Future of U.S. Solar Threatened in Nationwide Fight over Incentives

Two sun-drenched U.S. states have lately come to very different conclusions on a controversial solar power incentive essential to the industry's growth.

In California, regulators voted in January to preserve so-called net metering, which requires utilities to purchase surplus power generated by customers with rooftop solar panels.  But neighboring Nevada scrapped the policy - prompting solar companies to flee the state.

The decisions foreshadow an intensifying national debate over public support that the rooftop solar industry says it can't live without.

"Without net metering, it just doesn't work," said Lyndon Rive, chief executive of top U.S. residential solar installer SolarCity Corp.

More than 25 of the 40 U.S. states with net metering policies are reconsidering them, according to the North Carolina Clean Energy Technology Center at North Carolina State University.

Opponents raise fairness concerns and argue that the industry no longer needs generous incentives, citing its rapid growth and solar panel prices that have fallen about 40 percent in five years.

Net metering credits solar users - at full retail rates - for any surplus power their panels generate above household usage.  That means many customers pay no monthly utility bill or even rack up excess credits, which they can redeem later in months when their systems produce less power than their home uses.
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Utilities have argued that solar subsidies benefit more affluent homeowners at the expense of everyone else.  With solar users buying less power - or even selling it, through net metering - that leaves fewer ratepayers to share the cost of traditional power generation, utilities say.

Warren Buffett’s Berkshire Hathaway Inc is the owner of NV Energy, the Nevada utility that proposed the state’s move away from net metering.  In his annual letter to shareholders last week, Buffett warned that “tax credits, or other government-mandated help for renewables, may eventually erode the economics of the incumbent utility.”

Solar supporters counter that the costs of the traditional grid should fall with the rise of solar because utilities will eventually need fewer power plants and transmission lines.

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