Lower incentives more consistent with neighboring states, says NV Energy
7/1/13: Last week the Public Utilities Commission of Nevada (PUCN) approved lower incentive levels for the popular Solar Generations program administered by NV Energy. In Solar Generations, homeowners, small businesses, public and private schools, and public facilities that install solar panels on their property to generate electricity are paid incentives for the installation based on the size of the system. The property owners also sign up for net metering with NV Energy (* See note below for a definition of net metering). Solar Generations, established by the Nevada Legislature in 2003, is funded through 2025 with a bill rider on NV Energy customers’ bills.
The program has been immensely popular, so much so that each annual offering of program capacity is oversubscribed by 500 to 1,000%. The utility uses a lottery system to choose which applicants will receive the incentive.
NV Energy told the PUCN that lowering the incentive levels would make demand for the program balance more with supply The utility also argued that lower incentive levels would align more with those in neighboring states, and that the fact that “many” Nevada property owners are installing solar PV without taking part in Solar Generations shows that lower incentive levels will not dramatically limit or halt the market for future installations.
Solar developers argued for keeping the incentive levels at their current level and releasing three years of supply at once as a way to meet the pent-up demand, but the PUCN agreed with the utility in setting the smaller incentives instead.
The PUCN approved incentives of $1 per watt for schools and public facilities, and $0.50 per watt for residences and small businesses. Formerly, the incentives were $2.80 per watt for schools and public facilities, and $1.35 per watt for residences and businesses.
The effect of AB 428
AB 428, passed in the 2013 state legislative session, makes several changes to the Renewable Generations programs. The principal change will be that for larger systems, the incentive payments will be based on the performance of the installed system – how many kilowatt hours are actually generated – rather than on the designed kilowatt capacity of the system. Some systems might not perform at levels that make it worth the public investment – shady roofs for example, or solar panels on an unoccupied structure – but the current upfront incentive based on the installed capacity of the system cannot take this into account. With performance-based incentives, the owner/operator is paid based on the kilowatt hours of electricity actually produced by the renewable energy system on their property.
The PUCN acknowledged that changes to the Wind, Solar and Waterpower Generations programs must be made in accordance with AB428 when it goes into effect in January, 2014, but opted to set the new incentive levels for the period up until then so the program is not disrupted. Rulemaking to implement AB 428 will take place over the next few months.
*Net metering is when the customer/generator’s electrical meter measures both the electricity that is generated on the property and put into the electrical grid, and the electricity that comes from the grid into the customer’s property. The amount generated onsite is subtracted from the amount that comes to the property from the grid, and the customer is only billed for the difference – or the net – hence the name.