach is fair because it recognizes that the energy and suite of energy services provided by NV Energy to net-metering customers differs from the intermittent excess energy delivered to NV Energy's system."

Time may tell. For fairness to prevail, companies will need to be willing to provide services in state, and latest indications suggest that not all are convinced the commission's dramatic change-of-heart will support that robust growth in Nevada's rooftop solar market.

Images: BlackRockSolar