Nevada Energy Customers Should Not Subsidize Rooftop Solar

A proposal to equalize energy costs sparks opposition among those who think their energy consumption saves the planet.

Climate alarmists and the solar energy lobby are again making a fuss over attempts to make customers with solar panels pay their fair share to use Nevada’s power grid.

NV Energy, the state’s primary energy supplier, recently proposed shifting northern Nevada customers to a new rate plan to stabilize seasonal costs, make costs more fair for non-solar customers, and raise revenue for grid maintenance and capital projects.

The proposal would raise the fixed monthly service charge from $16.50 to $45.30 and lower the amount customers pay per kilowatt hour (kWh). It calculates the average residential customer would pay an additional $9.84. However, it expects falling natural gas prices to offset any real rate increase for at least the next two years.

In an email to customers, NV Energy CEO Doug Cannon said the change will “help average customers avoid large seasonal bill fluctuations that make budgeting for energy costs challenging.”

Read more: Eco-Activists Had $3.4 Billion in 2022 to Push Biden’s Green New Deal

Most importantly, the fixed-rate hike would offset subsidies non-solar energy consumers pay to customers with solar panels. The utility notes that Nevada’s non-solar energy customers currently subsidize solar customers by $7.8 million.

While overall rates must rise to meet the costs of new infrastructure required by the exploding population growth, solar customer will bear more of the brunt of those new cost. The new fixed service rate will cause costs to go up much more on solar customers than non-solar customers, forcing solar customers to finally contribute their fair share to Nevada’s energy expansion. The alternative to the higher fixed rate would be for costs to go much higher on non-solar customers through energy use hikes. So, overall, costs are going up. They have to. But the proposed structure would shift more of that to solar customers who have been enjoying a free ride.

For more than 25 years, Nevadan solar customers have benefitted from a generous net metering policy. Net metering unduly advantages solar customers by allowing them to sell back the excess energy they generate to the utility company at above-market rates. These customers benefit from the power grid by consuming non-renewable energy when the sun isn’t shining but pay little for its upkeep—which the utility passes to everyone else.

Even Kevin McGehee, a lobbyist for the Nevada Solar PAC, told News from the States that non-solar customers are subsidizing those with rooftop solar. He agrees that increasing the monthly service fee is a reasonable means to address the disparity.

Most climate alarmists and solar proponents, however, are trying to take advantage of the frustration that comes with any rate increase to mobilize opposition to the proposal. They argue it is crucial to wean the country off power sources that emit carbon dioxide. Climate alarmists view any solar subsidy reduction or fee increase as a threat to the environment and, for many, their bottom line. Some also argue that the shift will harm low-income customers who conserve energy to save money.

But using net metering as a sin tax to wean people off fossil fuels already disproportionately punishes low-income customers. Of the $18 billion the federal government doled out in clean energy tax credits from 2006-2016, 90 percent went to taxpayers in the top quintile, showing that most solar customers come from the upper classes. The working poor, therefore, had to either finance solar panels through debt or finance the wealthy’s free lunch through net metering.

Further, the lowered volumetric rate per kwh would free lower-income customers to use as much electricity as they need. The current regressive model forces the poor who can’t afford solar panels to subsidize the power grid for those who can—and to get by with less electricity to make ends meet.

Liberal Energy Policies Created A Need For More Revenue

Government meddling—driven by clean energy lobbyists—contributed to the situation that caused NV Energy to request rate hikes.

In February, NV Energy’s parent company, Sierra Pacific Power Co., filed a rate case to increase revenue by $95 million for operating and management costs. The Public Utilities Commission (PUC), which must approve any rate increases, estimates NV Energy’s proposed rate shift will raise revenue by $105.9 million.

But operation and management alone don’t account for the need for more revenue. As many Californians have fled high living costs and crime—caused by Sacramento’s liberal policies—Nevada’s population has exploded.

NV Energy filed a resource plan with the PUC on May 31 for a $5.3 billion proposal to help energy infrastructure keep up with the state’s growing population. This includes building three solar fields, two natural gas turbines, and new transmission infrastructure projects and upgrades.

But the overflow from California’s liberal politics isn’t all that drives up capital costs. Self-imposed regulations also force Nevada to increase its energy sources.

In 2013, the Nevada legislature voted to close all its coal-fired plants. The remaining coal-fired plants still provide 800 megawatts of power, which the utility will soon have to replace. Then, in 2019, the Nevada legislature set its Renewable Portfolio Standards (RPS) at 50 percent renewables by 2030 and a commitment to use 100 percent renewables by 2050. This too requires the state to invest in solar fields and battery storage facilities—hence the three solar fields included in NV Energy’s resource plan.

Nevada’s Subsidies Were Meant to Kickstart Solar—Not Subsidize It Forever

In 1997, Nevada began net metering at the electricity retail rate to help the solar industry enter the energy market.

As the rate of Nevada’s solar customers increased, so did the burden on non-solar customers to maintain the grid. By 2015, Nevada homeowners were spending $16 million yearly to subsidize 17,000 customers with solar panels on their roofs.

