The Impact of Removing Nevada Energy’s Solar Cap

NV Energy
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The Impact of Removing Nevada Energy's Solar Cap

Every solar installation has a specific wattage. The wattage is determined by the total amount of electricity produced by your panel per sun hour, then multiplied by the number of panels you have. You can then multiply that number by the peak sun hours you get in your area, then expand that for an entire year. Some places have caps on net metering, which limit the amount of credit a home can obtain from net metering.

The Nevada Energy Solar Cap’s History

Prior to 2015, Nevada Energy had a cap on the amount of energy that could be credited to your power bill. Qualifying facilities could only produce 235 MW of electricity per year before they would no longer receive credits from Nevada Energy.

Why the Nevada Energy Solar Cap Mattered

Before August 2015, there was a de facto limit to solar production in areas managed by Nevada Energy. Net metering and the federal solar tax credit (ITC) are the twin kings of solar incentives. Areas without net metering policies have many difficulties in growing solar. Areas with good net metering policies, on the other hand, have seen solar flourish.

The Nevada Solar Cap Stifled Solar Growth

The problem with the solar cap is that it limited net metering within Nevada. Some homes with larger solar installations found themselves still paying for electricity at night or during bad weather. After all, without solar battery backup you couldn’t save that extra electricity for use after the sun went down.

Some questioned the usefulness of solar if you were still paying a sizable amount for electricity even after buying solar panels. What was the point of buying solar if it didn’t save you money?

Lifting the Nevada Net Metering Cap Helped Solar Flourish

By removing the net metering cap, Nevada Energy opened up the solar field to installations which don’t have battery backup. Net metering became a viable option for solar homeowners. Those without the inclination to purchase solar battery backup were suddenly presented with a path to eliminate their power bills.

Net Metering in Nevada After the Cap Was Removed

Following the removal of the net metering cap, solar in Nevada began to flourish. Particularly important were the good net metering rates that were available to Nevadans over the past few years. Nevada Energy’s rates were quite strong and, even as they have declined in recent years, are still much better than many parts of America. 

Nevada Energy Net Metering Tiers

Currently, Nevada Energy has four tiers of net metering. These tiers are based on when you signed up for net metering and correspond to the retail rate of the company. When you sign up for one of Nevada Energy’s net metering tiers, you’re locked into that tier for 20 years. While this was particularly beneficial to those who signed up early, it is still a strong incentive for new solar homeowners.

The current tiers are:

  1. Tier 1: 95 percent retail rate.
  2. Tier 2: 88 percent retail rate.
  3. Tier 3: 81 percent retail rate.
  4. Tier 4: 75 percent retail rate.

While tiers 1-3 are full, tier 4 is still accepting applicants. Most net metering agreements across America are avoided-cost, which only credit you with the amount of money that it would take for the company to produce the electricity themselves. The retail rate, however, is much higher and so net metering agreements based on retail rate tend to save much more money than avoided-cost agreements. 

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