Nevada report: Rooftop solar customers shift $36M in annual costs to other ratepayers

Dive Brief:

  • A new study commissioned by Nevada lawmakers reports the state's 30,000 rooftop solar users shift $36 million in costs to non-solar ratepayers annually.
  • The study, conducted by Energy and Environmental Economics (E3), was an update a 2014 report from the firm, which found a $36 million benefit to non-solar customers from rooftop systems. The new report found an additional cost of $15 million to grandfather existing net metering customers under the previous rate structure. 
  • The study is expected to inform future regulatory decisions regarding rooftop solar incentives and interconnection. Rooftop solar customers have installed the equivalent 265 MW of energy, or 3% of major Nevada utility NV Energy's peak load, producing roughly 1.5% of its electrical generation, the study noted. 

Dive Insight:

Nevada has been the epicenter of a contentious debate over rooftop solar ever since the PUCN rolled out a controversial decision increase fixed charges and cut net metering rates for both existing and new rooftop solar owners.

The report noted “for the state of Nevada, NEM generation is a costlier approach for encouraging renewable generation than utility-scale renewables."

Utility-scale solar costs dropped faster than rooftop solar, according to the report, which could hurt efforts by solar advocates seeking to restore the original rates or at least push for a grandfathering clause. 

This latest study contrasts with one filed by SolarCity in May that found rooftop solar generation benefits all ratepayers to the tune of 1.6¢/kWh in net benefits to the grid, and used the tool established by E3 in 2014 to come up with the numbers. 

In its 2014 report, E3 found $36 million in benefits from net metered solar, while adding there was little to no cost-shift to non-rolar ratepayers. But that since changed since the PUCN, in their decision last year, said they found $16 million in annual cost-shifting. 

The new study was commissioned by Assemblyman Stephen Silberkraus and Sen. James Settelmeyer who said in a letter to the PUCN that "an updated, independent study prepared by E3 will provide a foundation as we continue the discussion of ensuring that all customers benefiting from the electric grid are paying appropriately.” 

The finding of an extra cost to grandfathering in solar customers could be a thorn in the side of the solar sector, as the exclusion of such a provision led to the exit of two major developers from the state after the decision was introduced. 

NV Energy has sought to rectify the situation twice by proposing a grandfathering provision. The most recent one came at the end of last month and contains similarities to one proposed by a task force from Gov. Brian Sandoval (R), who has been outspoken against the new net metering tariffs

Now that the study has been filed, stakeholders will have a chance to comb through its findings and offer other perspectives. Chandler Sherman, spokeswoman for Bring Back Solar, a local advocacy group, said they plan on reviewing the study and providing data and analysis. 

“The public deserves a rigorous and fair accounting of the costs and benefits of solar, and we will work with the PUC and other leadership to ensure the final study meets the high standards the public expects,” she said in a statement, according to the Las Vegas Review-Journal. 

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Filed Under: Solar & Renewables Regulation & Policy
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