Nevada’s New Solar Law Is About Much More Than Net Metering

Nevada Governor Brian Sandoval signed Assembly Bill 405into law to the cheers of solar companies and advocates. AB 405 reinstates net metering for rooftop solar customers in Nevada, after utility regulators eliminated the policy in December 2015, throwing the Silver State’s solar market into disarray. Because the policy change was applied retroactively, it triggered enormous public outcry, and the steep new fees effectively put a freeze on new rooftop solar installations. Nevada saw a 32 percent decline in solar jobs last year after large residential installers chose to pull out of the state. But with the new law now in place, Tesla, Sunrun and Vivint Solar said they plan to resume sales immediately. Under the new law, new solar customers will immediately begin to be reimbursed for the excess energy they generate at 95 percent of the retail electricity rate. The credit is scheduled to decline in 7 percent increments for every 80 megawatts of rooftop solar deployed, to a floor of 75 percent of the retail rate. The discounted compensation rates are designed to ensure that solar customers pay their fair share to use the power grid as solar penetration increases, but still leave a lot of room for growth. The 80-megawatt threshold for each credit tier is significant. In Nevada's biggest year, before the net metering policy changed, the state deployed around 100 megawatts of residential solar. Assuming the market booms again, it will likely still take around four years to get to 75 percent of the retail rate. And even at 75 percent, net metering compensation still looks economically appealing. The passage of AB 405 marks the first time in U.S. history that consumers have been statutorily guaranteed the right to self-generate electricity, said Wellinghoff, who helped craft portions of the bill in his new role as an independent policy consultant. Under Section 24 of the bill, consumers are granted the right to generate their own electricity and offset their own internal usage one-for-one at the full retail rate, in the same way they can install energy efficient light bulbs or appliances and save energy at the retail rate. Whatever energy you no longer take from the grid, you don’t have to pay for.