Solar power becomes a very attractive investment when sunlight is available in generous amounts, since you obtain more energy and savings for a given PV system capacity.
The southwest of the USA has excellent natural conditions for solar power, particularly in states like California, Nevada, Arizona and New Mexico. Some locations in these states receive more than six peak sun hours per day, which greatly increases the energy output a photovoltaic system while reducing its payback period.
However, even with excellent site conditions and affordable solar panels, the local regulatory framework has a considerable impact on the financial attractiveness of solar power. The case of California and Nevada is a clear example of this; both states have plenty of sunshine throughout the year, but very different regulatory approaches to solar power:
· California has plenty of government incentives for solar power, including generous rebates. The state also has a thriving entrepreneurial community, and thanks to these factors the installed solar power capacity in California is currently half of the total national capacity!
· In Nevada, on the other hand, the government has sided with electric utility companies and is creating less favorable conditions for solar power: On January 1, the fixed monthly fee for solar power customers was raised by 40 percent, while also lowering the payments received for exporting the surplus production of solar PV systems to the grid.
In addition, these changes are retroactive(!), which means customers using solar power can expect large bills this month… just for being users of photovoltaic technology. The new regulations were pushed forth mostly by NV Energy Inc., the owner of Nevada’s two largest electric utilities.
These new regulations have placed considerable pressure on the main players of the solar power industry in Nevada. For example, SolarCity Corp. and Sunrun Inc. were both forced cut down their staff by hundreds of employees. Governments throughout the world must realize that solar power is a booming industry which can create considerable economic growth and hundreds of jobs. When limitations are placed on the solar power industry to protect older business models, such as those of traditional electric utilities, the resulting damage far outweighs any benefit.
Of course, there has been backlash from solar power companies in Nevada. A group of 18 venture capital investors is pressuring the state governor to void the recent regulatory changes, and rallies to protest against the new fees are being organized in Las Vegas and Carson City.
Regulations like those recently approved in Nevada cause great damage to innovation, but the greatest impact is suffered by homeowners who have invested in solar photovoltaic systems. They have to face reduced payments for the surplus energy they sell to the grid, while also being charged a retroactive fee. It is unfair to punish homeowners for using a technology which brings both environmental and economic benefits.
The case of California and Nevada clearly demonstrates the importance of favorable laws and regulations for the solar power industry. If you plan to install a photovoltaic system, make sure the make the most out of any benefits available in your location! You can talk to our solar experts for guidance on this topic, or for any questions or inquiries you might have.