Does Nevada Hold the Key to Future Policy Decisions on Solar Power?

It’s cheaper than ever before for people in the U.S. to install rooftop solar panels as an energy source. 

With the trend continuing to gain traction, states have started revisiting the laws they use to promote rooftop solar—so-called ‘net metering’ policies. 

An analysis by Lincoln L. Davies, associate dean for academic affairs and a professor at the University of Utah S.J. Quinney College of Law, examines how one state’s dramatic move away from net metering in recent years may set the stage for other states—including Utah—to follow suit.

In newly published research for Brookings Mountain West, “Nevada’s Net Energy Metering Experience: The Making of a Policy Eclipse?”,Davies and co-author Sanya Carley, a professor at Indiana University, explore Nevada’s choice to replace its net metering law with a different tactic.

With traditional net-metering policies in many states, when a homeowner or business installed solar panels and placed extra electricity on the grid, the public utility paid the consumer the same price for the electricity that the consumer would have paid to buy electricity from the grid. Net-metering policies have largely been considered a positive way to encourage installation of distributed power like rooftop solar, and reduce the cost of owning solar panels for consumers.

In 2015, Nevada took a different approach, implementing a new program in which Nevada’s utilities no longer pay solar and other small-scale energy system owners the retail rate of electricity. Instead, they pay owners a lower wholesale price of electricity.

The move resulted in many rooftop solar providers leaving the state, slowing the what was a thriving solar industry, and creating significant public opposition to the change.

“Nevada’s choice to move away from net metering for rooftop solar caused alarm throughout the industry,” Davies said.  “One of the key ways the state was supporting solar is now going away, and it initially looked like Nevada was going to do so retroactively.  Many environmental interests see this as problematic, both because policy stability is necessary to support renewables and because there is a concern that other states may follow Nevada’s lead.”

Davies and Carley’s research for the Brookings Institution examines what happened in Nevada, what other states are considering, and what it may mean for the future of rooftop solar in the U.S., including in Utah. To read the full report, click here.