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October 23, 2014

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Energy:

Small-scale solar seeks incentives

Advocates want bigger subsidies, tougher requirements for utilities

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TIFFANY BROWN / LAS VEGAS SUN FILE

Electricians Frank Cudia, left, and Tina Long install solar panels on a home in Las Vegas in October. Unions want more encouragement for small solar installations, as opposed to utility-scale plants, to create a stream of jobs for installers, many of whom are union electricians.

Beyond the Sun

When solar lobbyist Rose McKinney-James began pushing solar legislation last decade, she imagined solar panels on household rooftops, parking garages and businesses across Southern Nevada.

Laws she helped get enacted in the past six legislative sessions required that a certain amount of energy in the state come from solar power, and provided cash rebates to encourage rooftop solar installations.

The AFL-CIO signed on and set up a training school to certify all new electrician apprentices as photovoltaic solar installers. The unions also pushed for a law to require that all photovoltaic solar installers be certified.

“The whole idea originally was to create an industry,” said Danny Thompson, executive secretary-treasurer of the state AFL-CIO.

But things didn’t go quite as planned. Instead of rooftop panels, the solar requirements were consumed attracting massive utility-scale solar projects to the state.

“It only took two large power projects to eat all of that up,” said McKinney-James, now a lobbyist for the Solar Alliance, a group of 31 solar developers and installers.

The alliance and labor unions are backing a bill that would carve out special requirements to promote rooftop solar installations.

The benefits of so-called distributed solar — a category that includes rooftop solar and any other energy produced at the site where it is consumed — are substantial, proponents say: The installations cut down on the energy waste and costs of transmission lines. And they don’t require vast installations in the desert that can disrupt desert habitats.

But the reason Thompson likes it comes down to the type of jobs created. Unlike solar plants, which create numerous short-term construction jobs but few permanent jobs, residential and commercial solar promises a steady stream of jobs — the certified electrician jobs that often go to union members.

Proponents say the legislation is necessary to give NV Energy the money and incentive to push for more rooftop solar.

But skeptics say it doesn’t make sense to promote what is still an expensive form of solar energy relative to the large utility solar projects.

“These carve-outs are preferences for a more expensive technology, so that’s an issue,” said Dan Kabel, CEO of Acciona Solar, which operates the utility-scale Nevada Solar One project near Boulder City.

Nevada Solar One and Nellis Air Force Base have added 78 megawatts of solar capacity, fulfilling a state requirement that 5 percent of NV Energy’s renewable energy come from solar. NV Energy continues to seek utility-scale solar deals that would surpass its required allotment.

Rooftop solar, meanwhile, has lagged.

Critics say that’s because the utility hasn’t done enough to support its rebate program.

The utility is required by law to offer more than $2 million a year for solar installations, funded by a small fee tacked on the bills of all ratepayers.

The program is expected pay for about 1 megawatt of new solar energy a year. But the program is underperforming. In the four years it has been operating it has added just 2 megawatts through 375 installations.

Some say NV Energy could do more to help the program reach its potential.

“It is so onerous,” said Steve Rypka, who helps homeowners apply for the rebates.

Because NV Energy opens the program just once a year to applicants, it can take 18 to 24 months for his clients to get the go-ahead to install solar panels, he said.

“The problem is that for NV Energy, the SolarGenerations program is not really a big issue,” Rypka said. “It’s probably like a gnat buzzing around their nose that they would rather just get rid of, but they do it because they have to offer the rebates by law.”

Greg Kern, who operates the SolarGenerations program for NV Energy, disagrees with that view. The program is underperforming because in the current economy many people cannot get loans for solar installations and are dropping out of the program, he says. Since June, 123 of 561 participating households have dropped out.

Even with rebates and recently expanded federal tax credits, solar installations are not cheap.

An average set of arrays for a home might cost $45,000. After rebates and credits the cost would be about $23,000. An installation would begin paying for itself in about 12 years.

“Even with the rebates, it’s still darned expensive,” Kern said. “If the state doubled the rebates that would help, but that money doesn’t fall out of the sky. As ratepayers, we pay that.”

Rooftop solar promoters say more demand will eventually lower costs, as often occurs with new technologies.

To create that demand, Solar Alliance, along with the advocacy group Vote Solar and the AFL-CIO, last week began publicly pushing for legislation to raise the renewable energy requirement to 30 percent by 2020, from 20 percent. The bill would require that the 5 percent now set aside for any type of solar be exclusively for distributed generation.

Proponents hope also to increase funding for rebates, but no bills particular to rebates or distributed energy requirements have been introduced.

If the proponents of distributed energy are successful, by 2020 375 megawatts of energy would be produced from rooftop solar or other localized forms of energy generation.

Supporters said it was too soon to say how much additional rebate funding they would seek or how they would implement the extra charges.

As they have in other states, the rebates could prompt criticism that they add to what is essentially a regressive tax. All ratepayers subsidize generally fairly well-off people who can afford the upfront costs of installing solar panels and will see their electricity bills drop as a result.

“I would encourage folks to revisit the funding structure in terms of the impact on lower income consumers,” said Tim Hay, a former consumer advocate who otherwise supports the plan for more distributed solar.

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