Nevada Bill to Restore Net Metering for Rooftop Solar Passes the Senate

The Nevada State Senate voted unanimously in favor of legislation Sunday that's expected to revive the state's ailing rooftop solar market. The bill (AB 405) would reinstate net energy metering for residential solar projects, but at a discounted compensation rate.

AB 405 would immediately allow rooftop solar customers to be reimbursed for excess generation from a solar system at 95 percent of the retail electricity rate. Over time, though, customer compensation would decline. The amended bill would create tiers, where credit rates decrease in increments for every 80 megawatts of rooftop solar generation deployed — to a floor of 75 percent of the retail rate. A previous version of the bill lowered compensation in increments based on peak load.

If signed into law, AB 405 would also allow net metered customers to lock in their rate for at least 20 years, eliminating the risk that rates could change retroactively.

Rooftop solar advocates, including the Solar Energy Industries Association (SEIA), say the bill will reboot Nevada's rooftop solar market, which has been effectively stalled since a 2015 policy change.

“This bill is a compromise that doesn't fully value the benefits of distributed solar,” said Sean Gallagher, SEIA's vice president of state affairs, in a statement. “It will, however, allow Nevada consumers and small businesses who may have wanted to go solar, but found it uneconomic under the existing solar policies, to now proceed.”

“The legislation also provides important consumer protections, ensuring that solar customers aren't placed in discriminatory rate classes and giving customers 20 years of certainty when they sign up to go solar,” he added. “We believe that it will be able to get solar companies back to business in Nevada, creating jobs and investment.”

Changes in the legislature come nearly a year and a half after the Public Utilities Commission of Nevada (PUCN) voted to eliminate retail-rate net metering for new and existing solar customers in December 2015. State regulators originally planned to phase out net metering over four years, but later extended the timeline to 12-years. Amid ongoing public opposition, the PUCN decided to grandfather existing solar customers on their previous rates, but did not address the market for new solar customers.

Nevada lost more than 2,600 jobs after regulators eliminated net metering in late 2015. Major solar firms pulled out of the state, unable to make systems pencil.

“This is a victory hard won and a testament to the overwhelming support for rooftop solar in Nevada,” said Alex McDonough, Sunrun’s vice president of public policy. “Nevadans have made it clear they want the right to generate their own clean energy and they want the good jobs and clean air that go hand in hand with a thriving solar market … We look forward to Governor Sandoval signing AB 405 into law and appreciate his leadership in bringing rooftop solar back to Nevada.”

NV Energy, meanwhile, contends that restoring net metering would be very costly. The utility gave a presentation to the Senate last month that forecast AB 405 would cost more than $63 million each year, or about $1.3 billion over two decades.

The Nevada State Assembly passed an earlier version of AB 405 in a vote of 38-2 in late May. The Senate version now goes back to the Assembly, where members will need to approve the amendment — with just one day remaining in session — before it heads to the desk of Governor Brian Sandoval, who is likely to sign it. Sandoval put together an energy task force last year that recommended restoring net metering in 2017.