Cloud can’t hang over rooftop solar forever

By Dave VanZanten

Monday, Jan. 25, 2016 | 2 a.m.

Most people don’t get how and why rooftop solar power works. What’s the catch? Why are solar companies willing to install a solar array on your rooftop at no cost? How can that be profitable?

The magic comes from the fact that NV Energy’s pricing has, on average, increased at a rate of more than 5 percent a year since 2000, while crystalline silicone photovoltaic solar cells cost only about 8 percent of what they did at that time. The people “going solar” pay for the system over time by agreeing to purchase power at a reduced rate from a solar purveyor, with the potential to save even more if and when NV Energy raises rates again.

Utilities, traditionally, are natural monopolies. Here and throughout the world, many years ago, winners were picked, and those winning utilities were, and are, regulated by local government.

Rooftop solar changes things. It’s now possible to generate inexpensive power on your own roof. There will be no Public Utilities Commission in the future, not because the PUC concept is evil or NV Energy is evil, but because it simply won’t be needed. NV Energy won’t be a monopoly.

There was a number known as “the cap” that everyone, including seemingly the folks at NV Energy, believed was the demarcation line. Those who got solar pre-cap were to be grandfathered in against future NV Energy rate increases and allowed to sell the extra energy their solar systems created back to NV Energy for a one-for-one credit. NV Energy was to be, in effect, a free battery.

NV Energy is no different than other businesses. The executives don’t like to buy electricity from solar customers at retail pricing. Still, a September 2014 study commissioned by the PUC found that all NV Energy customers benefited from those feeding the grid with rooftop solar arrays, since much of the solar power is produced at peak times when usage is highest and the sun is brightest. But every customer who goes solar makes NV Energy a smaller company, which ultimately will require the utility to reduce its overhead or will cut into profits.

Many people who have “gone solar” in Nevada still aren’t hooked up to the grid, since NV Energy is taking months, in most cases, to install the final component of the system: the net meter. Thus, customers’ systems aren’t working, and they’re not saving money.

In the end, the sun will win, and that’s good news for Nevada’s economy and for the environment. Soon, with more efficient solar panels and new innovations, folks will have the opportunity to cut the NV Energy cord, some with the help of Tesla batteries being manufactured up north. We have a chance now to embrace the inevitable. Some city needs to lead the solar revolution. Why not Las Vegas?

Dave VanZanten earned a bachelor of science degree from Michigan State University and an MBA from London Business School. He began working in the solar industry last year.