This group brings together the best thinkers on energy and climate. Join us for smart, insightful posts and conversations about where the energy industry is and where it is going.

Post

Hillary Clinton Weighs In on Nevada’s Bitter Solar Fight

When Democratic presidential candidate Hillary Clinton sat down with the Las Vegas Sun last week to chat with the newspaper’s editors, the first question wasn’t about jobs, gun control or Benghazi.

The first question was about solar.

In a wide-ranging interview with the Sun, Clinton was asked about Nevada regulators’ controversial decision to retroactively cut net-metering rates for rooftop solar in the state.

A few days before Christmas, Nevada utility commissioners unanimously voted to slash net-metering rates and increase monthly service charges for solar-system owners. The rules were retroactively applied to every solar system in the state — sparking outrage from customers who had invested in PV systems with the expectation that they’d get paid the retail rate.

Leading solar companies swiftly pulled out of Nevada and cut hundreds of jobs. 

“The retroactivity piece is extraordinarily problematic,” said Sunrun’s policy manager in an interview with GTM. “Nevada essentially baited solar companies into the state, and baited homeowners to go solar, and then switched the rules of the game. It’s the most egregious anti-business, anti-solar decision that we’ve seen promulgated in any state in the country.”

In her conversation with the Sun, Clinton did not offer specific thoughts on how to compensate solar. But she agreed with the solar industry that retroactive cuts are bad for investment and jobs — and unfair to homeowners.

Las Vegas Sun: You’ve been a supporter of clean energy and, more specifically, solar power. Our Public Utilities Commission dealt a significant blow to the state’s solar future just before Christmas. What are you going to do as president to ensure the future of the solar industry?

Clinton: I know there will be a hearing about this decision in the next few days. I think it’s important we give investors certainty and we give consumers choice. We’re never going to transition to clean renewable energy if we don’t do that.

Just look at the jobs that are being created. Nationwide, 174,000 jobs in the last few years. Here in Nevada, 5,900 jobs — 3,900 just last year. This is a win-win to move us away from fossil fuels, to diversify the grid, to give homeowners a chance to be empowered to do something about their own energy usage and put people to work.

I hope there is a way that this state can figure out a path forward. Every state is somewhat different. Every state has different rules and regulations and investment climates, but I’m absolutely convinced we’re going to have to do more solar, more wind and more renewables if we’re going to have the kind of future we should.

I don’t know all of the public utility rules in Nevada, but certainly people who acted in good faith should be given the benefit of that moving forward. I don’t think any change in rules should penalize people who were permitted and encouraged to do what folks have done. They shouldn’t see that investment absolutely destroyed. I’m hoping that there can be a sensible recognition of the benefits that this provides and the investments that people have already made.

Nevada’s rooftop solar industry exploded in 2015. According to GTM Research’s Cory Honeyman, the state was ranked 28th in residential solar installations in 2013. It rose to 14th place in 2014, and then to second place last year. Residential solar volumes grew tenfold from 2014 to 2015.

In recent quarters, 90 percent of those installations were financed through third-party power-purchase agreements. If lower rates apply to those existing contracts — which were crafted with the assumption that net metering would remain at the retail rate — some worry about a wave of defaults.

“It would be very unusual for a PUC to force a change in PPA pricing at any point during the term of a PPA. However, this is essentially what the PUCN has done when it voted to retroactively apply new, discriminatory pricing on existing NEM customers,” wrote a group of leading venture investors in a letter to state utilities commissioners.

The Nevada Public Utilities Commission is currently reviewing public comments on the rate change. Regulators could issue a final decision this week.

Sign up early for our Solar Summit 2016 in Scottsdale, Arizona. Trevor Houser, the energy policy advisor for Hillary Clinton, will join us to talk about her plan for solar. 

Jeff St. John's picture

Thank Jeff for the Post!

Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.

Discussions

Joe Schiewe's picture
Joe Schiewe on Jan 12, 2016 7:25 pm GMT

The solar owners should sue the solar companies for not disclosing that they could not guarantee that the investment gravy train consisting of state and federal tax credits, mandated grid access and net metering over-payment would continue for the life of the investment.  That said, I believe it is very likely that the Nevada made sure the solar companies disclosed in their solar investment agreements that the investor was taking all the risk (perhaps even burden the title of their home) if the huge subsidies were reduced and/or eliminated.  Very few investment programs have guarantees.  Also, according from what I hear from the pro-solar community, the owners can still opt to buy the revolutionary cheap Tesla battery, go off the grid, not pay the monthly service charge and get the retail rate (via not having to pay) for the electricity the generate.  The grid benefits by not having to burn fossil fuels to service the home, doesn’t have to deal with the intermittency of solar on the grid and the home owner continues to support solar and saves money.  A win – win.  

Josh Nilsen's picture
Josh Nilsen on Jan 12, 2016 9:11 pm GMT

The utilities shut down competition from more solar AND get to use the solar panels to balance their peak loads for a fraction of the price.

Well played lobbying money, well played.

