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Nevada makes rooftop solar less attractive

Scott Tong Jan 1, 2016
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A regulatory defeat for the residential solar industry takes effect Friday. In Nevada, utility bills for solar customers increase substantially, in a victory for the incumbent utility company in the state.

This is the latest of many state-level battles across the country.

“This one is definitely the most unfavorable toward solar that has happened,” said Shayle Kann, head of research at the energy firm GTM.

Solar customers served by Nevada Power face two big changes. First, the fixed part of their bill they have to pay, even if they barely use the grid, jumps 40 percent. By 2020, fixed charges will triple.

“However much solar power you want to put on your rooftop,” Kann said, “you’ll still have to pay that fixed service fee. So the higher that fee is, the less you’re able to reduce your bill with solar.”

And when customers sell their solar energy to the grid, the money they make back will shrink 75 percent in four years.

The upshot: customers that bought panels in Las Vegas figuring a payback period of, say, seven years, may never make their money back in savings. Those who leased solar panels assuming a low utility bill for years to come have had their assumption upended as well.

Across the country, these kinds of regulatory changes can occur anywhere.

“If nothing else, this should make consumers wary about getting into these long-term contracts,” said Catherine Wolfram, energy economist at the University of California-Berkeley Haas School of Business.

Wolfram predicts utilities everywhere will try to jack up minimum charges. Often, she says, they’re too low and don’t cover the full costs of operating the grid.

“In some ways the rate structures have been kind of wrong,” Wolfram said. “So I predict there will be more pressure like this to get the rate structure to reflect the costs.”

For now, Nevada solar customers bear rate hikes. Already, the country’s largest solar company, SolarCity, has pulled out of the state.

Next week, opponents of the Nevada rate changes will make their case to undo them before state regulators.

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