Nevada’s legislature passed a bill requiring the PUC to look at cost shifting to make the system more fair. In December 2015, the PUC reduced net metering from the retail rate to the wholesale rate. It also tripled the basic monthly solar service fee from $12.75 to $38.51 over 12 years. NV Energy estimated that the net metering change would save the company over $100 million over the 12-year phase-out. The rate changes prompted many solar customers to claim they would not have gone solar had they known this would happen.

Then-PUC Chairman Paul Thomsen countered that the state only intended the subsidy to kickstart the solar industry. After 18 years, he said, it was “time for the industry to stand on its own two feet.”

CNN’s John Sutter characterized the commission’s decision as a “war on solar” at a time when society needed “to wage war on climate change.”

Warren Buffett, whose Berkshire Hathaway owns NV Energy, argued that if the government viewed subsidizing solar as a sound policy, it should do so through taxpayers—not by forcing traditional energy customers to pay more to cover the slack. He characterized Nevada’s net metering policy as the 99 percent subsidizing the one percent.

After the PUC’s decision, multiple solar companies ceased operations in Nevada, and political pressure grew on the commission to change course. In February 2016, as the PUC considered grandfathering existing solar customers, activists leaked the Commissioners’ addresses online, and three protesters threatened to show up to the next public hearing armed—forcing its cancelation.

In 2017 Governor Brian Sandoval caved to activists’ demands and signed a law reversing the PUC’s 2015 decision. The law set a new rate of 95 percent of the retail price for energy sent back to the grid from solar panels, and it stipulated that the credit would decline overtime by seven percent for every 80 megawatts until it reached a floor rate of 75 percent of the retail rate.

Although the law improved on the pre-2015 net metering rate, it has maintained a grossly inequitable system over the past seven years for those who haven’t used solar panels.

Solar Energy Enjoys Economic and Ideological Advantages Without Net Metering

The solar industry already enjoys a societal advantage. Thanks to the climate change cult, tax credits and subsidies flow generously. The solar energy industry also enjoys an ideological advantage conferred on it by media and academia. These institutions reinforce the moral supremacy of those who buy and sell green energy products, which boosts sales for companies and provides votes for subsidies to consumers.

President Joe Biden’s signature legislative accomplishment, The Inflation Reduction Act (IRA)—a true misnomer—increased pork barrel spending to fight climate change. This includes raising the solar tax credit to 30 percent of installation costs and providing a $7 billion grant to the Environmental Protection Agency (EPA) to subsidize solar installation in low-income housing. Last month, the EPA awarded $156 million to the Nevada Clean Energy Fund—the highest amount per capita awarded to any state.

Proponents of this industrial climate policy understand the stakes posed by the November election. “If Trump is elected and the federal government takes a far more skeptical viewpoint of the climate problem,” frets Politico, “hundreds of billions of dollars in subsidies for clean energy technology could wither on the vine.”

Then, there is the ideological factor that solar enjoys.

According to Pew Research, 81 percent of those who have installed or are seriously considering installing solar panels cite saving the environment as a factor.

A solar customer in Mississippi who leased solar panels told MSNBC in 2022 that “it is such a tremendous feeling not only to be saving money but also saving the planet, as well, and doing our part in reducing carbon emissions.”

In a video entitled “Solar Industry 2023 State of the Union,” Jonathan Brunasso, Senior Energy Consultant for Powur Solar, sought to motivate his viewers to sell more solar panels by reminding them: “We’re in solar—we save the freaking planet!”

Although the partisan difference among those who have already installed solar panels is small, Pew found a wide gap between Republicans and Democrats who have seriously considered installing them. This shows that with the right subsidies, the solar industry stands to gain massively from a segment of the population pushed toward solar ideologically.

The Kabuki Theater of Green Energy Advocacy

The ideological shift this has on culture forces everyone—including utility companies—to start from the premise that fossil fuels are bad; renewables are good.

In April, NV Energy sought to mollify protestors of its proposed rate shift by releasing a statement, touting its closure of coal-fired plants and opening of new battery storage facilities. The statement also promises its detractors that electricity rates will fall over the following years, omitting that this is only because of cheap natural gas—an energy source the protesters oppose.

Such is the ironic cycle that climate alarmists’ lobbying success creates. Activists successfully lobby for more expensive energy sources to which they attach moral value. The utility company complies from legal necessity, but supply and demand force it to raise rates. To keep the wolves at bay when rates rise, the utility company touts its righteous green transition and points to lowered utility costs thanks to the one fossil fuel industry the activists have not yet killed.

Left-wing policies like RPS and an influx of new residents create a need in Nevada for power grid maintenance and energy source expansion. NV Energy’s proposal to raise revenue would balance these costs among solar and non-solar customers. This is not too much to ask considering the subsidies and tax breaks the government already gives the solar industry and its customers—plus the moral support from the country’s institutions that treat them like heroes doing their part to save the earth from extinction.

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