Monday, April 20, 2009 | 2 a.m.
- Solar tax break in bill might burn budget (4-16-2009)
- An older type of 'green' takes precedence (4-14-2009)
- The power of the desert (4-5-2009)
- Solar developers shoot to beat buzzer for cash (3-22-2009)
- Small-scale solar seeks incentives (3-16-2009)
- State faces obstacles to cashing in on the sun (3-9-2009)
- NV Energy asks about stopping renewable fees (2-27-2009)
- Solar company to focus on manufacturing (2-23-2009)
- Green can fatten Nevadans' wallets, too (8-20-2008)
Rooftops covered in solar panels. Miles of mirrors in the desert.
Renewable energy boosters evoke both images while touting the coming green economy. But current market forces appear to favor the latter — large-scale utility plants.
As lawmakers last week debated centerpiece energy legislation aimed at nurturing Nevada’s solar industry, renewable energy advocates and utility executives clashed over a proposed mandate that a small percentage of renewable energy be so-called distributed solar — solar power produced where it’s consumed.
That requirement has not appeared in any bill before the Legislature despite hard lobbying by the solar industry and labor unions. But negotiations last week over whether to include it held up a soon-to-be-unveiled sweeping amendment to Senate Bill 358, according to people involved in the discussions.
Should the state give a boost, funded by an added charge on power bills, to small-scale solar systems that dribble out renewable energy kilowatt by kilowatt?
Proponents say rooftop, or distributed, solar has several advantages over large power plants: It doesn’t consume vast stretches of desert. It’s more efficient because energy isn’t lost during transmission. It can help stabilize the power grid and lower energy prices during peak times. It also creates a more constant and steady stream of high-paying, mostly union, jobs, they argue.
Most other Southwestern states have policies requiring some distributed solar. Advocates say the industry needs only a little push to get going here.
“As the market grows in Nevada, we expect to see local costs come down” said Annie Carmichael, federal policy director for the Vote Solar Initiative, a nonprofit organization. “Sometimes the completely free market approach just doesn’t work out.”
Those opposed — including NV Energy and several legislators on the Senate Energy committee — say distributed generation is less efficient economically and more costly than building utility-scale solar and wind plants. A mandate to require it would be an unfair giveaway to solar photovoltaic manufacturers who produce rooftop panels rather than the rows of curved mirrors common in utility-scale plants, they argue.
Opponents also wonder what happens if not enough people or businesses want to install the panels, and NV Energy gets stuck with the entire bill.
While advocates of rooftop solar say costs are dropping, opponents note that labor costs are rising by an almost equal amount, so the total cost is unchanged. Plus, opponents say, it’s unfair for lower-income power users to pay a fee in their utility bills to fund the utility’s rebate program, which pays part of the cost for people who can afford to install solar panels on their homes or businesses.
At a committee hearing this month some legislators said the proposal sounded like “class warfare.”
“Working folks can’t afford the units yet it’ll end up on my bill,” Sen. Maggie Carlton, D-Las Vegas, said.
The Sun obtained a version of the amendment, not yet introduced and dated April 10. It would require that 2 percent of all renewable energy come from distributed solar.
The Legislature is likely to raise the state’s overall renewable energy requirement to 25 percent by 2025, meaning that distributed solar would be 0.5 percent of the total electrical load by 2025 under this scenario.
Carmichael said supporters hope the mandate would create 160 to 185 megawatts of distributed energy by 2020.
Funding rebates over the lifetime of the program would add about 0.23 percent to an average household’s electric bill, Carmichael said.
But Carmichael and NV Energy representatives declined to say what the total cost of the program would be.
Advocates say Nevada is lagging other states in distributed generation. At 2 megawatts, it has produced about half of what it should have under a state-required rebate program.
NV Energy, which runs the rebate program, said that’s because many people cannot get loans for solar installations.
An average set of arrays for a home might cost $45,000. After utility rebates and federal tax credits the cost would be about $23,000.
But critics say the utility has made obtaining the rebates too cumbersome and restrictive and the mandates would address that issue.
Another approach is outlined in Assembly Bill 448, which passed the Commerce and Labor Committee. The bill would create new rules for the rebate program that proponents say would fix the process, as well as adopt an unenforceable “goal” of 50 megawatts of distributed generation energy by 2019.
NV Energy, solar advocates and environmentalists support that bill.
Regardless of what happens to any distributed generation mandate, the amended SB358 is likely to include property and sales tax abatements for solar companies, new renewable energy portfolio requirements, and the creation of a new renewable energy and conservation commission to replace the governor’s energy office.
Sen. Mike Schneider, D-Las Vegas, chairman of the Senate Energy Committee, said the amendment may add a controversial Assembly proposal creating an extraction fee for renewable energy leaving the state. Renewable energy advocates warn that the fee could halt the development of such projects here.
But legislators worry that they face a backlash if they give away too much to the industry without requiring benefits in return.
“The fact is that after we give tax abatements, we have nothing to get back,” Schneider said. “If they go to California or Arizona they’re going to pay corporate and income and higher workers’ comp that we don’t have here. Those states are going to get a payback.”
One payback would be jobs, which is the primary motivation behind the push for distributed generation.
So far, however, attaching job requirements to tax abatements has been difficult. For example, some wanted to require that solar companies receiving abatements hire Nevada workers, but that was stymied by federal regulations, Schneider said.
(A proposal circulating last week to amend SB358 states that to receive abatements, companies must “use their best efforts” to obtain at least two-thirds of their construction workers from Nevada contractors.)
Labor and solar advocates insist that by encouraging solar panels on rooftops, the state can create a permanent and steady stream of jobs for Nevada-based workers installing and maintaining the panels.
“If you’re going to get a flash in the pan 100 construction jobs and no long-term jobs, that isn’t necessarily a good deal,” said AFL-CIO Executive Secretary-Treasurer Danny Thompson. “I think distributed photovoltaics eliminates that problem. You get more jobs than you do in one giant plant. In one giant plant you build it and you go home.”
Sun reporter David McGrath Schwartz contributed to this story.