Nevada reversal: solar earnings rate drops from 12c to 2c — May “destroy rooftop solar power”

If only solar generation was affordable?

In Nevada there is a lot of sunlight and a lot of solar panels, but they generate electricity at a cost of 25 – 30c per kWhr. With subsidies and tax benefits, the cost “falls” to 15c. (In this context, the word “falls” means “is dropped on other people”.) But the retail rate for electricity is 12.5c. So having solar panels doesn’t help you much unless you can sell that excess electricity, which the state of Nevada was buying at 12.5c. That price sounds fine and dandy til we find out that they could have bought the same electricity at wholesale rate of around two cents.

So Nevada has decided that’s what the state will pay… 2c, not 12.5c. The latest decision is to apply normal free market rules. Nevada will now pay wholesale rates for electricity. No more shopping for boutique electrons.

Taking into account all the tax cuts, subsidies and total costs, who would have thought that paying 15 times the wholesale rate for electricity would be economically unsustainable?

Battles Over Net Metering Cloud the Future of Rooftop Solar

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. Claiming 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.

Naturally, this has been a campaign by utility companies. Residents would not be expected to protest against high electricity prices.

Not surprisingly, the solar industry disagrees. Calling the net metering decision “unethical, unprecedented, and possibly unlawful,” SolarCity CEO Lyndon Rive predicted that it will “destroy the rooftop solar industry in one of the states with the most sunshine.”

Rive missed how people who want fair market rates for solar power are not just unethical, and unlawful, but ugly selfish and funded by fossils. Listen to Leonardo, whatever you do, don’t date them.

Events in Nevada, though, could signal a major reshaping of the eonomics 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 to 30 cents per kilowatt-hour.

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