Sunny Nevada Just Killed the Solar Industry with 40% Tax Hike, Derailing the Off-Grid Movement

While Nevadans were celebrating the holidays under solar-powered lights, the Nevada Public Utilities Commission (PUC) voted unanimously to increase a monthly fee on solar customers by 40% while reducing the amount they get paid for excess power sold to the grid. Adding insult to injury, they made the rate changes retroactive, sabotaging consumer investments in solar energy.

This single move by government regulators will effectively kill the solar industry in Nevada and put an end to the surge of people seeking to detach from the grid by harnessing their own energy from the sun. Just as importantly, it serves to protect the profits of Nevada’s public utility company, NV Energy.

“It will destroy the rooftop solar industry in one of the states with the most sunshine…There is so much wrong with the decision,” said SolarCity CEO Lydon Rive. “The one beneficiary of this decision would be NV Energy, whose monopoly will have been protected.”

Two major solar companies, SolarCity and Sunrun, have already left the state, causing upwards of a thousand job cuts. Many more renewable energy jobs are at stake. Solar industry supporters and workers are planning to protest the new rates at a rally in Carson City and Las Vegas, as industry and public outcry may force regulators to reconsider their decision.

One Nevada resident wrote in the Las Vegas Sun that she feels “financially ambushed” after tapping into their retirement savings to become a solar household. Before the rate change, the system would have paid for itself in 14 years, but now that will never happen.

“With the new pricing for [net metering] customers, the value or price of the energy they produce will be vastly reduced. In addition, the flat service charge for NEM customers will rise to three times that charged to nonsolar residential customers, a kind of penalty for producing much of our own electricity. The people with solar on their homes feel cheated; solar businesses are closing or leaving.”

NV Energy—a regulated monopoly with an “authorized rate of return”—is unabashed in saying that the surge in renewable energy is cutting into their profits. Last year the company, owned by Warren Buffett’s Berkshire Hathaway, got Sen. Patricia Farley to draft the amendment that shifted the state’s net metering over to the PUC. In their view, solar customers “don’t pay their fair share to maintain the grid.”

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With the rate changes, Nevada regulators are demonstrating the willingness and ease with which government can neutralize the “off-grid” movement while protecting their favorite utilities. Rooftop solar, along with innovations such as Tesla’s Powerwall, represents a huge opportunity for people to free themselves from an energy structure ruled by corporations and state co-conspirators.

Residential solar customers are not the only threat to the profits of NV Energy.

“A consortium of casinos and businesses is looking to leave NV Energy’s grid and start generating their own power, saying they’re being placed at a competitive disadvantage because they’re paying more for energy than their business rivals in nearby states. The state Public Utilities Commission has said it would charge hefty fees — $27 million in the case of Las Vegas data center Switch — to let industrial ratepayers leave the system.”

The fight between NV Energy and the solar industry may be a microcosm of a larger struggle involving the fossil fuel industry. The American Energy Alliance, a fossil fuel advocacy organization backed by the infamous Koch brothers, applauded the Nevada decision as a matter of national policy. They are pushing efforts in other states to curtail the rise of solar energy.

In this vein, the outcome of Nevada’s situation could have implications far beyond that state.

“Nevada could set a precedent for other states, Hugh Wynne, an analyst at Sanford C. Bernstein & Co., wrote in note Tuesday. Regulators across the country are grappling with how to spur the development of clean energy sources while ensuring operators can collect enough money to maintain and update their grids. – Bloomberg News

The question must be asked, why does government protect the status quo? Why is it assumed that existing utility operators must be preserved in this rapidly changing energy landscape? Instead, consider that old utility grids are no longer applicable in the 21st century.

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This is a pivotal moment in the evolution of the energy paradigm. We have the ability to leave behind the dirty, corrupt legacy of fossil fuels and enter an era of localized, renewable energy. As The Free Thought Project reported in November, within 25 years we could have a complete energy transformation, as the cost of renewables declines and technology advances exponentially. Rooftop solar and localized systems will lead the revolution.

In order to achieve this, we must break from the grip of those who would keep us in the dark ages to satiate their thirst for power and wealth.

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Justin Gardner is a peaceful free-thinker with a background in the biological sciences. He is interested in bringing rationality back into the national discourse, and independent journalism as a challenge to the status quo. Gardner finds inspiration in the garden and people who promote peace and goodwill to all life.