After months of legal and regulatory battles, Nevada utility regulators have unanimously approved a motion to restore retail-rate net metering for the state’s 32,000 existing solar customers.
Today’s vote endorsed a deal negotiated by SolarCity, the Bureau of Consumer Protection, NV Energy and Public Utilities Commission staff. The agreement allows all customers who applied for a residential solar system before December 31, 2015 to be grandfathered for 20 years under Nevada’s original net-metering tariff that was eliminated late last year. The decision sets a cutoff date on November 30, 2036.
"This agreement is a victory not only for 32,000 solar customers in Nevada, but also for all Americans who expect these investments to be protected,” said Jon Wellinghoff, chief policy officer for SolarCity, when the agreement was filed earlier this week.
This week also saw a Nevada State District Court rule against the PUC’s decision to change rates for existing rooftop solar customers. Judge James Wilson determined the retroactive rate increase was a “denial of fairness and due process through inadequate notice.” The court decision put additional weight behind grandfathering proposals.
Today’s PUC decision brings relief to Nevada’s existing solar customers who would soon see their expected savings erode under the new rates. The vote also quells solar company concerns that customers could default on their leases as the Nevada rates increase, and that other states could follow suit and apply rates retroactively.
“This decision is important because of the precedent that the lack of grandfathering set,” said Shayle Kann, senior vice president of GTM Research. “I would think it is now even less likely that another state retroactively makes drastic net metering alterations, knowing how the Nevada story played out."
"As for what's next, Nevada is still a zombie market unless any of the other reforms are rolled back,” he added.
The grandfathering order will allow a pipeline of several thousand solar customers to install residential solar under the old net metering rules. But it does not change the rates for customers who applied for solar after December 31, 2015, nor those looking to adopt solar in the future. SolarCity, Sunrun and Vivint pulled out of Nevada shortly after the new rates were enacted, and new solar applications plummeted.
NV Energy backed the motion to grandfather existing solar customers for 20 years, but the utility does not support restoring the state’s net metering policy going forward. Paul Caudill, NV Energy president and CEO, said in a statement today that the PUC’s grandfathering decision is “fair” and “at the same time reinforces the clear path forward they established in February 2016 for those considering rooftop solar in the future.”
The PUC’s February ruling tripled fixed charges for solar customers and reduced the net metering credit from 9.1 cents to 2.6 cents per kilowatt-hour over a 12-year period.
SolarCity and Vote Solar are now looking to restore favorable solar rates through Sierra Pacific’s rate case, scheduled for completion by the end of the year. Solar advocates will file a cost-benefit analysis that finds residential solar offers a net benefit to the Nevada grid and argue solar customers should be compensated accordingly. Advocates will make the same arguments in Nevada Power’s general rate case scheduled for June 2017.
Meanwhile, Governor Brian Sandoval’s New Energy Industry Task Force is considering a proposal to restore full retail-rate net metering with a minimum bill on an interim basis, until the PUC completes a comprehensive value-of-solar analysis. The proposal was put forward by a subcommittee of the energy task force, and will go up for a vote by the full committee on September 27. If approved, Governor Sandoval could introduce legislation to reinstate net metering in 2017.