Sunny Nevada is killing the solar industry in the state with new net-metering rules
To drive out solar power companies out of sunny Nevada, you have to do something pretty bad. This is exactly what happened while most of us weren't paying attention, enjoying the holidays (or stressing out, depending...). The Nevada Public Utility Commission (PUC) changed its rules surrounding net metering and increased fees charged to the owners of solar systems (who said the sun was free?):
"The base service charge is rising from $12.75 to $17.90 per month [a 40% increase] for southern Nevada solar customers and from $15.25 to $21.09 [a 38.2% increase] for northern Nevada customers. The changes also reduce the amount the utility pays to buy power back from rooftop solar panels, from 11 cents a kilowatt hour to 9 cents [an 18.2% decrease] in southern Nevada and from 12 cents to 10.5 cents [a 12.5% decrease] in the north. The service charge will rise and the reimbursement will drop every year until 2020." (source)
This might not seem like much until you do the math and realize that these changes would negate the savings on many solar customers' utility bills. For example, if you are thinking about getting a solar system that would save you $40/month, you might not go solar if the new rules reduce net-metering returns and increase fees by more than $40/month. Some people might still do it just to have clean power, but a lot of people just won't...
This is a big enough deal for solar installers that SolarCity has already said that it would halt operations in Nevada because of it, and Vivint Solar, another large solar installer, is considering doing the same.
"This is a very difficult decision, but Gov. Sandoval and his PUC leave us no choice," Lyndon Rive, SolarCity's chief executive, said in a statement. "The people of Nevada have consistently chosen solar, but yesterday their state government decided to end customer choice, damage the state's economy and jeopardize thousands of jobs." (SolarCity says that it has created 2,000 jobs in the state since 2013.)
The accusation is that this new plan is designed to protect the existing power utility from the new solar entrants, which are growing rapidly and threaten profits.
There is some hope, though. The regulators are meeting on Thursday this week to consider pausing the rate hike, which was supposed to take effect on January 1st, 2016.
Several entities requested the rates be postponed, including the Bureau of Consumer Protection within the Nevada Attorney General's Office. Consumer advocate Eric Witkoski said existing customers weren't properly warned that they would be subject to the new rates, instead of being "grandfathered" in to the more favorable ones.
He also raised concerns that the rate change could run afoul of the contracts clause in the U.S. Constitution, because the changes are dramatic enough that they could disrupt private contracts homeowners have with rooftop solar companies. (source)
Ideally, these changes would be scrapped and a more solar-friendly strategy would be devise in a more transparent way. Someday incentives for solar power will have to be removed, but this is too soon, and this isn't the way to do it. The social and environmental benefits of our civilization transitioning to clean energy should be taken into account when taking these types of decisions. We can't just change things around looking at short term impacts, especially after we spend decades giving direct and indirect help to the fossil fuel industry.