Las Vegas at Dusk, Nevada
Solar Legislator Score: 
January 2012 Update:
Nevada, land of just a little bit of everything; skiing, deserts, mountains, lakes, the annual Cowboy Poetry Gathering, and oh, yeah, Reno and Vegas. With all those lights keeping Vegas turned on, Nevada needs lots of electricity. That kind of demand calls for piles of nice, clean, renewable, solar power. Has the state legislature seen the light? Read on to see what’s shining on Nevada.
State Legislation:
Nevada is an interesting case in incentives and standards that sound really good when you see them at first, but after taking a closer look at what the impact is for the average homeowner, nothing really sparkles.
Nevada has the most solar energy installed per capita out of any state in the country. You’d think things would look good for homeowners who are considering installing solar panels on their roofs. The answer is not necessarily.
Most of the reason Nevada is doing so well installing solar is because the majority of the incentives are geared toward industrial size installations for businesses or power companies with eyes on creating horizons of silicon in the desert.
Since we focus on residential solar here at SPR, that doesn’t bode well for the state’s legislative grade, which is very poor. Hell there’s so much sun in Nevada, yet the state residential incentives are little more than a mirage.
We calculate it takes an average sized 5kW solar system about 13 years to pay for itself in Nevada, which isn’t that bad, but really is a shame considering all the abundant sunshine the state receives. In contrast, New Jersey has plenty more clouds than sun, yet a similarly sized system there will pay for itself in only 6 years.
There are some specific things the Nevada legislature can do to cut that payback timeframe down to size. We’d like to first suggest an alteration to the state’s renewable portfolio standard.
Nevada’s Renewable Portfolio Standard:
Nevada has one of the most aggressive renewable portfolio standards (RPS) in the country with a solar carve out no less. That means the state is required to source at least 25% of it’s power from renewables by 2025. 6% of that needs to come from solar by then. If not, utilities get slapped with sizable fees.
That’s a huge reason why there’s so much solar installed in the state.
However, much of the compliance has come from huge solar businesses who have secured land lease deals in the desert to build solar power plants so the utilities can hit their numbers.
If the RPS contained a distributed generation requirement like states such as New Jersey or Colorado, the utility companies would be much more willing to offer incentives to middle-class homeowners instead of millionaire land development moguls.
Nevada Electricity Prices:
The average cost of electricity is a relatively cheap $0.12/kwh in Nevada. That’s a little to cheap for our liking, as there could be more done to roll in the actual costs to the environment to polluting energy sources such as coal and natural gas. Once those costs get accounted for, the average electric rate may increase to the point where solar panels on homes in the state pencil out at more parity with the electric grid.
Performance Payments:
To meet their RPS goals, power companies can apply for special credits (called PCs) based upon the number of renewable kilowatts they include in their power mix – the largest credit is for Solar Power (2.4 PCs/kWh generated).
They are also willing to purchase your PCs from you, but in order to be tracked in the system and able to sell your credits, you have to have a system that is larger than 150kW. That’s an abomination, and basically makes it impossible for individual homeowners to participate in the program.
Net Metering:
A brighter spot in an otherwise dreary state solar overview for Nevada is the amended net-metering law.
Basically, with net metering if you generate more power than you need, you’ll get a credit on your next bill. The best thing about this law is that Nevada does not limit the amount of time that you can carry a credit (some states take the credit away after a year or so).
Here’s the form to sign up for net-metering in Nevada.
Utility Rebates:
Nevada has a great incentive for home solar energy installations in theory, but not in practice. Sierra Pacific and Nevada Power Companies (the two major investor-owned utilities in the state), offer a $1,500/kW rebate through the Solar Generations project.
However the available amount of rebates each year is extremely limited. The last program which expired in September 2011 alloted for only 353kW of residential solar to be installed. So, on average, about 70 lucky homeowners got the rebate. 70. That’s pathetic for a state-wide rebate program.
Moreover, even if you were one of the lucky 70 homeowners who got the rebate, you have to forfeit your PCs (not that you could sell them anyway).
Property Tax Exemption:
One redeeming aspect of solar in Nevada is the presence of a property tax exemption from the increased value of your home to taxation after you install solar.
We would in addition like to see a sales tax exemption on the systems like many other states have enacted. We’ll wait and see on that.
Tax Credits:
Unfortunately, there are no state tax credits to speak of. This is an area of opportunity for the Nevada legislature to spur on the residential solar market.
Example 5kW System Investment Return:
Nevada enjoys plenty of sunshine, making it a prime location for a home solar electric system. Installing a typical 5 kW system in Las Vegas would run about $25,000. We aren’t going to include the PVGenerations rebate program in our calculations, because let’s face it, you’re probably not going to get it even if you apply for it.
What you do qualify for is the federal 30% tax credit. That will net you $7500, nothing to sneeze at.
Also, with the abundance of sunshine, your 5kW system will generate about 7800kwh per year. That’s enough to cut $78 from your monthly power bill.
At the existing rate of electricity price increases after the federal tax credit, we estimate it would take 13 years for your solar panel system to pay for itself in Nevada: not that bad, not that great either.
What’s more, your home value would increase by 20 times your annual savings (about $20,000), and that’s a tax free increase!
To find out how the numbers work out for you, click here and we’ll connect you to experts we trust in Nevada to come out and calculate a realistic estimate for you based on your unique energy usage, location, shading, roof orientation, and roof type. They’ll even do it for free!
Consensus
Nevada is well on its way to building a solar power market. The trouble is they’ve focused entirely on utility scale solar installations and have left the average solar Joe and Jane homeowner in the dark.
Governor Brian Sandoval can urge the legislature to consider a state residential solar tax credit, implement a smaller scale solar distributed generation program as part of the state’s RPS, and add a solar sales tax exemption for homeowners.
Doing these things would create many more jobs in the state and go a long ways toward turning the local economy around. There’s a big difference between a 13 year payback and a 7 year payback.
With all that sunshine in Nevada, it can be done. We’re waiting patiently to improve your grade.
In the meantime, we urge you to still get a personalized solar quote so you can see how the numbers pencil out for you.
