Battles over Net Metering Cloud the Future of Rooftop Solar

Solar power installer SolarCity, the country’s largest provider of rooftop panels, has exited the Nevada market in the wake of the state’s rollback of the net metering fees paid to residential solar owners.  The departure marks an escalation in the war over net metering that is roiling the industry.

One of the fastest-growing markets for residential solar, Nevada is the first state to drastically revise its policies on net metering—wherein owners of residential solar arrays are compensated for the power they send onto the utility power grid, usually at retail rates.  All but a handful of states have instituted net metering.  Charging that these fees represent an unfair transfer of costs to the utilities and non-solar customers, utilities have mounted a well-funded campaign to reduce or eliminate the payments.  The Nevada Public Utilities Commission concurred, calling on utilities to cut the compensation for solar providers from retail to wholesale rates.
...
Events in Nevada ... could signal a major reshaping of the economics of solar power for homeowners.  The retail rate of electricity in Nevada is 12.39 cents per kilowatt-hour; the wholesale price for electricity in the region that includes Nevada averaged around two cents per kilowatt-hour in December.  According to a report from Lawrence Berkeley National Lab, the cost of a residential solar system has fallen to around 25 cents to 30 cents per kilowatt-hour.  With federal and state subsidies and tax benefits, that figure drops to 15 cents per kilowatt-hour or less. If the retail rate for electricity from the grid (absent net metering fees) is less than that, solar is a poor investment; if it’s more, solar is a good investment.
...
Challenges to existing net metering programs are underway in most of the major markets for solar power, including California, Arizona, and New York.  Mississippi recently announced a net metering policy that will pay wholesale rates, not retail, for solar power produced by homes and small businesses.  Hawaii closed its program to new solar owners in October.  Many states are at or near the limits established on total solar capacity allowed under their net metering programs, meaning that new residential installations will not be covered under the compensation system. Nevada maxed out its 235-megawatt net-metering program earlier in 2015, causing Solar installer Vivint Solar to pull out of the state.

Not all of these states will roll back their net metering fees, though.  New York, which has undertaken a major restructuring of its electricity sector, actually suspended its cap on solar PV systems covered by the state’s net metering program in October.  Also in October, New Mexico regulators dismissed a proposal by El Paso Electric to impose new fees on solar owners. Regulators in Arizona, where the net metering debate has been sharpest, have declined so far to modify its program as regulators seek a compromise between utilities and solar advocates.  And regulators in California released a proposed decision at the end of the year that would leave current compensation policies in place.

Read more at Battles over Net Metering Cloud the Future of Rooftop Solar