Energy News: Renewables
Sunny Days Ahead for Solar in Nevada Industry Thrives on Strong Economic Growth
By Jeanne Lauf-Walpole
Although the solar energy industry in Nevada has seen its shares of ups and downs in recent years, renewable energy experts say it’s back on track as one of the brightest aspects of the continuing economic growth of the Silver State. “Nevada is a real success story. Prices keep going lower and we’re seeing more big customers,” says Dr. Karen Wayland, executive director of Clean Energy Project. “Prices are changing so rapidly and coal plants and nuclear plants can’t compete anymore.”
Back in 2015, however, the future of the industry dimmed significantly when the state’s Public Utilities Commission (PUC) tripled the fixed charges solar customers would pay and also reduced by three-fourths the credit they would get for net metering. Recognized as a major incentive for the growth of the solar industry, net metering allows solar customers to receive credit for putting their excess energy back into the grid. “Net metering has been a really powerful tool for both business and residential customers,” says Sean Gallagher, vice president of state affairs for Solar Energy Industries Association (SEIA).
As a result of the PUC’s actions, Nevada’s thriving solar industry quickly began to spiral downward. Major installers, such as Sunrun and SolarCity, severely curtailed their operations and solar customers filed a class-action suit against the state’s major utility, NV Energy. In addition, solar advocacy groups launched a campaign to have the decisions overturned while the PUC continued to justify its actions as necessary in order to make solar customers pay their fair share for using the grid.
Fortunately for the industry, however, this firestorm of protest caught the attention of Nevada lawmakers during the 2017 session of the state legislature. They reinstated net metering and also passed a Solar Bill of Rights to further protect solar customers. Rooftop solar customers can now be reimbursed at 95 percent of the retail electricity rate for their excess generation and can lock in a rate for 20 years when they sign up. Over time, the 95 percent rate will decline to 75.
Since the passage of these laws, the industry has been in recovery. “All of the companies that left have restarted business in Nevada. We’re seeing nice growth now. I think our economy is on a great trajectory now and many of the companies moving here want 100 percent renewables,” says Rebecca Wagner, owner of Wagner Strategies.
As new construction pops up all over the Silver State, Nevadans are happy that the economy seems to be on the uptick once again. “The economy is doing great. The biggest plusses we have are a lot of developable land, a structured business climate, a great physical environment to live in and a good business climate,” says Jason Geddes, energy and sustainability manager for the Washoe County School District. Although he’s bullish on the general economy, he’s not as comfortable with the pace of growth in the solar industry, however. “I haven’t seen sales and installations rebound as they should,” he says. He acknowledges that even though the industry hasn’t completely recovered yet, a least it’s moving in the right direction.
Solar power continues to claim an increasing percent of electric generating capacity all over the country, according to SEIA. Between 2015 and the end of 2017, the industry more than doubled its installed capacity in the United States, going from 25 gigawatts (GW) to 53.3. Solar represents 30 percent of all the new electric generating capacity brought online last year, second to natural gas. Solar advocates expect it to take over the number one spot in the very near future. “Solar deployment has exploded over the past couple of years. We’re moving into a new phase,” Gallagher says. “The jobs numbers have increased over the years. We have more workers in solar than in the coal industry.”
Nevada continues to be in the forefront of the solar industry, ranking fourth in the country based on the cumulative amount of solar electric capacity installed through last year. Home to 124 solar companies, the state boasts about deriving 11 percent of its total electricity from solar and having 425,941 homes powered by the sun.
Although the somewhat humble beginnings of Nevada’s solar largely involved individual rooftop residential installations, the industry is now maturing to encompass large commercial projects, such as Apple, General Growth Properties and IKEA. Large photovoltaic projects include Copper Mountain 3 in Boulder City, which has the capacity to power more than 40,000 homes and Crescent Dunes Solar Energy Project in Tonopah, which can power more than 18,000 residences.
Once perceived as exotic, expensive and even kooky, renewable energy has grown to have wide acceptance. As more people understand its advantages, they expect it to be available as one of their choices for energy. “Green energy is not a partisan issue but something that just makes sense for Nevada. We’ve come a long way and it’s great for our state. I’m not hearing a lot of anti-renewable sentiment,” Wagner says. Naturally it also helps that the cost of solar in Nevada has plummeted by 55 percent in the past five years. “It should appeal to everyone especially since it’s cost-effective,” she says.
