Nevada net metering breakthrough: Compromise struck in AB 405

Nearly two years after the Nevada Public Utilities Commission (PUC) inexplicably decided, in the words of some rooftop solar installers at the time, declare war on rooftop solar by slashing its net metering rates like a common Jason of Friday the 13th fame, the state’s Assembly and rooftop-solar advocates may be close to signing an official peace treaty.

Assembly Bill 405, which overwhelmingly passed the Assembly’s  Commerce and Labor Committee (CLC) on a 12-2 vote, will now move to the full Assembly.

The bill establishes a “Net Metering Adjustment Charge” that reimburses rooftop-solar customers for excess solar credits at 95% of the retail rate up to 6% of historic peak electricity load, which for 2016 was approximately 8 GW in the bill. The phrase “historic peak energy load” is defined as when the state’s energy needs peaked during any calendar year.  At 95%, the bill nearly restores full net metering, which historically has reimbursed solar users at the full retail rate for the excess electricity they export to the grid.

To get it out of committee, the bill was amended to merge the current reimbursement rates into a new tiered system, tethered to the retail rate of electricity calculated on the overall penetration of rooftop solar in the state.

The remaining tiers would be set at the following rates:

  • 90% between 6 to 8% of historic peak load
  • 85% between eight to 10% of historic peak load
  • 80% over 10% of historic peak load

Members of the rooftop industry hailed the bill as an enormous victory and are anxious to get back to business. After the two years of uncertainty and ever-changing PUC policies left the industry in deep distress and despair, the current installed capacity of rooftop solar in Nevada is hovering around 2% – but if the bill passes the Assembly, the Senate and is signed into law by Gov. Brian Sandoval, installers expect that to change quickly.

For reasons that are still not entirely clear – even to people at the heart of the fight, the Assembly directed the PUC to cut the net metering rate precipitously and without warning, throwing customers and installers into a state of suspended animation. The rate reductions extended solar’s payback time beyond what many rooftop customers were willing to accept and reducing its economic raison d’etre. That, in turn, affected the installers that had customers lined up for installations. With the diminished economic incentive, many of those projects dried up.