The one law the Nevada Legislature manages to pass every session is the Law of Unintended Consequences. Thus it is with its ongoing and pervasive attempts to micromanage the state’s electric power grid — acts that may unleash unanticipated disruptive forces — as reported in this week’s column, available online at The Ely Times and the Elko Daily Free Press.
Since 1997 when the Legislature first approved a renewable portfolio standard (RPS) — which now mandates 25 percent of the state’s electricity come from renewable sources such as solar, wind, geothermal and biomass by 2025 — lawmakers have been crafting various schemes to dictate just what the power grid will look like decades from now.
Not only are there mandates, subsidies, tax breaks, incentives and federal land giveaways for those mammoth solar and wind farms, but similar giveaways are being offered for what the industry calls distributed energy resources (DER). These are primarily solar panels on the rooftops of homes, businesses and government buildings, as well as a few windmills.
By law, these distributive energy resources are tied into the NV Energy grid and their power generation is accounted for by “net metering,” which how much power was generated by the DER, how much was uploaded to the grid and how much was downloaded from the grid.
Such installations qualify for various subsidies and rebates, many funded by NV Energy’s ratepayers, that can cover as much as half or more of the cost of the installation, most of which are also exempt from property and sales taxes in Nevada. In a perverse way, the non-DER-using ratepayers are paying to allow DER-using customers to reduce their power bills.
This legislative meddling might have consequences undreamed of by lawmakers and regulators.
When the courts in the mid-1980s broke up Ma Bell’s monopoly and created regional Baby Bells, little did anyone anticipate then that technology would have done the job. Technical breakthroughs changed the way Americans communicate — cellphones, fiber optics, the Internet. Landlines are nearing obsolescence.
A report prepared for the Edison Electric Institute, an association of American shareholder-owned electric utilities, warns those shareholders that renewable DERs, if combined with breakthroughs in technology and the government-dictated distortion of the market, could face a similar outcome.
“Due to the variable nature of renewable DER, there is a perception that customers will always need to remain on the grid,” the January white paper says, noting the obvious fact solar panels work only so long as the sun shines. “While we would expect customers to remain on the grid until a fully viable and economic distributed non-variable resource is available, one can imagine a day when battery storage technology or micro turbines could allow customers to be electric grid independent. To put this into perspective, who would have believed 10 years ago that traditional wire line telephone customers could economically ‘cut the cord?’”
The free market and technology could better plot the future of the electric power market, but the central planners in the Nevada Legislature think they are omniscient and omnipotent.
As if on cue, The Wall Street Journal is out today with a feature story on what it calls net-zero energy homes around the country and calls them a growing trend.
“Green” housing accounted for 20 percent of all new homes built this past year, the paper quotes McGraw Hill Construction as saying.
“So far, net-zero houses are only a fraction of the green residential movement, but other environmental features are becoming widespread. The government is fueling the trend with federal tax credits for things like insulation that reduces a home’s energy loss or geothermal heat pumps. Depending on where they live, homeowners can also claim rebates from their state, town or utility,” WSJ reports. (See above)
The paper said net-zero homes cost between 5 and 10 percent more to build, though one company reports it is building a five-bedroom, net-zero house that costs only 2 percent more.
The primary reason for the growing demand for net-zero houses, home builders told WSJ, is a desire to cut utility bills, but also to counter future future energy costs and to become independent from the grid.
This is an animated rendering by a team of UNLV students called DesertSol. It is a net-zero energy vacation home and will compete in the U.S. Department of Energy Solar Decathlon this year:
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