Study: No significant costs passed along as homeowners install solar

CARSON CITY – There are no significant costs going forward to nonparticipating ratepayers from homeowners who install their own rooftop solar systems to reduce their power bills, according to a study submitted to the Nevada Public Utilities Commission.

Called net metering, NV Energy has 2,455 such customers with 35.8 megawatts installed in Southern Nevada.

“Overall, we do not estimate a substantial cost shift to nonparticipants due to (net metering) going forward given the current and proposed reforms to the program,” said the study by San Francisco-based Energy + Environmental Economics (E3).

Whether such systems are a net cost or net benefit to nonparticipating ratepayers depends on several variables, but “in either case should be relatively small,” the consultant said.

The study was commissioned by the Nevada Public Utilities Commission to determine if ratepayers are subsidizing homeowners who install their own solar systems. The report was posted by the agency on Thursday.

The study found that prior to 2014, there was a significant cost shift from net metering customers to nonparticipating customers, primarily because the funding of the incentive to install rooftop solar was relatively large and impacted the bills of all customers.

But in 2014 and 2015, there is a benefit expected for nonparticipants in part because the utility incentive is relatively low, the report said.

In 2016, “we expect that non-participants are very nearly neutral and will experience neither a large benefit nor a cost due to new (net metering) installations,” the report said.

The analysis, required in Assembly Bill 428 passed by the 2013 Legislature, will now be used by Commissioner David Noble as the basis for his report that will be forwarded to the full commission for its review. The report from the full commission is due to the Legislature by Oct. 1.

A public workshop is expected to be conducted later this summer to get input on the study.

The study is important because the Public Utilities Commission is moving forward with a review of whether households that produce some of their own energy should be put in a separate class for rate-setting decisions.

The investigation of whether the two classes of customers should be created was sought by the Attorney General’s Bureau of Consumer Protection.

An official with the office said recently the jury is still out on what the investigation will show about net metering customers.

But the Sierra Club, in a filing opposing such a review, argued that the request is based on the “unsupported assumption” that net metering customers create a disproportionate cost on NV Energy’s system compared to customers who do not self-generate.

“The assertion that net metering customers are unfairly burdening other customers is often put forward by utilities or other interests seeking to undermine the growth of distributed generation, and it is an argument that is usually either untrue or severely overstated,” the Sierra Club said.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Follow him on Twitter @seanw801.