Is this sunny state trying to kill solar power?

This is always a very interesting economic argument.  Two camps:  One feel renewables are over supported by government, and want to see many of the incentives dropped;  the other feels as though it is simply utility companies flexing their muscle with regulators and refusing to give up market share.

It is a complex issue as the true cost of fossil fuel, including government support of their R & D and accelerated depreciation bonuses, along with the health cost of carbon should be reflected in the pricing.  We think renewables are a good buy for the consumers and for communities, and we'd continue to push their expansion in every state.

Is this sunny state trying to kill solar power?

By Claudia Assis

Nevada has turned into a sunny battleground for the future of solar in the U.S., with regulators there moving to make solar power less attractive to homeowners and businesses and pitching utilities against solar-power companies.

SunRun Inc.  on Thursday said it was pulling out of Nevada, which the company said will result in “hundreds” of job losses. A day earlier, SolarCity Corp.  announced the same move, saying that about 550 jobs would be lost.

The Solar Energy Industries Association estimates that nearly 6,000 people in Nevada are employed in the solar industry. Besides affecting jobs, the new rules cut down on the savings that many homeowners count on from going solar.

“Three [public-utility] commissioners have decided that 18,000 Nevadans cannot get the same rates they signed up for,” Lisa Kershaw, Las Vegas resident

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Just before Christmas, Nevada utility regulators approved higher fees and lower credits for solar-powered homes and businesses, although state regulators may review that decision at a meeting later this month.

“Three [public-utility] commissioners have decided that 18,000 Nevadans cannot get the same rates they signed up for,” said Lisa Kershaw, a Las Vegas resident, who had a leased rooftop solar array connected in June and saw her July bill dwindle to about $120 from about $270 in previous years.

Kershaw doesn’t know yet how much more she’d have to pay if the new rules remain in place.

“I haven’t done that math yet, I was just so outraged,” she said. Las Vegas residents can count on having a sunny day 85% of the time, according to the National Weather Service.

Nevada “will continue to support the renewable energy industry” and assist laid-off workers, Gov. Brian Sandoval said in a statement Wednesday after SolarCity’s announcement. 

A little-understood billing mechanism called net metering is at the heart of the Nevada controversy.

Net metering means that residential and commercial solar customers are billed for their “net” energy consumption. They are allowed to send back to the grid the electricity their solar arrays generate when the supply outstrips demand -- such as during daytime hours, in the case of a home -- and take power from the grid when demand may exceed the system’s output -- such as at nighttime when all the lights are on, or during a cloudy spell.

It’s a system usually based on power-bill credits. How that quid-pro-quo works, varies from state to state and from utility to utility. In Nevada, the utility regulators have decided to pay lower, wholesale prices for that surplus power, not the higher, retail prices they had been paying.

California utility regulators evaluated a similar proposal, but decided against major changes. In Hawaii, regulators approved lower net metering rates, but not higher fees for the most part. Arizona and Wisconsin have imposed higher monthly surcharges for solar customers.

More worrying in Nevada’s case, however, is that regulators made no provision to grandfather in existing customers, said Shayle Kann, a senior vice president at GTM Research, a green-energy consulting firm.

Solar is by nature a long-term investment, since projects last 20 to 30 years or more, and prospective customers want “some degree of certainty regarding the regime under which their solar project will function,” Kann said. That’s crucial to ensure customers aren’t taken by surprise and that financing remains available for new solar projects, he said.

It’s hard to say what the implications are for the broader U.S. solar market, Kann said. Each state has its own web of regulations, but the decision “certainly puts Nevada on the map as the major solar state with the most drastic solar compensation revision, and you can imagine utilities and regulators in other states at least taking notice,” Kann said.

Utilities argue that they must still work and spend money on the infrastructure—workers, grid upkeep, transmission lines and power plants—that are needed for steady, reliable power supply to all, yet they are starting to see less revenue as more customers go solar.

Nevada legislators directed the state’s public-utilities commission “to identify and eliminate any unreasonable shifts in costs from net metering customers to other customers,” the Nevada PUC said in a statement before their decision. The new rules would be implemented over four years.