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This “Rooftop War” Will Determine the Future of the Solar Industry

by | published August 16th, 2016

On August 5, I wrote to you about the two conflicting solar initiatives the ballot in Florida. But there’s an even more important political contest over solar going on in the U.S. right now.

The issue is “net metering,” and it’s the battlefield on which the next advance in solar energy is playing out.

Net metering is simply the policy that allows owners of solar panels to sell back the power they generate to the grid, at market rates. Needless to say, utilities are against the practice, as the policy turns their customers into competitors.

As net metering is one of the main ways of cutting the cost of owning rooftop solar panels, the future of the policy could well determine the future of the solar industry as a whole.

And in this “rooftop war,” Nevada has led the way by virtually destroying an entire statewide industry with a single decision…

Nevada is Ground Zero for this “Rooftop War”

Not only is net metering a primary way of cutting the effective cost of owning solar panels, leading to a spurt in households switching to solar, but as some states have extended net metering to commercial users, solar companies have also noticed more and more interest from that sector as well.

Needless to say, utilities are against the practice, claiming that it amounts to a subsidy paid by non-solar users to those with solar panels, resulting in unjustified rate increases among the non-solar population.

And last spring, the Nevada State Legislature authorized the state’s Public Utilities Commission (PUC) to set new rates for rooftop solar customers.

The reason behind this change was itself created by lawmakers. When initially approving net metering, Nevada’s legislature placed a cap on the number of people who could use the net metering system. And last spring, that cap was about to be reached.

In response, the PUC decided that solar rates should go up, concluding the existing levels required customers without solar panels to subsidize those with the panels. The commission, in short, adopted the utilities’ argument – and the result was immediate.

Large solar companies laid off thousands of workers in the state, with most closing their doors and suspending operations completely. Smaller companies have virtually disappeared. The few surviving ones have restricted their businesses to only offering efficiency fixes for Nevadans who already have solar panels.

But Nevada’s solar industry also fought back. They began a well-publicized campaign to reverse the PUC decision, and quickly focused on one key strategy…

Nevada’s Voters Will Get a Say One Way or Another

The solar industry joined forces with consumer action groups defending the interests of rooftop solar owners and tried to get the matter in front of voters on the November ballot.

You may recognize that strategy from what’s going on in Florida right now, as you saw on August 5.

Initially, things looked promising. More than twice the number of needed signatures was quickly collected. But then the state supreme court chimed in.

On August 4, the court ruled unanimously that the measure contemplated was not a proper matter for statewide vote. With the ballot route off the table, advocates for the solar initiative now have only one option – putting pressure on the state legislature.

That puts this contentious issue right back into the laps of the same folks who created it to begin with.

It’s also unleashed extremely well-funded campaigns by both the utilities and solar groups intended to influence (and pressure) elected officials. The punches and counter-punches are already monopolizing the air waves… and the state legislature won’t even be back in session until February 6, 2017.

These campaigns are focused on two issues…

Nevada has Already Lost 90,000 Jobs

First is the attempt to “grandfather” the estimated 30,000 existing solar customers under the old rates – the rates that were in place when these Nevadans installed their solar panels.

This measure already has the support of Governor Brian Sandoval, who has promised to introduce a “grandfather” bill when the legislature reconvenes… next spring.

Second, and more important, is this. As it currently stands, the PUC decision effectively ends the expansion of residential and commercial solar power in the state, choking off what had been (after tourism and gaming) the largest domestic industry in the state.

Estimates by solar advocacy groups put the lost jobs at almost three times the current residential solar users – in other words, at about 90,000 lost jobs.

In one decision, the PUC ended Nevada’s preeminence in residential solar energy.

And with campaign money and ads filling radio, TV, and newspapers from now until the November election, there’s little doubt that solar power in general, and net metering specifically, will be an important (if not the main) issue in Nevada’s state elections.

Both sides are now marshalling data to argue that legislators in the opposing camp are likely to lose re-election. The utilities alone have already spent over $2 million in a statewide advertising blitz to drive their position home.

On the other side, advocacy groups for solar users have staged highly publicized protests. In some cases, these have resulted in state legislators’ home offices being closed.

As important as this is to Nevadans, the impact of what’s happening doesn’t end at the state border…

This “Rooftop War” Could Change the Face of the Solar Industry

Shortly after Nevada decided to end net metering, California’s utilities commission narrowly decided to retain the practice. Overnight, California became the new presumptive base for the residential solar industry.

But with similar attacks on net metering underway in Arizona and Colorado, all eyes are on Nevada once again. How the state’s “rooftop war” ends will have much wider implications for the solar industry and the utility sector.

As always, we’ll be following who’ll win – and who’ll lose – right here in Oil & Energy Investor.

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  1. August 16th, 2016 at 15:38 | #1

    Warren Buffett owns Berkshire which owns Nevada Power. He also owns coal mines and trains to transport coal and oil products. The last thing he wants is for solar (that he doesn’t own) to take over the National energy production and push his stone age filthy energy products out. What is unacceptable to him is that he stands to lose $Billions ($Trillions?) to private individuals who only want to save on energy costs. Yes, he is also delving into solar power, but on his own terms where he will have a monopoly over Nevada’s citizens. They will have no viable alternative to his insatiable desire for more and more money that he can squeeze from the average energy consumer.

