Bills seek to kick-start Nevada's diminished rooftop solar industry

Update 1:10 p.m.: Bill sponsors have proposed an amendment that would limit net metering under the old rates until the Public Utilities Commission comes up with a "net billing tariff." In designing the tariff and developing a valuation
for solar energy that customers sell back to the grid, regulators would have to
consider factors such as how much the utility company saves by having some of its customers produce their own power and how much of a value that renewable energy provides to the environment.

Under the amendment (document at bottom of story), customers would be under the rate structure they signed up for for 20 years or the lifetime of their solar system -- whichever is longer.

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If an aggressive energy bill passes the Nevada Legislature, the diminished rooftop solar industry could have another day in the sun.

An Assembly energy subcommittee is meeting Monday to consider AB270, which repeals language passed in 2015 and offers net metering at older, more favorable rates to an unlimited number of people. Proponents say it will resuscitate a rooftop solar industry that withered when utility regulators implemented a less favorable rate structure, making it far less economical to install panels and sell back excess energy to the grid.

“It will get people back to work. It will make it abundantly clear to voters and ratepayers that they can do solar in a manner that they thought that they were going to be able to do it a couple of years ago,” said Democratic Assemblyman Chris Brooks, a co-sponsor of the bill that he expects will be amended to include a transition to another, permanent pricing model. “Then it starts a process that moves us into the next generation of what distributive generation looks like.”

Lawmakers will also look later this week at AB405, which declares a set of fundamental rights for solar owners that could ward off extra fees, and sets consumer protections that aim to keep scammers out of a resurgent solar industry.

DIGGING OUT FROM A DEBACLE

Strife over rooftop solar policy has been brewing since Nevada approached a statutory limit on net metering in 2015, and lawmakers asked the Public Utilities Commission of Nevada to set rates for rooftop solar customers once the state hit the cap. In an effort to correct what they determined was a cost-shift from solar to non-solar customers, regulators approved a less-favorable rate structure that applied to both future and existing solar panel owners.

That meant that the electricity cost savings customers could expect after installing a system generally didn’t justify the up-front investment, and hundreds of people who made a living selling and setting up solar arrays lost their jobs. An acrimonious, public battle between solar advocates, state regulators and NV Energy raged.

Solar supporters, funded by rooftop solar company SolarCity, sought to undo the decision by putting the issue up for a statewide vote in November 2016. While the proposal had widespread public support, NV Energy waged a public relations campaign against it, and the Nevada Supreme Court ultimately ruled the language wasn’t suitable for the ballot.

Since then, there have been signs of reconciliation. NV Energy supported a move to grandfather tens of thousands of existing solar customers into the older, more favorable rates, and they’re collaborating with solar companies to ensure as many people take advantage of the provision as possible.

Even the PUC, under new leadership, acknowledged in December that their decision “all but crushed the rooftop solar industry” and “may be best viewed as a promise better left unkept. The PUCN is free to apply a new approach.”

BILL TO BRING BACK SOLAR

Democratic Assemblyman Justin Watkins’ sweeping bill, AB270, looks a lot like the ill-fated ballot measure. It would remove any cap on how many customers can participate in net metering, and would give them all the attractive rates.

As of Friday, NV Energy said it hadn’t taken a position on the measure, which is still in flux and is to expected to attract amendments ahead of the Monday hearing.

Watkins describes the bill as a Band-Aid and “a bridge to a longer term solution.” It would bring immediate relief to a solar industry that’s seen business plummet under the new rate regime, but it doesn’t answer the unresolved question of what’s a fair reimbursement rate for people selling solar power back into the grid.

Regulators predicated their earlier rates on data from a few factors, but they didn’t have as much information as they wanted on other factors that may have shown rooftop solar installations bring a net benefit to the grid. They also didn’t have many directives about the Legislature’s policy priorities in the 2015 bill; Watkins said lawmakers would be clearer this time around.

“They have determined the value of solar as we dictated the factors to them in 2015,” he said. “I think everybody that’s a part of this discussion said we’re going to provide more direction on what we really want this to be.”

