A big bet on solar energy may be about to go sour in Nevada. State regulators are considering a utility’s proposal to charge owners of rooftop solar systems a monthly fee for being connected to the grid.
That kind of fee, called a demand charge, would take the savings out of solar for most homeowners, undermining the business model of solar companies. Utilities in several states are pressing for similar charges. One big solar installer, Vivint Solar, has already stopped doing business in Nevada because of the uncertainty.
“That’s the definition of eliminating the industry,” says Bryan Miller, who is with Sunrun, a solar installation company. “So this debate is about one word: competition.”
Green groups say the Nevada demand charge could jack up solar users’ bills by $70 a month.
“Which is too complicated to explain,” Miller says. “And anybody could read the thousand-page filing and still not understand how much they would pay under this Byzantine set of charges and fees.”
NV Energy’s side? The company’s Kevin Geraghty says if you own solar today, you get so many credits, you hardly pay the electric company, which runs the grid you use when there’s no sun.
“At any one time, if a cloud goes by or your system fails, NV Energy service to your home will assure that your lights don’t dim, they don’t flicker,” he says. “And that demand charge represents just how much you are depending on the grid for your energy choices at your home.”
Is this about quashing competition? A power industry paper calls rooftop solar a “disruptive challenge.”
“I think utilities have been not stellar examples of players in competitive businesses,” says Larry Reilly, a former utility executive.
He said power companies are making less money as solar grows. One solution: charge every customer a lot more for connecting to the grid.
“The analog there is the way cable TV is billed,” he says. “You pay a fixed amount to have cable TV, and if you never turn the TV on at all, you’re still going to pay the charge per month.
Just last week, Nevada hit a state solar energy cap. Regulators can’t lift the cap, but can allow new customers at new rates.
Late Wednesday, Nevada regulators approved a plan to continue the current rate structure for customers with solar panels until the end of calendar 2015. It amounts to a temporary victory for rooftop solar advocates, but a permanent decision will not come until 2016 at the earliest.
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