Dive Brief:

• Residential solar installer Sunrun Inc. announced its plans to cease operations in Nevada today.
• Sunrun's announced exit comes on the heels of a decision by state regulators to lower the remuneration rate for net metering and raise fixed charges for rooftop solar customers. 
• SolarCity had already announced they would leave the state following the rate changes. Sunrun and SolarCity said their exits will affect hundreds of jobs. Vivint Solar left the state in 2015. 

Dive Insight:

Nevada's solar sector has been in turmoil since Nevada's Public Utilities Commission finalized new net metering remuneration rates and set new fees on rooftop solar and small-scale commercial projects.

Nevada's solar market has grown quickly in recent years, setting off a fierce debate between the state's major utility NV Energy and solar advocates as the rapid expansion of solar installations maxed out the state's 235 MW net metering cap in 2015.

The state's Legislature directed utility regulators in May 2015 to come up with a new solar tariff satisfactory to both sides by the end of the year. NV Energy, the state's dominant electric utility, proposed to lower the remuneration rates for solar customers and increase fixed fees, arguing that net metered customers don't pay their fair share to maintain the grid. 

Stakeholders had anticipated hitting the net metering cap by early 2016, despite warnings by The Alliance of Solar Choice (TASC) that the rapid pace of solar PV installations would mean the cap would be hit earlier than the projected timeline.

The net metering cap was reached in August, which temporarily halted solar installations, prompting Vivint Solar's exit. The PUC, which earlier had rejected solar advocates' pleas to extend the cap by saying it was under the legislature's purview, voted unanimously keep current rates in place through the end of the year before settling on the new net metering policy. 

The new policy decreases the rate paid to rooftop solar customers for the power they export to the grid from the retail rate of the electricity to the wholesale rate. The change would retroactively apply to all solar customers. The PUC created a seperate rate class for all small commercial and residential net metering customers and added a time-of-use pricing option for all. The new rates include an increase in fixed charges and a decrease in the volumetric commodity charge designed to better recoup costs from net metering customers.

Solar developers including SolarCity and Sunrun have decried the new fees and rates, saying they will hurt solar's growth in the state and put hundreds of jobs at risk as the two developers pull their operations out from the Silver State. 

The decision “forces Sunrun to displace our Nevada employees, inflicting enormous pain on hard-working Nevada families,” Bryan Miller, senior vice president of public policy and power markets at San Francisco-based Sunrun and spokesman for the Alliance for Solar Choice (TASC), said in a statement. “Nevada passed incentives to attract residents to go solar. But after baiting homeowners with incentives, the state switched the rules, penalizing solar homeowners to deliver additional profit to NV Energy. This bait and switch hurts Nevada families, many of whom are retirees on fixed incomes, and who use solar savings to meet their monthly budgets.”

SolarCity said its decision to pull out of Nevada will eliminate 550 jobs. 

"I contacted Governor Sandoval multiple times after the ruling because I am convinced that he and the PUC didn't fully understand the consequences of this decision, not only on the thousands of local jobs distributed solar has created, but on the 17,000 Nevadans that installed solar with the state's encouragement," said Lyndon Rive, SolarCity's CEO in a statement. "I'm still waiting to speak to the Governor but I am convinced that once he and the Commissioners understand the real impact, that they will do the right thing."

Governor Brian Sandoval (R) released a statement after SolarCity's announcement saying he remains committed to the state's renewables goals despite the changes in rates.

“I will continue to support the renewable energy industry in Nevada and capitalize on our state’s incredible resources for solar, wind, and geothermal power. I will also respect the process at the PUC provided by law and, most importantly, assist the 550 employees SolarCity has laid off,” said Gov. Sandoval. 

Gov. Sandoval said he attempted to contact SolarCity's Rive on Christmas Eve regarding the potential layoffs, but said the CEO was unavailable.