That also might include specific “brackets” on the valuation of solar, so that even if regulators rule the buyback rate should be very low, it doesn’t dip so low that solar companies go out of business.

“We can also kind of put a safety net there that doesn’t take away the industry completely because it’s a good public policy to continue expanding our renewable portfolio,” Watkins said.

One path forward is that the net metering structure of AB270 stays in place until regulators at the PUC finalize a more precise solar valuation scheme. Another possibility is letting competitive market forces set the price of solar.

Watkins says the net metering structure in his bill “is not a long-term viable solution” because once a critical mass of customers adopt rooftop solar, it could start putting a strain on the grid and creating technical problems. Many states prescribe net metering to a certain limit -- when rooftop solar systems reach a certain percentage level of market penetration.

Nevada’s far enough away from hitting that critical mass, Watkins argues, that there’s no harm in going back to the old rates for a while.

“I think that the ultimate energy policy answer on that is so far down the road that it’s foolish to believe that some other legislative body in between now and then isn’t going to step in and act,” he said.

A SOLAR BILL OF RIGHTS

A companion bill scheduled for discussion Wednesday, AB405, seeks to add consumer protections for rooftop solar business transactions. That addresses concerns about unscrupulous companies persuading people to sign deals without understanding the implications.

It would standardize the presentation of solar contracts and terms, including a cover sheet that could allow consumers to quickly compare how much systems from different companies would cost.

“This might be the biggest, or the second biggest transaction somebody would ever make in their life,” Brooks said. “You’re signing a 20-year contract in some of these cases for a complicated energy product. And to sign up for a new credit card, there’s far more disclosures, and far more protections.”

AB405 also includes a Renewable Energy Bill of Rights, which enshrines in statute the right to generate and store your own power. It’s a pre-emptive strike against “buy all, sell all” policies that would force consumers to sell the utility all the power that comes from a system generated on the consumer’s own property, and then allow for fees when the consumer buys back some of that energy from the utility.

POLITICAL PUSH

Watkins and Brooks say Nevada’s solar situation was a top concern for voters during the campaign and remains one of their primary legislative priorities. While the solar battle has been ugly over the past two years, both said their recent discussions to develop the bills has been cordial.

“It’s been a very friendly and open and professional conversation with all the parties,” Brooks said. “Nobody’s dug in. Nobody’s pushed back. Nobody’s fighting. It’s been … very productive, but it’s time consuming.”

Nevertheless, pro-solar groups including ClimateTruth.org, are starting a public campaign urging Nevadans to get the bills to the finish line. They plan to deliver a petition with 2,000 signatures to lawmakers this week and started a $30,000 online video ad blitz on Friday.

The YouTube commercials try to focus on the human level of the debate instead of the fight between deep-pocketed solar and utility companies. One features the owner of a small solar business who took a hit under the new rates and another features a panel installer who lost her job in the shakeup.

“Our goal has been to expand the conversation around rooftop solar,” said Emily Southard, campaigns director at ClimateTruth.org. “We’re showcasing that everyday Nevadans are the ones that have been bearing the impact of the rollback from net metering.”

There’s still a question of how the net metering policies would work amid the uncertainty of Nevada moving toward an open energy market, and how they fit in with larger energy initiatives under consideration in the Legislature. Those include an aggressive Renewable Portfolio Standard that would require utilities to draw 80 percent of their energy from renewable sources (up from about 20 percent now), a move toward batteries to retain more of the energy produced from solar panels and “time of use” rules that would charge customers higher rates for electricity when demand peaks.

But the bills would at least address concerns that are at the top of voters’ minds.

“I think if state senators and assemblymen are acting in the interests of Nevadans, it’s an easy choice to support rooftop solar legislation,” Southard said. “In the end, we think that they will.”

Feature photo:  Democratic Assemblyman Justin Watkins. Photo by David Calvert.

Sponsors' Amendment to AB270 - Net Metering Bill by Michelle Rindels on Scribd