Nevada’s New Solar Fees Have People Furious

January 14, 2016, 3:50 PM UTC
Fortune, Katie Fehrenbacher

“Don’t tax the sun!” chants a crowd of hundreds of people gathered outside of a non-descript office building in Las Vegas on Wednesday. One person holds up a neon yellow sign that reads: “Sandoval stole my sunshine,” a reference to the state’s Governor. Another reads: “Solar lives matter.”

The angry protestors are gathered outside of the office of Nevada’s Public Utilities Commission, the regulatory body that sets rules for the state’s electricity, gas, and water utilities. Among the crowd are homeowners who bought solar panels, and workers who have been earning a living by installing rooftop solar panels.

Celebrity actor Mark Ruffalo, a long time environmental activist, briefly grabs a megaphone and riles up the crowd: “Let’s make life uncomfortable for them. For the Governor. For the PUC. Because they’re wrong!” shouts Ruffalo.

What has all these Nevadans, and even the Incredible Hulk, so peeved? Last month, regulators approved a new plan that tacks on fees and lowers compensation paid to owners of home and commercial solar systems. The regulators held its first hearing about the ruling on Wednesday.

Actor Mark Ruffalo addresses a protest over new solar fees in Las Vegas.
Fortune, Katie Fehrenbacher

Their decision is the latest move in the complicated and increasingly combative environment around the boom in rooftop solar panels.

For decades utilities have built businesses off of moving electricity from a large power plant to their customers’ homes and businesses. But now, with the growing popularity of solar panels, those customers are now producing power on their roofs and sending it back onto the power grid.

The solar situation in Nevada has grown particularly contentious. That’s because the new fees in Nevada, which will jump to $40 a month, won’t only apply to new solar customers, but also to the 12,000 or so people that already own solar panels. Some of these customers spent tens of thousands of dollars to have the solar panels installed, and now, with the extra costs, it will take them much longer to pay off that investment.

As a result of the new plan, the solar industry says selling solar in Nevada no longer makes economic sense. The largest U.S. solar installer, SolarCity (SCTY), cut 550 jobs from Nevada last week, with plans to relocate the affected workers to more solar-friendly states. Another large solar installer, Vivint Solar, has said it could make similar cuts. Several thousand solar jobs in the state could be eliminated.

A protest outside of the Public Utility Commission in Las Vegas.
Fortune, Katie Fehrenbacher

The solar industry, and the protesters, say the regulators and Gov. Sandoval have created an unfair advantage for the state’s utility, NV Energy, which is owned by Warren Buffett’s Berkshire Hathaway Energy. Critics accuse the governor of having political advisors that are top lobbyists at NV Energy.

Solar company Sunrun (RUN) even went so far as to file an open records request for communication between NV Energy employees, lobbyists, Gov. Sandoval and his staff, and current Public Utilities Commission Chairman Paul Thomsen. After their request was refused, Sunrun sued Sandoval.

The governor and NV Energy defend the regulator’s decision because they say non-solar customers have been unfairly paying more than their fair share for maintaining the power grid. The governor has said the solar companies have “resorted to bullying tactics,” and have tried to pressure his office and “improperly influence the PUC’s independent decision making process.”

WATCH: SolarCity’s new efficient solar panel:

Nevada isn’t the only state that has tried to tack extra fees on solar customers to pay for grid maintenance and upgrades. Arizona utility Salt River Project approved similar extra fees for solar customers.

Last year, SolarCity sued Salt River Project over the fees while calling them an attempt to maintain an energy monopoly in the state and unfairly block competition. SolarCity CEO Lyndon Rive has called the new fees in Nevada “unethical, unprecedented, and possibly unlawful.”

The solar debate in Nevada is starting to get a national spotlight. During a speech in the state, Democratic Presidential candidate Bernie Sanders recently called the ruling “just about the dumbest thing I have ever heard.” On Wednesday Sander’s official Twitter account tweeted: “I stand with the hundreds of Nevadans asking @nevada_puc to protect NV solar jobs and investments in our clean energy future.”

This week, cleantech investor Nancy Pfund, who has backed both SolarCity and electric car company Tesla (TSLA), sent a letter to the Nevada regulator’s commissioner that harshly criticized the ruling. The letter was signed by 17 other Silicon Valley investors.

Pfund wrote: “we are gravely concerned about the unprecedented decision to impose significantly new charges on existing customers and reduce the value of the credit for excess generation. This is already creating a chilling effect within the investor community and will force us to reconsider future commitments of capital in the state.”

For the Nevadan solar customers who are now getting hit with new fees, the ruling is an emotional one. At the protest, solar panel owners, solar industry workers and others took turns telling the crowd their stories.

A woman who sold solar contracts for a living took the megaphone and said her job had once filled her with pride, but that those feelings had turned to dismay as she realized people she sold contracts to were now getting a raw deal. A line of people trying to fit into the small hearing room to comment or listen stretched around the block.

Inside the hearing dozens of homeowners asked for a delay in the ruling. The regulators rejected their appeals.

Ruffalo slammed the regulators in the hearing: “You are taking from the people and giving to the rich. You are the anti-Robin Hood. People aren’t going to forget, you have a lot of really angry people out there because they see what’s happening.”

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