Why did SolarCity and Sunrun jump ship?
By Jim Vess
In the last few weeks, SolarCity, one of the largest providers of rooftop solar in the nation, has halted the sale and installation of rooftop solar panels and has laid off more than 550 employees in Nevada. The company plans to keep some employees in the state to service existing customers. The company will also close three warehouses in Henderson, North Las Vegas and Reno.
SolarCity also began dismantling a Las Vegas training center on Tuesday. The center opened last November to train employees from Nevada, Colorado, Texas and Arizona. For now, the company plans to keep its Las Vegas headquarters open, which includes a service center for which the company received up to $1.2 million in state economic development funding in 2013.
On January 8th, Sunrun announced that it has ceased all operations in Nevada, which will result in hundreds of job losses. Sunrun expects that local installation companies it has partnered with will be forced either to perform layoffs or to close their doors entirely.
Vivant Solar left Nevada when the state’s net metering cap was reached in August, 2015, which temporarily halted solar installations.
So why are major residential solar providers bailing out of Nevada? It’s in response to the Nevada Public Utilities Commission’s (PUC) approval of new net metering rates. The new rates would retroactively apply to all solar customers. The PUC created a separate rate class for all small commercial and residential net metering customers and added a time-of-use pricing option for all. The new rates include an increase in fixed charges and a decrease in the volumetric commodity charge designed to better recoup costs from net metering customers.
Under the new rates, the fixed monthly fee will go from $12.75 up to $17.90 for 2016 and by 2020, the fee will rise to $38.51. Solar customers had been reimbursed about 11 cents per kilowatt-hour for the excess energy returned to the grid. That was cut to about 9 cents and will drop to 2.6 cents in 2020.
Sunrun noted in a press release, “On January 1, 2016, the PUC adopted rules that are more averse to solar customers than those publicly proposed by NV Energy. The new rules will block thousands of homeowners from choosing clean, affordable electricity, ending the only chance Nevadans had at enjoying choice and competition in electric energy. The rules also undermine the investments of the approximately 16,000 existing solar customers in the state. The reduction or outright elimination of savings for these existing customers was proposed by Commission Staff, who said in testimony that they neither conducted analysis of the retroactive impact on existing customers nor analyzed the impact it would have on future investment in Nevada.”
The future of rooftop solar in Nevada has been contentious since state regulators were asked by state lawmakers to decide on a new rate for net metering customers. The issue has pitted the rooftop solar industry and its allies against NV Energy. Rooftop-solar industry officials believe that the new rates will kill the industry and its 6,000 Nevada jobs. NV Energy argues the previous policy required non-solar ratepayers to subsidize rooftop solar customers.
Whatever the case may be, the new rates imposed by the PUC and the quick exodus of rooftop solar providers could spell the end of the rooftop solar industry as we know it in Nevada. Both sides need to work together to come up with a solution that is good for everyone.
In the meantime, it’s all those laid-off workers who are really paying the price.