Nevada Public Utilities Commission Eviscerates State Solar Industry in Attempt to Control It
Nevada had one of the fastest-growing rooftop solar industries in the country — until state regulators changed the rules governing it, and the industry all but collapsed within months.
From Boom to Bust in a Single Ruling
The Public Utilities Commission of Nevada voted unanimously in December to eliminate one-for-one net metering, the system that had paid rooftop solar customers the same retail rate NV Energy charges everyone else for the surplus electricity they feed back into the grid. Under the new structure, that rate drops to something closer to wholesale, cut by as much as 75 percent over a phased schedule — and the commission applied the new, less favorable rates retroactively to homeowners who had already installed solar systems under the old rules, not just to future customers. Monthly fixed charges for NV Energy solar customers climb in tandem, rising from $12.75 to $17.90 in the first year alone, on a path toward $38.51 by the end of five years.
The human toll of that shift arrived almost immediately. SolarCity, then one of the largest rooftop solar installers in the country, announced it was ceasing all sales and installations in Nevada entirely, laying off 500 employees in the process. The broader numbers tell an even starker story: Nevada counted 8,764 solar jobs statewide in 2015, the vast majority in installation work — but new net metering applications, which had run as high as 1,368 in December alone, collapsed to just 69 in January and a mere 18 by June. In Sierra Pacific Power’s northern Nevada territory specifically, the PUC’s own later assessment acknowledged the order had “all but crushed the rooftop solar industry,” with applications falling from 983 in 2015 to just 41 the following year.
The Justification, and Who’s Actually Disputing It
The commission’s stated rationale centers on a cost-shift argument: that non-solar customers were effectively subsidizing their solar-equipped neighbors, since utilities like NV Energy have to maintain the same grid infrastructure regardless of how much power a given household draws from it, while solar customers pay less into the system that still serves them during nighttime hours or cloudy days. The PUC’s own commissioned study put that subsidy at roughly $16 million a year statewide — a figure solar advocates have disputed sharply, arguing it dramatically understates the grid-stability and environmental benefits distributed solar generation provides in return.
That dispute has real, sympathetic human stakes on the ground. Helton, one of the affected homeowners, described the burden falling hardest on exactly the population least equipped to absorb it: “You have people making decisions to buy these panels with fixed incomes. Seniors have tried to make the right decision to preserve their future dollars. All of this is impacting them” — a reference to retirees who invested in rooftop systems specifically as a way to lock in predictable electricity costs, only to see the economics of that decision reversed after the fact by a regulatory order applied retroactively to systems they’d already paid to install.
A Fight That Would Continue for Years
Retroactively changing the terms for existing solar customers proved to be the most legally and politically explosive part of the decision. A lawsuit was filed against the PUC arguing the retroactive rate change violated existing contracts between the state and solar installers, and Nevada’s own governor, Brian Sandoval, would go on to publicly support “grandfathering” pre-2016 solar customers back into the original, more favorable rate structure — a position the PUC itself had explicitly declined to adopt when it issued the original order. Solar advocates, including SolarCity chief Lyndon Rive, began gathering signatures for a ballot referendum aimed at restoring the more favorable rate structure through direct democracy rather than waiting on the commission or legislature to act.
That fight would eventually produce a partial reversal: Nevada’s legislature passed a new law directing the PUC to revisit the rate structure, and the commission’s subsequent orders moved toward a “declining tranche” system paying new solar customers a percentage of retail rates rather than the harsher wholesale-rate cut imposed in 2015 — though NV Energy itself would go on to describe elements of that revised approach as unworkable, keeping the underlying fight over how much rooftop solar customers deserve to be paid for their excess power very much alive years after this initial ruling first devastated the industry that had, just months earlier, been one of the fastest-growing in the state.
For related coverage of renewable energy policy, see our piece on Portland activists blocking Shell’s Arctic-bound icebreaker, or browse our full Environment archive.