Solar

Nevada's solar workers and customers reel as new rules 'shut down' industry 

Companies struggle after state imposes highest charges yet on customers, driving firms out of the state and workers out of jobs

Suzanne Goldenberg

The conversation at SolarCity’s hollowed-out warehouse in Las Vegas felt like it came after a funeral, and in a sense it did, with workers cycling between sadness, disbelief and anger at the untimely death of the rooftop solar industry.

The cause, as seen by workers drifting in to clean out their belongings, was state-assisted suicide, after the Nevada regulator imposed costly new rules for residential solar customers.

The decision to replace economic incentives with new higher fees pulled the carpet out from under an industry that provided 8,700 jobs in the state last year, according to the Solar Foundation, and stranded some 17,000 homeowners who have already gone solar with a financial liability on their rooftops.

Three companies, including SolarCity, announced they were quitting the state, laying off about 1,000 workers.

“Everyone in this warehouse was let go, 550 people across the valley,” said Chandler Gray, who lost his job as an installations inspector for SolarCity.

The havoc turned solar panels into a hot topic for Bernie Sanders and Hillary Clinton ahead of the Nevada caucuses on 20 February.

Call it the solar wars. From Arizona to California to Florida and now Nevada, states are struggling to reconcile residential solar – with its promise to give homeowners greater independence while fighting climate change – with highly centralised business models of the electricity industry.

California and a number of other states eventually defeated efforts by energy companies and corporate lobby groups to claw back incentives for solar customers.

Now Nevada has raised the stakes, levying the highest charges to date and breaking with convention to impose those charges on existing customers as well as new ones.

The solar showdown pits Elon Musk, the electric car billionaire and cofounder of SolarCity, against Warren Buffett, owner of the state’s monopoly electricity provider NV Energy.

The new rules, confirmed on 12 February, raised the monthly fees to solar customers from $12.75 to $38.51 over 12 years while dramatically cutting back the rates that customers were paid earlier for feeding surplus power back into the grid from about 11 cents a kilowatt hour to about two cents.

Homeowners who are suing NV Energy in a class action estimate the new rates add 40% to their monthly bills, while reducing the amount they get paid for the solar energy their panels produce by 18%.

SolarCity’s warehouse was still plastered with posters advertising the “infinite power of the sun” – but the company’s power to change the residential roofline of Nevada cities was, for the moment, gone.

Orders stopped the moment the new rules came out, Gray said.

Until the axe fell, SolarCity was shipping up to 1,600 solar systems a week from this and one other warehouse in southern Nevada. “It used to be like Raiders of the Lost Ark when you went into this warehouse,” he said

“It was massive,” Gray went on. “Then they dropped the bomb.”

Gray, who saw SolarCity as an escape from dead-end retail jobs, was let go. So was his partner, who also worked for SolarCity. “Our household income was zero for a couple of weeks there,” Gray said.

His partner was rehired – and Gray hopes he will get taken on too. But for the moment he is looking after their six-year-old son, and campaigning for a ballot initiative to overturn the rules. “We are going to fight to bring solar back, and once we do, we will get our jobs back too,” he said.

SolarCity is keeping its Las Vegas headquarters in an upscale shopping mall where the glass conference rooms are decorated with the names of island vacation destinations like Aruba and Maui.

But the office will operate mainly as a sales center. Roz Holden’s last day arrives on 21 February, after which the top saleswoman plans to put her four-bedroom house on the market and move into a rental – just to keep costs down – and start hunting for work.

The company offered Holden a job in its call centre or to move her to another state, but neither was a good option for a single mother supporting two daughters who are firmly settled in Las Vegas.

Even now, Holden still can’t fully believe the good times for solar are over in Nevada. “It’s unfathomable,” she said. “We expected some changes this year, but we didn’t expect they would shut us down completely. It was quite shocking.”

SolarCity arrived in Nevada in 2014, shaking up the market for rooftop solar with a leasing plan that allowed homeowners with good credit ratings to put solar panels on their rooftops with no money down.

The company could barely keep up with demand – until 22 December, when the new rules were announced. “We literally stopped business within that hour, pulled installs off the roof, finished up the jobs we had within that hour and we were done,” Holden said. “It pretty much shut down the industry.”

Some of their customers were caught in limbo, like Kelly and Charisma Schwarze, whose installation was completed but whose panels have still not been switched on by the electricity company.

The couple had been excited to go solar, once the leasing option put it in their budget. Now “I feel like we are being punished for trying to do the right thing”, Kelly Schwarze, an independent film-maker, said.

For Mike Stitely, the new rules destroyed the tiny thrill he got each day when he checked the iPad to see how much electricity was being produced from the 16 panels on his roof.

Stitley’s wife is still working, at Walmart, but he is retired. He is very worried about higher bills, and selling the house when the stairs become too much. “People are going to be scared off,” he said.

“It blows my mind and really upsets me,” Stitley said. “It’s pretty high anxiety. At this time of your life you like to know what is going on.”

The public utilities commission (PUC) claims solar customers were not paying their fair share for maintaining the grid. “When solar rooftop ratepayers reduce energy consumption with solar generation, they lower their bills at the full retail energy rate, which includes charges not only for fuel costs but also for fixed and demand costs; these fixed and demand costs do not go down simply because the rooftop solar ratepayers consume less energy,” Peter Kostes, a spokesman, wrote in an email. “Solar rooftop ratepayers are under-paying.”

Patricia Farley, a Republican state senator who drafted a bill last year to revise the state’s solar policies, claimed solar was only for rich people, and that the new rules were fairer for all Nevadans.

“We don’t see people with lower income putting solar on their homes,” Farley said. “I think if you looked at who bought solar, you don’t really see diversity. You have got people who can afford it, and some of the experts told me the people who can’t afford it are paying the difference.”

But the new rules struck clean energy advocates and campaign groups as retrograde. Instead of limiting rooftop solar, Nevada should be promoting residential arrays as a means of fighting climate change and diversifying the electricity grid, in case of natural disaster or attack, they argued.

Clinton issued a statement saying it was “punitive” to change the rules on existing homeowners. Bernie Sanders, who met with solar installers in Reno, said it was “just wrong”.

Rooftop solar is also likely to figure in next November’s elections.

“This is an existential battle for the future of solar being waged right now in front of regulatory bodies,” said Adam Browning, director of the Vote Solar campaign group. “It is really about who gets to decide how much solar is installed and who owns it.”

Others see the solar wars as an uncomfortable blip on an inevitable energy transition.

Solar was barely on the radar when Louise Helton went into the solar business in 2007, inspired by hearing Bill Clinton describe his vision of Nevada as a “Saudi Arabia for solar energy”.

She went on to found 1 Sun Solar, offering residential solar installations out of the same shopfront where she runs her electrical contracting and stone tile business.

After the recession hit, landing harder on Las Vegas than other towns, it took until 2011, when the prices of solar panels began coming down, for Helton to get her business up and running.

By Helton’s own estimates, she stands to lose about $500,000 a year because of the PUC decision. But she is relatively philosophical about the eventual outcome of the solar wars.

“It’s sort of the same problem we had to go through when you first had cellphones. Ma Bell wasn’t happy,” Helton said. “It was a disruptive technology that changed industry, that took it from being top-down and inverted that pyramid completely.”

It was clear which side was going to win the end, Helton said. And then she picked up her cellphone and smiled.