Paying Solar’s Fair Share

New changes are going into effect for NV Energy’s net metering customers, mostly those with solar electric systems on their homes. I’ve received several calls about a letter that NV Energy sent out last week that outlines changes to the way certain fees will be assessed. The changes are a result of the passage of Nevada Assembly Bill 428.

For those who are not familiar with net metering, it is simply a way to account for locally-produced electrical energy, by a solar array on the roof of one’s home for example, by crediting the homeowner for the energy they send to the grid.

What’s Net Metering?

Many states have net-metering laws in place and they can differ substantially. In Nevada, it is fairly straightforward. Our power bills are based on units of electrical energy called a kilowatt-hour or KWH. Every KWH that a net-metered system sends out to NV Energy’s grid results in an equivalent credit that can be used to offset energy that the customer draws from the grid (at night for example). A properly-sized system can eliminate all charges for electricity.

All NV Energy customers, including those with net-metering, pay a basic service charge. Additional tariffs include fees for programs and services that are levied as a percentage of energy used, thus net-metering customers with a zero net balance paid only the service charge plus 5% tax.

Starting in May, those same additional tariffs will be levied on the amount of energy delivered to the homes of net-metering customers, regardless of the amount of energy the customer provides back to the utility.

Paying Solar’s Fair Share

The intent is for net-metering customers to pay their fair share of these fees. I think paying one’s fair share is a great principle that should be applied in every case. The additional charges should only amount to a few dollars per month. But if fairness is important, there are other issues to consider.

First is the fact that most net-metered customers have chosen to make an investment in our future. Those clean-energy systems benefit the grid by reducing demand during peak usage at a time when electricity costs can soar much higher, a fact that is not reflected in Nevada’s net-metering system. A fair system would account for the true value of the energy at the time it is being sent to the grid, otherwise it is an unfair burden on the net-metering customer and a subsidy to the power company and other ratepayers.

Rooftop solar systems reduce air pollution and do not disturb essential natural landscapes, while electricity from conventional sources places a growing burden on us and our environment. The societal benefits of clean energy are not reflected in our current net-metering system. Dirty energy (including coal, natural gas and nuclear) continues to spew toxins into our precious atmosphere, treating it as a sewer, with little or no cost to those responsible for it. Another hidden subsidy. Is that fair to those who have invested their hard-earned money into clean-energy systems in an effort to be part of a much-needed solution?

Unintended Consequences

And in an ironic twist, this change creates a perverse incentive for net-metering customers to use more of their solar energy at the time it is being produced, since washing clothes or charging an electric vehicle at night will now cost more. This may be an unintended consequence that will increase peak demand, one of the things the utility has been working to reduce. Whether the additional revenue is worth the increase in daytime usage remains to be seen, but it is a factor.

Modern energy systems are complex. The best solution I’ve come up with is simple: Pay the Truth. If the truth is that net-metering customers must pay more to meet their “fair share,” then so be it. Catastrophic climate change and ocean acidification cannot be denied. They are just some of the results of our addiction to fossil fuels. I think it is long overdue that we pay the truth for that as well. This is not a time to be selective. What’s fair is fair. Don’t you agree?