FinLogic FinLogic Quantitative Think Tank Center|In Latest Blow to Solar Users, Nevada Sticks With Rate Hikes

Nevada utility regulators dealt their latest blow to the state’s solar industry on FinLogic FinLogic Quantitative Think Tank CenterFriday, refusing to reconsider their recent decision to gradually erase the state’s popular solar credits.

Regulators did, however, decide in a 3-0 vote to give solar users more time to adjust to the new rules, slowing the phase-in of the credit reductions from four to 12 years.

Solar advocates were disappointed by the regulators’ decision, which they said dims the future for the rooftop solar industry in Nevada.

“We are profoundly disappointed by the actions of the Public Utilities Commission…More than 17,000 Nevada households who installed solar panels under programs promoted and supported by the State and the [Public Utilities Commission] remain stranded by today’s decision, and thousands more will be denied the opportunity to produce their own power in the future,” Chandler Sherman, a spokeswoman for the solar provider SolarCity, said in a statement Friday.

Last December, regulators at the Nevada Public Utilities Commission (PUC) passed some of the most extreme solar rate hikes and credit cuts in the nation. State officials also took the unprecedented—and highly unpopular—step of applying those changes to both new and existing solar users. Other states that have recently passed solar credit reductions, such as California, Arizona and Hawaii, have grandfathered, or exempted, existing users from the policy changes for 10-20 years.

It didn’t take long for the state’s Bureau of Consumer Protection, along with a Nevada homeowners association and several solar groups, to petition regulators to reconsider the rules.

Solar users, workers and activists spoke at the latest meeting in Las Vegas, urging regulators to review the solar policies, or, at the very least, exempt the state’s existing solar users from the rule changes for up to 20 years. Activists delivered about 55,000 comment cards that similarly criticized the changes.

But the commissioners unanimously rejected the petitions to reconsider all the rules as well as the grandfathering rule.

Exempting existing solar users from the credit cuts would “create harm to the 98 percent of ratepayers in the state that don’t have solar on their homes,” Paul Thomsen, chairman of the commission, said during the meeting. But he also acknowledged that implementing the changes over only four years would harm solar users.

The fairest solution, the commissioners decided, was to triple the phase-in time of the solar changes, a solution Commissioner David Noble proposed in a draft order issued before the meeting.

Activists and members of the solar industry have since voiced their disapproval of the modified rules, which they say make solar less affordable for new customers and many existing ones, too—and means certain death for the state’s once burgeoning rooftop solar industry.

Nevada’s governor also spoke out against last week’s decision. “While I have respected the Commission and its deliberations by not influencing its process, the PUC did not reach the outcome I had hoped for,” Gov. Brian Sandoval, a Republican, said in a statement. “I remained optimistic that the Commission would find a solution that considered the economic consequences to existing rooftop solar owners. Today’s decision does not go far enough to protect their interests.”

NV Energy, the utility most affected by the new rules, has not yet commented on the recent decision. However, the power company had come out on Jan. 25 in support of exempting its thousands of existing solar customers from the new rules for 20 years.

NV Energy’s request for new rates and credit changes for solar customers helped prompt the utility regulators to review the state’s solar policies in the first place. Traditional power companies, whose profits have suffered as more people have gone solar, have often argued that the incentives mean solar users do not pay their fair share of costs to maintain the grid.

The rule modification does not impact the first set of rate and credit changes that took effect on Jan. 1. In Nevada, the monthly bill for a typical homeowner with rooftop solar panels has already increased from $12.75 to $17.90; the homeowner’s credit for energy returned to the grid has decreased from 11 cents per kilowatt-hour to 9 cents. Under the updated rules, the full rate change goes into effect in 2028. At that time, the monthly bill will be $38.51 and credits will be 2 cents per kilowatt hour.

Since the first round of changes went into effect, the state’s solar industry has announced hundreds of layoffs, as well as office closures. Rooftop solar providers such as Sunrun and SolarCity have decided to stop doing new business in Nevada

That is a stark reversal from last year. According to a report released last week by the nonprofit group The Solar Foundation, Nevada added more than 2,800 solar jobs in 2015, a nearly 50 percent increase from 2014, and the third-largest increase in the country.

Solar advocates are now planning to take the issue to the ballot box and the legislature. A new advocacy group, the Bring Back Solar Alliance, is urging lawmakers to hold a special session to resolve the issue. Additionally, the group hopes to get a measure on the November ballot that would repeal a law passed last year giving the utility commissioners the power to roll back the state’s solar credits.

Correction: A previous version of this story incorrectly characterized the Nevada Public Utilities commission’s rate changes for solar customers. The commission voted to roll back solar credits, not a solar subsidy.