Nevada's Net Energy Metering Experience: The Making of a Policy Eclipse?

Abstract

Across the United States, legal and policy treatment of distributed solar photovoltaic (PV) energy is beginning to change. For decades, net energy metering or “net metering” (NEM) served as the leading state-level policy tool to promote distributed solar power in the United States. Over the past several years, however, cracks appeared in the longstanding reign of net metering in the United States. Amidst these changes, Nevada has emerged as a prominent example of a state that implemented significant changes to its net metering policy. In December 2015, the Nevada Public Utility Commission (PUC) unanimously adopted a successor program to its prior NEM scheme. Nevada’s changes were so significant that some have referred to it as “NEM 2.0” — or something entirely different from net, “net billing.”

This report addresses the important questions that the developments in Nevada pose about the future of solar power and net metering in the United States. What information and processes led to Nevada’s decision? Was the information that decision-makers considered consistent with best practices and with the information relied on by other states? How does Nevada’s decision compare with other states evaluating changes to their net metering policies? The report puts Nevada’s experience in the context of broader U.S. trends, as well as juxtaposing it with case studies of recent changes to net metering in California and Colorado.

Keywords: Solar, Nevada, net metering, net billing, NEM 2.0, photovoltaics, PV, renewable energy, climate change, RPS, California, Colorado, cost-benefit analysis

JEL Classification: K2, K23, K32, L78, N7, N72, P16, Q3, Q30, Q38, Q4, Q41, Q42, Q43, Q48