Even though the solar industry showed unprecedented growth throughout 2015 and 2016 there are clouds on the horizon, even in the sunniest states. State regulators recently voted to slowly end net metering in Arizona. But clouds have silver linings—no matter how thin. Policy makers in Nevada initially ended net-metering entirely—overnight—they are now reconsidering their actions, already grandfathering existing customers back to their initial net metering agreements.
Net-metering, which allows residents to sell excess energy produced by their solar arrays back to the grid, has always been a contentious debate. Utility companies argue that the cost of integrating solar through net metering into existing grid infrastructure is expensive and costs should be handed down to solar customers through installation fees and volume-based rates. Solar advocates counter that the benefits of rooftop solar include reducing the need for more infrastructure, greater grid diversity, providing states with much-needed energy industry jobs and clean energy, helping utilities reduce their emissions.
In June 2016, Arizona Public Service (APS) filed a proposal to raise all customer’s rates by 7.96 percent, the largest increase proposal to date, decrease the rates of power produced by rooftop solar installation and institute a demand charge for new rooftop solar customers. The proposal would likely squash rooftop solar development and threaten nearly 7,000 solar jobs in one the strongest solar markets in the US.
However, the Value of Solar decision handed down in Arizona this week is more pragmatic and currently would compensate rooftop solar customers 11 cents per kilowatt-hour for power produced, but will decrease in future rate cases and new customers are not protected in the future. “Arizona ignores the fact that, among its many other attributes, solar reduces demand on the grid and reduces the need for substantial transmission and distribution investment,” according to Sean Gallagher Vice President of State Affairs for the Solar Energy Industries Association (SEIA),
Meanwhile in Nevada, the Public Utilities Commission (PUCN) handed down a decision this September that rolled back the most draconian changes it made in December 2015, when it ended net metering—for all its customers and required them to pay higher fees. The September ruling grandfathered existing net-metered customers into the net-metering rates they originally agreed to with the utility—they still had to pay the higher fees in the interim months.
During the recent decision the commission also excluded SolarCity, what was the state’s largest solar installer, from the process. SolarCity and other installers pulled out of the state when the utility eliminated net metering. As a result of the commission’s actions, the rooftop solar industry dropped by 93 percent in the state.
Along with other multi-state solar installers, SolarCity appealed the PUCN’s decision to eliminate net-metering. The utility, NV Energy, said it proposed grandfathering existing customers by allowing them to retain previous net metering rates and charges.
Now Nevada’s utility commissioners will hand down a new proposal that would allow up to 6 megawatts of installed rooftop capacity for new and existing customers. Unfortunately, the PUCN’s compromise still keeps solar customers on shaky ground by exposing them to unfair and potentially discriminatory rate classes, says Gallagher.Tweet