Although the industry is riding high due to a strong and increasingly diverse economy along with lower costs, growing demand and innovative technologies, the future appears somewhat murky because of the unknown impact of federal and state regulatory issues. “The biggest obstacle is uncertainty,” Geddes says.
One of the biggest uncertainties is Ballot Question 3: The Energy Choice Initiative which will appear on the State of Nevada ballot this fall. It was approved by voters in 2016 and if passed again will amend the state constitution to end NV Energy’s monopoly on utilities. The policy states that “electricity markets be open and competitive so that all electricity customers are afforded meaningful choice among different providers, and that economic and regulatory burdens be minimized in order to promote competition and choices in the electric energy market.” Geddes says it’s hard to tell if it will pass or not since opponents, such as NV Energy and several unions, have mounted a concerted effort to defeat it this time around. He says the uncertainty of not knowing what will happen has kept the solar market from rebounding as it should.
Wayland says it’s also important to provide equal access to various kinds of energy. “Another issue is having the same access for everyone, such as lower income people. Equal access to cheap solar power is a big hurdle,” she says.
Despite the unpredictability of Nevada voters, it appears from recent legislative activity that the Nevada State Legislature is very supportive of green energy. Eleven utility bills were passed during the 2017 session although two were vetoed by the governor. The new laws include the following:
*SB407—establishes the Nevada Clean Energy Fund to increase the amount and pace of funding for qualified clean energy projects.
*SB145—establishes a program for payment of incentives for installation of certain energy storage systems.
*AB5—provides for creation by local government of a local improvement district that includes an energy efficiency improvement project or a renewable energy project.
*AB223—requires electric utilities to file a plan that includes energy efficiency and conservation programs directed to low-income customers.
With all this activity at the state level, it appears that going green is a politically savvy move for politicians in Nevada.
Like lawmakers in Carson City, Nevada’s gang of six in Washington, D.C. is also known to be supporters of clean renewable energy. “Our congressional delegation is aware that solar is important to the state,” Wagner says. Green energy proponents in Nevada are grateful to have a cheering squad in Congress that can advocate for helpful legislation as well as provide protection from harmful laws.
In spite of having an eco-friendly congressional delegation, however, additional uncertainty has been caused by the tariffs recently imposed by President Trump on imported solar panels. Starting at 30 percent and gradually dropping to 15 percent, the tariffs have been approved for four years. Raising the cost of cheap imported panels is supposed to level the playing field for domestic manufacturers. Some solar companies, such as Suniva and SolarWorld Americas, are supportive of the tariffs, saying that the low-cost imported panels have been very harmful to U.S. manufacturers. About 95 percent of the panels used in the U.S. come from other countries.
Not everyone is supportive of the tariffs, however, since they believe anything that raises the cost will ultimately have a negative impact on the solar industry. “The President’s new tariff puts targets on the backs of large and small solar companies that have provided thousands of jobs, cut emissions and diversified power sources in Nevada. It is a de facto tax on consumers and a major obstacle for new clean energy developments across the nation,” says Congresswoman Dina Titus in a prepared statement.
Gallagher agrees that the tariffs could have a chilling affect on the growth of the solar industry, saying that they could cause a reduction of as much as 13 percent in development. “It will cost American jobs,” he says.
Although the full impact is not known yet, those involved in the industry are getting used to the reality of the additional cost. “I think the reaction I get from a number of people is that it’s not as bad as they think it could be. It’s different for developers and manufacturers,” Wagner says.
Another concern on the national front is HR 4476, also known as the PURPA Modernization Act of 2017 which proposes to amend the original Public Utility Regulatory Act of 1978 (PURPA). Proponents of the bill say it’s needed to allow contracts to more accurately reflect fluctuating electricity prices. Opponents
say passage will make it more difficult for independent renewable energy developers to compete with large electric utilities.
As energy experts look to the future, the general consensus seems to be one of optimism as the solar industry continues to grow despite hiccups along the way. Wayland doesn’t seem overly concerned about possible negative impacts from Washington, D.C. “I don’t think Congress is going to do much on renewable energy,” she says. “I don’t think the tariffs are significant enough to have an effect. If trade wars escalate, we could see manufacturing coming back.”
Wagner says the type and speed of growth for solar will depend on the outcome of the 2018 election. Even though the situation will be different after the votes are counted, she remains upbeat about the future of renewables. “I don’t see any doom and gloom in the future,” she says.