There’s no sugarcoating what happened in Nevada late last year. State regulators slashed rates for supplying solar energy to the grid, rates that homeowners expect to receive for 20 years when figuring the return on investment from rooftop solar.
Other states have imposed fees on new projects, scaring off new investors, but none had gone back and changed the rules for existing solar owners this way. Several top installers, including SolarCity, Vivint Solar, and Sunrun, responded by pulling out of the market. It looked like solar in Nevada had gone bankrupt, turning out the lights on the tenth-largest residential market in the country.
Nevada’s fate matters not only to the 17,000 people who’ve seen investments abruptly lose value. Hundreds of thousands of US homeowners who’ve reduced their electric bills by going solar, and millions more who could save money by joining them, need some assurance that the same thing won’t happen to them.
In recent months, solar industry proponents have given themselves four chances to reverse the Nevada government and the state’s biggest electric company, NV Energy. The chips are down. The deck may be stacked against them. But when betting against the house, four chances are better than none.
On Feb. 17, The Alliance for Solar Choice (TASC), an industry-backed advocacy group, petitioned the Nevada state court to overturn the new rooftop solar policy. TASC says state law protects its members against prejudice, and by terminating a program that valued solar energy at the retail rate of electricity, Nevada broke its own law. Several groups are supporting TASC in the lawsuit, including the Sierra Club, the Solar Energy Industries Association, and the state attorney general’s Bureau of Consumer Protection.
One week before filing suit, TASC blasted Nevada Governor Brian Sandoval and the state commission that approved the solar rate reduction, noting that commissioners ignored all outside recommendations by applying the reduced rates to all solar customers, new and old. “Sandoval's legacy will be letting his hand-picked commissioners eliminate a booming industry while he complicitly stays silent,“ said Bryan Miller, TASC president and a senior vice president at Sunrun.
Class Action Lawsuit
Two Las Vegas lawyers have initiated a separate lawsuit accusing NV Energy of fraudulently misleading consumers and gaming the electricity market by first encouraging residential solar and then scheming to destroy it. Two customers named in the suit claim they would not have installed solar if they had known the utility planned to increase solar costs “in an anticompetitive manner to restrain trade … and maintain [a] monopoly.”
The class action requires court approval to represent all NV Energy solar customers, about 17,000 people in total. NV Energy has filed papers asking the Clark County Court to dismiss the suit, but lawyers in the case have yet to make substantive arguments in front of a judge.
An industry-backed political action committee called No Solar Tax PAC has petitioned the Nevada Supreme Court to let voters in the next election determine whether the rate for solar energy should be reduced or not. A state court judge in March ruled that the ballot measure could go to in front of voters, but the state legislature would get the final say on any decision made at the polls. No Solar Tax PAC has appealed, asking the state Supreme Court to leave the matter entirely to the people.
The political action committee has been allowed to continue a signature-gathering campaign as it awaits a Supreme Court ruling, but it may already have enough support to qualify for the ballot. About 55,200 signatures from registered voters are required. In March, the campaign announced that it has signed up over 100,000 supporters.
A separate ballot measure called the Energy Choice Initiative seeks a state constitutional amendment to open a competitive market for retail electric service so companies other than NV Energy can supply energy to Nevada homes and businesses. The proposal is reportedly linked to three Las Vegas casinos seeking to cut ties with NV Energy—MGM Resorts International, Las Vegas Sands, and Wynn Resorts—and has garnered support from Sen. Harry Reid and Elon Musk, the Tesla CEO and SolarCity board chairman. Billionaire investor Warren Buffett’s Berkshire Hathaway owns NV Energy.
June 21 is the deadline to qualify a ballot measure for the 2016 election. The general election takes place on Nov. 8.