Despite grandfathering, PUC rooftop solar panel rates still dampen innovation

While it is good to read that the Nevada Public Utilities Commission has reversed course and decided to grandfather the rates for existing rooftop solar panel owners, what is the future for home-based power generation?

Anyone contemplating installing such panels in the future still will face the much higher connection fees and much lower reimbursement for electricity uploaded to the grid. Though there is still that 30 percent federal tax credit, the chances of new solar installation ever providing a return on investment is nil.

The utility power companies in Nevada don’t want you to cut the cord. The rate schedule is an anti-innovation stance.

It is like taxing the oil well drillers to protect the whale oil industry.

If the market is to work, there ought to be a foreseeable avenue by which a savvy homeowner could put up solar panels and windmills, invest in batteries and hydrogen-powered fuel cells or other generators, as well as efficient appliances, to become free of the grid. But the disincentives created by the PUC make that a pipe dream.

The higher connection fee is ludicrous. There is no difference between generating your own power and simply being frugal by turning up the thermostat in the summer. As for the lower reimbursement rate for uploaded power, the PUC fails to take into account the power is uploaded during peak demand time when the power company must pay three or four times more on the open market and there is no transmission line cost or ohms drop.

Maybe there should have been a fee charged to those buying new fangled refrigerators to protect the job of the ice delivery man.

Backyard solar panels

Backyard solar panels



6 comments on “Despite grandfathering, PUC rooftop solar panel rates still dampen innovation

  1. Rincon says:

    I’m sure that you don’t approve of the 30% tax credit, which probably significantly offsets the disincentive by the electric company. Would it be reasonable to suggest that we get rid of the tax credit and have the electric company pay wholesale electric rates for uploaded power and eliminate the higher connection fees?

    There is still an open question though. If the electric company in the future, needs to pay for a peaker plant because there’s so much rooftop solar around, who should pay for it?

  2. Customers.

    NV Energy calculates that solar panel owners were avoiding paying their fair share of infrastructure costs — to the tune of about $52 a month.

    But solar panel installer SolarCity and the Natural Resources Defense Council calculate that rooftop solar provides a net benefit to all Nevadans of 1.6 cents per kilowatt-hour in actual costs and as much as 3.4 cents per kWh if you include benefits to the environment, which is admittedly hard to calculate.

    The report by Brookings also notes that a 2014 study prepared for the Nevada Public Utilities Commission found that net metering provided $36 million in benefits to all NV Energy customers and over the 25-year lifetime of the panels the net benefit amounted to $166 million — just for the ones installed so far.

    A 2015 study from Maine said the value of rooftop solar was $0.33 per kWh compared to the average retail price of $0.13 per kWh. “The study concludes that solar power provides a substantial public benefit because it reduces electricity prices due to the displacement of more expensive power sources …” Brookings concluded.

    The report goes on to list numerous other studies that found solar panels benefited power customers in general rather than being a drain.

  3. Bill says:

    Appropo of solar, If you check out the link below, it would seem in one of those brilliant government decisions the powers hat be decided paying $82,000 to gain a savings of $3,000 per year makes economic sense. Perhaps I’m missing something here. What is it?

  4. Steve says:

    A 30 year ROI, bureaucratically inspired, investment!

    Open the bank account, deposits will begin 2046!

  5. rincon says:

    I never thought I would see you argue that solar power is cost effective. Welcome to the liberal fold.

  6. Steve says:

    Rincon, Tom Mitchell installed solar way back in the day when the tax incentives made it a good decision to do so.
    Changing the rates took that all away from him (and everyone else who made that same decision) and made it impossible to ROI.

    Under current rates, grid tie for both residential and business will never ROI.

    I have stated many times, solar PV only pays off when used to remove devices (or even complete buildings) from the grid. But that payoff actually ROI’s several years after the estimated life span of the panels!

    All told, some good long term investments with an equal amount of money will pay for grid power well into the future.

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