Why Nevada Legislators (Plus Leo DiCaprio) Visited Tesla’s Gigafactory
Nevada legislators met at Tesla’s massive battery factory outside Reno on Wednesday night to hear top Tesla and SolarCity executives extol the virtues of clean energy in the state, particularly solar. Hollywood superstar Leonardo DiCaprio was also at the Gigafactory for a separate event earlier in the day but met with some of the legislators and attendees.
Nevada has emerged as ground zero in a battle over how utilities and regulators manage the dramatic growth in solar on rooftops. Late last year, the Nevada Public Utilities Commission approved a controversial change that lowered the price that solar customers are paid for selling electricity into the grid while adding on extra fees that they must pay.
That change made long time solar customers and the solar industry (as well as celebrity Mark Ruffalo) furious. They complained that the change punished customers that had already bought solar panels under the former rules, and would effectively end the rooftop solar industry in Nevada.
As a result of the changes, SolarCity (SCTY) CEO Lyndon Rive said that the company, which installs solar panels on the roofs of buildings, would no longer do business in Nevada. That decision, which included cutting or relocating 550 jobs, ended up hurting SolarCity’s latest earnings.
At the event last night, Rive gave a presentation about the future of clean energy in Nevada that his slides contend will “require leadership,” presumably from the Nevada lawmakers in the room. Tesla’s chief technology officer, J.B. Straubel, also gave updates about the Gigafactory, part of which is still under construction, and made the case for the benefits of combining batteries and solar panels. Batteries can store energy from solar panels to be used at night, and batteries can also help utilities manage the power grid.
Rive is the cousin of Tesla CEO Elon Musk, who is a major investor in SolarCity. For years, the companies have worked together on products that combine solar panels and Tesla’s batteries. Musk reportedly attended the Gigafactory event.
For more about Tesla’s ambitions to sell batteries for homes and businesses, watch:
The meeting shows the power of Tesla and SolarCity’s lobbying. Tesla was able to score $1.4 billion in incentives from the state in exchange for building its Nevada Gigafactory.
Last year, Nevada legislators mostly agreed to phase out some of the incentives for rooftop solar. But the part of the ruling that was more controversial was that the new rules, which were applied immediately, changed the rules of the game for customers that had already invested in solar panels. The new rate structure made it harder for them to get a financial return on the solar panels they had already installed, and those customers filed a class action lawsuit in response to the changes.
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Last year the legislators asked the Nevada Public Utilities Commission to figure out how the incentive, called net metering, would be phased out. The commission created the plan and approved it.
The solar industry is trying to get the commission’s decision reversed through a December ballot measure called the No Solar Tax PAC and through a legislative special session. The solar industry contends that government and the commission have unduly been influenced by power company NV Energy, which is owned by Warren Buffett’s Berkshire Hathaway and sees rooftop solar as a competitor.
Some parts of the Gigafactory were completed enough to host last night’s event. The factory is already producing Tesla’s batteries for buildings and the power grid.
Updated on March 17 at 5:15pm PST to clarify that Leonardo DiCapro was at the GigaFactory for another event, but met with legislators and solar executives at the night event.