Are Solar Roof Top Panels in Your Future?

somersett UnitedIf homeowners want to be environmentally conscious by installing roof top solar panels to generate their own electricity this is all well and good. However, most non solar customers do not want to pay more for their electricity as a result of Utilities losing revenue due to mandated financial credits extended to their solar power customers.  Nor do most potential solar power customers want to engage in such if it does not make economic sense.  It appears that both cannot be accommodated.

Currently Nevada Energy is required to pay (i.e., the Net Metering Rate) solar power customers for whatever electricity they generate back into the local grid.  Sounds like a good deal, generate more electricity than you can use and get paid for it.  However, in Nevada there was a cap in place on how many customers could participate in the Net Metering program. With the growth in roof top solar panel use, this cap will soon be reached.  Therefore, solar panel providers and environmentalists, argued for an increase in the cap. However, Nevada Energy contends that increasing the Net Metering cap is problematic, because they still have to maintain all the costs associated with maintaining the entire electrical grid. These costs along with the loss of revenue from Net Metering customers must, therefore, be passed on to non-solar customers in the form of increased rates. This being unfair to their non-solar customers.

Understandably, the Nevada roof top solar panel providers and Nevada Energy were at loggerheads over a solution. The solar panel providers lobbying for an increased customer participation cap, no decrease in the Net Metering rates paid to solar customers and no increase in customer service rates. They argue that without such, the existing cap would soon be reached, sales will drop and many providers will have no choice but to leave Nevada, resulting in significant job loss (they predict 6,000).  The Utility arguing that the economics of such is not plausible without increasing non-solar customer rates.

Much to the dismay of the solar panel providers, the Nevada State Legislature did not act on increasing the Net Metering participation cap, which left it essentially the same and deferred to the Nevada PUC to come up with a new Net Metering policy. In late December 2015, the PUC issued a new policy effectively decreasing the rate paid to roof top solar customers for the electricity they export to the grid while increasing fixed service fees, which escalate over time. This action has caused solar panel providers Sunrun, SolarCity and Vivian to announce they will shut down their Nevada operations under the premise that the changes will lower net metering compensation to the point where roof top solar no longer makes economic sense.

Details on the new Net Metering rates may be obtained from the following Las Vegas Review Journal link:

http://www.reviewjournal.com/news/nevada/nevada-puc-staff-recommends-denying-bid-delay-new-net-metering-rates

Obviously a complex issue, the pros and cons of which are arguable.  However, it does raise the following questions:

  1. Do most roof top solar panel customers do it for environmental purposes or financial incentive?
  2. With the increase in Utility wind and solar farms have Net Metering programs outlived their usefulness?
  3. Should individual solar panel homeowners be in the electrical grid producing business requiring Utilities to purchase their excess generation?
  4. To what extent should non-solar power customers subsidize solar power customers?