Nathan Wilson's picture
Nathan Wilson on Jan 13, 2016 5:17 am GMT

Solar net-metering programs were not created by PUCs sitting in ivory towers; they are created as a result of consultions with various stakeholders.  Businesses specializing in residential solar could have pushed for something similar to the (somewhat) more sustainable programs used by utility-scale solar and wind projects (i.e. 30% investment tax credits or a production tax credit of $0.022/kWh for the first 8 years).

Instead they chose to push much more lucrative net-metering (exceeding $0.30/kwh in some markets), which was quite dishonest, as it pits the poorly informed buyers (who upon casual inspection assume that it is “fair”) against stakeholders with accountants, e.g. utilities and also any corporate users, who quickly realize that it represents a subsidy too huge to continue a long time or scale to even modest penetrations).  

Such a shame.

Hops Gegangen's picture
Hops Gegangen on Jan 13, 2016 11:45 am GMT

 

The solar industry needs to get creative. Net Metering, especially with subsidies, was just too easy.

One option is to displace usage — e.g., by substitution of solar for grid energy. The big solar installers could work with makers of air conditioner makers to create fully DC models that could use the panel output. No inverter, just a voltage regulator and some sort of buffer, like a car battery.

Likewise, EVs could be directly charged with DC. 

One might also build or retrofit homes to have off-grid circuits powered by solar, with a switch to put them over to the grid if the sun goes out. Then you could have a small system that just mostly powers the refrigerator.

They could also work with Bloom energy on small scale natural gas fuel cells for the home, as a back up to solar, allowing more people to get off the electrical grid if they are on the gas supply.

As the price of power from solar continues to drop, people will find creative ways to use it.

 

 

 

 

Bob Meinetz's picture
Bob Meinetz on Jan 13, 2016 4:02 pm GMT

Jeff, the fights in Nevada and elsewhere never could have happened before 1990 because profits were limited. They weren’t worth fighting over. 

Now, two special interests – the utility industry and the solar lobby – are fighting for the biggest piece of an unlimited generation pie. The solar lobby has no interest in keeping the marginal price of electricity low, because higher net metering rates increase cross-subsidization by making electricity cost more for everyone else. Both groups are free to lobby their representatives and bribe them with campaign contributions.

Under PUHCA of 1935 electricity transmission in the U.S. was required to serve the public interest. The idea either side in this money grab represents the interests of the public is a joke.

Leo Klisch's picture
Leo Klisch on Jan 13, 2016 8:26 pm GMT

If net metering goes the way of the Dodo bird here in Minnesota, I will consider my solar investment a donation to an environmental cause like the Nature Conservancy. Not tax deductible, except for the 30 percent ITC, but probably a better ROI than most charitable organizations. 

Joe Schiewe's picture
Joe Schiewe on Jan 13, 2016 9:31 pm GMT

An excellent perspective although I believe that you should be able to deduct it in the same fashion as a business equipment purchase depreciated over five years and get a payment for power distributed to the grid at 20% over spot price.  I would also request that the panels if located within a residential area be hidden behind house or some type of screening due to there ugly industrial look.  

Math Geurts's picture
Math Geurts on Jan 14, 2016 2:46 pm GMT

.

Math Geurts's picture
Math Geurts on Jan 14, 2016 1:59 pm GMT

Indeed: solar owners should sue solar companies.

Hillary Clinton is not in charge, and will not change this decision when she will be in charge: http://www.pv-tech.org/news/nevada-puc-refuses-to-delay-new-net-metering...

Leo Klisch's picture
Leo Klisch on Jan 14, 2016 2:23 pm GMT

Kind of like growing a personal garden and selling the excess at the farmers market for profit. Can’t sell at the local super market but at least consumers have a choise and producers have an outlet as opposed to the electrical power market.

I’m don’t like eye sores either,but far worse for me is the air pollution,smells and noise levels in a neiborhood. That’s why city codes separate industrial and commercial, at least for middle income and higher. I’m willing to put up with a few “eye sores” if it pays good social/environmental planitary dividends.

Joe Schiewe's picture
Joe Schiewe on Jan 14, 2016 3:54 pm GMT

I tolerate the eyesores as well but encourage a buffer from industrial and commercial uses. In the town I live in, the City leaders thought it would be great to show their environmental goals by installing solar panels to light the entry signs.  The town peope were so upset with the ugly panels at the City entrance that they wrote in to the paper and then removed them without permission. (I wasn’t one of them)  The City council apologized to the people of the town and stated that they got caught up in the moment.  It is a blight on the community with every ridgeline and surface covered with wind mills and solar panels.  I would much perfer to have a nuclear power plant with recirculated wet cooling behind a stand of trees within a mile of my home.  

Bob Meinetz's picture
Bob Meinetz on Jan 14, 2016 3:59 pm GMT

wind, because there’s quite a bit of work, security, and permits required to sponsor a farmers market, vendors pay a daily stall fee to sell produce there.

Similarly, there’s quite a bit of O&M required to run an electrical infrastructure. What payments do solar panel owners make to utilities which would correspond to a “stall fee”?

Leo Klisch's picture
Leo Klisch on Jan 14, 2016 5:30 pm GMT

I guess beauty really is in the eye of the beholder.

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »