Nevada Solar Fee Retroactive, Makes SolarCity Exit State

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Originally published on Solar Love.

Over the past several years, Nevada has become one of the leading US states for new rooftop solar installations, but it looks like things have come to a screeching halt. Rooftop solar fans in Nevada got a huge honking lump of coal in their Christmas stockings just last Tuesday, when the state’s Public Utilities Commission voted to increase the charges — and lower the compensation — for rooftop solar installations.

How The Nevada PUC Stole Christmas

How bad is the hurt? As cited by the news and market research firm Greentech Media, the national solar advocacy organization TASC (The Alliance for Solar Choice) estimates that most rooftop solar customers are looking at a monthly surcharge of $40.00, while the savings from their installation only ranges from $11.00 to $15.00. Quite simply, the math doesn’t give solar fans any good financial reason to install rooftop solar.

TASC’s figure is apparently based on PUC’s own numbers. In a December 21 press release, the agency explained that the new rate structure is intended to require rooftop solar customers to pay their share of fixed costs for the utility NV Energy, which it estimates at $623 annually per residential customer in the southern part of the state and $471 annually in the north.

However the numbers shake out, we’re thinking that the real problem isn’t that the new rate structure will discourage new rooftop solar customers in Nevada.

The real problem is that PUC also intends to apply the new structure retroactively, to existing customers. As far as we can tell, that’s never been done before in any state. If the decision holds up, it will have national implications.

In other words, the PUC decision is not just about the Nevada solar industry. Because of the unusually onerous, backward-grabbing nature of the new rate structure, we’re thinking that it is also meant to undermine the entire US rooftop solar industry.

The Nevada decision sends this signal to both existing and potential rooftop solar customers in all 50 states: solar deals may look great up front, but you’re going to be left holding the bag sooner or later.

Why The Nevada PUC Stole Christmas

Our friends over at Politico.com are also looking at the Nevada decision through a national lens.

Hardly a bastion of liberal solar advocacy, Politico notes that while the Koch brothers (these guys) didn’t directly have a hand in the Nevada PUC decision, the PUC’s “lethal blow…to rooftop solar” was part and parcel of a larger struggle involving the fossil fuel interests of Koch Industries:

Harry Reid’s home state dealt a lethal blow Tuesday to rooftop solar power — the latest skirmish of a nationwide green energy battle that has pitted the Senate Democratic leader against his favorite target, the Koch brothers.

Politico also notes that at least one Koch-backed advocacy organization, the American Energy Alliance (these guys) applauded the Nevada decision as a matter of national policy.

Politico is not the only place where you can find Nevada Governor Brian Sandoval slotted into the Koch-supported category, the main point being that while the Nevada PUC decision has been mainly portrayed as a state-level fight, the bigger battle is between fossil fuels and renewable energy.

One-Two Punch For Rooftop Solar… And Tesla

Here’s where it gets interesting. The leading solar installer SolarCity made headlines back in November when it pulled out of TASC. The organization has been lobbying fiercely in support of rooftop solar in Nevada and it would seem that its messaging has been undermined by SolarCity’s decision to strike out on its own.

Whatever the initial effect, we’re thinking that SolarCity’s move has actually helped TASC by creating an opportunity for ramping up public awareness of the overall benefits of rooftop solar, meaning significant economic activity statewide as well as the (now-evaporated) opportunity for individual property owners to save money on their electricity bills.

SolarCity has created more than 2,000 new jobs in Nevada over the past two years, and just a few weeks ago, on November 30, it announced the creation of a new solar training center, its fifth such facility in Nevada since 2013.

Fast forward to December 23 and here’s how the company responded to the PUC rooftop solar decision:

The PUC has protected NV Energy’s monopoly, and everyone else will lose. We have no alternative but to cease Nevada sales and installations, but we will fight this flawed decision on behalf of our Nevada customers and employees.

Ouch! That’s horrible news for 2,000 Nevadans right there.

TASC still has the support of another leading rooftop solar installer, Sunrun. Here’s how Sunrun responded to the rooftop solar decision on December 22:

In a similar situation in Wisconsin, the Commission acted without evidence and attempted to eliminate the solar industry. TASC sued and TASC won, and TASC expects to do the same here.

Between the legal tactics of Sunrun/TASC and SolarCity’s gut-punch decision to stop operating in the state, it looks like the Nevada PUC is in for an interesting year.

The Tesla Connection

If SolarCity’s take-my-ball-and-going-home decision seems somewhat abrupt, consider the Tesla connection. For those of you new to the topic, the now-legendary Tesla Motors, Inc., and SolarCity have one important person in common — that being tech entrepreneur Elon Musk.

SolarCity received an open-armed welcome from Nevada Governor Brian Sandoval to open and expand its operations in 2013, which probably had something to do with the Governor’s efforts to woo Tesla into the state, too.

In that context, the PUC decision looks like a stab in the back for SolarCity and by extension Mr. Musk. It’s hard to imagine that Musk could pull the plug on Tesla’s massive “gigafactory,” which is supposed to be powered by solar panels and wind turbines, but it’ll be interesting to see how Elon and Tesla respond.

Image via SolarCity.