  2. Boud Hammelburg
    August 16th, 2016 at 18:38 | #2

    plse keep me posted

  3. August 16th, 2016 at 23:21 | #3

    If being connected to the grid is required, then net metering should be allowed. Net metering cannot really apply if one is off the grid.

  4. Edouard D’Orange
    August 17th, 2016 at 13:41 | #4

    Most environmentalists and crazy Democraps have pushed the so-called renewable energy policy, with solar (and wind) as a big part of that policy. Crooked Hillary is making it part of her policy. Yet, Democraps in California (which is nearly a one party Democrap state) barely allowed net metering which is homeowners using solar panels. So, what gives? It must be the big money donors (utility companies) and big money utility shareholders stopping net metering programs. Way to go, Democraps- corrupt to the core.

  5. Tony Simmons
    August 18th, 2016 at 18:40 | #5

    Actually, the legislature did not create the net metering situation. NV Energy started the problem in June 2007 through a lack of due diligence. In 2007, the legislature added NRS 704.775 2(c)4, which states “The value of the excess electricity must not be used to reduce any other fee or charge imposed by the utility.” The value of excess energy can not be used to reduce energy service fees (BTGR). special program fees, or taxes. NV Energy continued to credit excess energy for the value of BTGR and then use the credit to offset BTGR. This effectively overcredited excess energy by 175% (7 cents per kWh) more than the legislature authorized.

    which effectively reduced the value of excess energy sent to the grid. Prior to 2007, the NRS was silent on fees for energy service ,NV Energy did NOT change the billing practices

    7 years later in March 2014, the Bureau of Consumer Affairs recognized the problem in March 2014 and petioned the PUCN to address it in the upcominf rate case. On a 2 to 1 vote, the PUCN forward the issue to the legislature who sent it back as SB 374 for the PUCN to address. The legislature did not change any portion of NRS 704.775, the bill calculations.

    Because the old rate violated a statutory prohibition, the PUCN could “grandfather” customers onto the old unlawful rate.

    All the major players have a degree of liability for the misleading rates between 2007 and 2015. Don’t expect the legislature to jump in before the litigation is complete.

    As the drafter of the contracts and tariffs with the statutory violation, NV Energy has pirmary liability for deceptive trade practice for failure to disclose material facts.

  6. rfaze
    August 20th, 2016 at 12:01 | #6

    Well being free is better off the grid; the electricities hikes are awful. I didn’t know bershire owns elerical companies since my annuity is with him. That’s a good thing for me either way, but I believe in off the grid n the government paying me n my neighbors for using my energy. also what or where can I purchase a device for the storage of my own excess energy from my solar.? does anyone know or can direct me to the site I would greatly appreciate it. also I’m using telesa device along with my solar telesa pull energy from the air.

  7. Bob Schubring
    August 20th, 2016 at 17:59 | #7

    The problem here, is that the sun sets at night, but Nevadans go right on consuming electric power, which has to come from somewhere.

    Utilities agreed with the State of Nevada, to be responsible for being that Somewhere, from which power will flow when the sun isn’t shining. In return for agreeing to do that, the State gave utilities power to regulate how they pay to manufacture that power.

    Legally there are two choices:
    1. Go off-grid. Store power in batteries to use at night. When the batteries run out, sit in the dark and suffer until sunrise, then buy bigger batteries.
    2. Go into the stock market and buy the Nevada Power company, and take control of it. Then make plans to sell the surplus net-metered power into other states. Change the rates paid to consumers for that net-metered power, to reflect the cost of interstate transmission to other states. The entire problem here, is that there need to be systems to run the grid at night, under current law, and there must be a way to pay for those mandated systems. If the mandated systems must be financed, solely by the power they generate at night, then rates at night must be raised, and daytime rates lowered, to account for the difference.

  8. Paul Fearell
    August 22nd, 2016 at 06:43 | #8

    Why is everyone so Greedy ? If I have extra Food I share it, what if we learn to Share our extra power ♡ wouldn’t that be Kind to our neighbors

  9. RH Findlay
    August 24th, 2016 at 04:01 | #9

    Ah, free enterprise. The private (often privatised) power utilities provide electrical power for the community grid and insist that we buy it whether we want it or not. Solar houses provide electrical power and the producers of that power are not allowed to sell it at a fair price to the community grid.

    As for limitations to battery storage.; one can make diesel out of cooking oil quite easily and run an adequate home diesel generator at night.

    It is that simple.

  10. Tim
    September 18th, 2016 at 16:01 | #10

    Ellon Musk and his wall mounted home storage battery packs will allow the population to produce power any way they wish and then store it for use as it`s required. If you need more storage, you buy more battery packs (and more PV units/wind turbines).
    In addition, your electric car has a battery pack and that will also be used to store power for use at home (most of you do not empty your `tanks` on the way to and from work…..so what`s left in the battery can be used at home and what ever you produce from evening sun or windpower will be taken by the car`s battery pack for tomorrow`s journey).
    The market is going to change dramatically, no matter what the utilities, or the oil companies think or want.

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