How Nevada Turned Off the Sun

State Residents Say Farewell to Energy, Hello to Buffett

NorthWest Wing | Amir Dif | March 31, 2016

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The Greeks hailed Apollo as the sun god, and the Ancient Egyptians had Ra, and the Aztecs had Tonatiuh. Nevada is just saying nah.

Recent regulatory decisions made by the Nevada Public Utilities Commission have pushed SolarCity (one of the largest solar panel providers in the country) out of Nevada. This will potentially cost the state thousands of jobs. SolarCity, owned and chaired by Tesla founder Elon Musk, operates in 18 different states and services over 160,000 households. The deal they offer customers goes as follows: if you lease their solar panels for 20 years or more, you don’t have to pay any money down. These upfront fees are traditionally monstrous without the help of SolarCity, costing anywhere from $25,000 to $35,000 in most areas, so it’s a pretty sunny deal for consumers.

One lasting issue with solar energy has persisted: panels produce excess energy throughout the day, which usually just goes to waste. To solve this, Nevada has a system in place called “net-metering”. Essentially, net-metering allows solar panel users to sell their excess power to utility companies at a fixed rate. Along with net-metering, the federal government also offers a 30% investment tax credit, subsidizing the cost of installation. In return, all households (even those that are solar powered!) pay a fixed monthly fee simply for being connected to the grid. Net-metering is common practice in the world of solar energy, with over 40 states taking part in it.

“One lasting issue with solar energy has persisted: panels produce excess energy throughout the day, which usually just goes to waste.”

Solar has been gaining popularity in America despite the costs, all at the pain of large energy utility companies. Currently, solar energy employs close to 290,000 people throughout the country.

NV Energy HQ, Las Vegas | Source: Wikimedia Commons
NV Energy HQ, Las Vegas | Source: Wikimedia Commons

Enter NV Energy, Northern and Southern Nevada’s utility provider, wholly owned by Berkshire Hathaway.

If the name Berkshire Hathaway sounds familiar, it’s because it is owned by none other than Warren Buffett—AKA, the 3rd richest man on the planet. Warren Buffett says that owning utility companies isn’t meant to make him rich, but to “keep him rich”.

The new regulations made by the Utilities Commission states that NV Energy will now pay less for the energy it buys from solar panel users, and users will begin to pay a larger monthly service fee.

“Currently, solar energy employs close to 290,000 people throughout the country.”

By the numbers, NV Energy will now pay 9 cents per kilowatt/hour, as opposed to the current 11 cents. By the beginning of 2020, they will only pay 2.6 cents. The monthly service fee is going to increase from $12.75 to $17.90, and then it will increase again to $38.51 by 2020. These numbers seem small, but they make the economics of leasing solar panels completely obsolete, and drive clean energy out of business.

The absurdity of the situation is illuminated when considering just how great of a deal NV Energy was already getting. Sure, solar energy takes some of its market share, but net-metering means that it has to do less work to meet renewable energy requirements it prides itself on. As usual, however, profit machines will always search for more.

Brian Sandoval
Governor Brian Sandoval | Source: Wikimedia Commons

These measures are simply a pill that consumers and companies alike can’t swallow. SolarCity, the largest provider in the state is completely abandoning Nevada. SolarCity released a statement claiming that it has eliminated over 550 jobs, but plans to “relocate affected employees to business-friendly states” where possible. Furthermore, SolarCity calls the new practices “callous” and questions “whether the state would ever place the financial security of regular citizens above the financial interests of NV Energy”. Solarcity is joined by another major player in the industry in the fight against the new laws, SunRun. Recently, SunRun filed a lawsuit against Governor Brian Sandoval for breaching Nevada law by impeding the diversification of energy resources in the state.

“There regulations…set a dangerous precedent for how much power companies are allowed to wield in public office.”

Even actor Mark Ruffalo felt ruffled by the new decisions. At a protest against the Utility Commission, he railed against the industry, calling it the “Anti-Robin Hood”. That’s not looking like such a great Yelp review.

No matter what, these regulations raise serious questions and concerns about the future of clean energy in America. It sets a dangerous precedent for how much power companies are allowed to wield in public office. These decisions disregard the wishes of the people, and force them into a largely unpleasant scenario in the financial interest of a corporation. To call this the free market at work would be just as manipulative as NV Energy and all the other companies that seem to have a monopoly on governance.