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How Nevada ruined its solar industry – and what it’s doing to fix it

Indiana's run to the sun is not the first to be stalled by policy changes that phase out an incentive to invest in solar.

In 2015, Nevada also re-examined its rule that credited solar owners for the excess energy they produced and sent back to the grid, known as net metering. The controversial decision incited backlash and derailed a growing industry.

So much so that the state's legislature, in June, revived its net-metering rule and went a step further: It created a Solar Bill of Rights to protect the ability of customers to generate their own solar and receive commensurate benefits.

Here is a look at Nevada:

• Solar industry status: Nevada has one of the five most-developed solar markets in the United States, with more than 9 percent of the state's electricity coming from solar. Roughly 380,000 homes in the state are powered by solar, and the industry employs nearly 8,300 people.

• Decision: On Dec. 22, 2015, regulators with the Nevada Public Utilities Regulatory Commission tripled the fixed charges solar customers would pay over the next four years and also reduced the credit solar customers receive for producing more energy than they use by three-quarters.

• Sides of the argument: Regulators said the order was designed to make solar customers pay their fair share for use of NV Energy’s grid. Solar companies warned that the changes make rooftop solar economics unworkable.

• Industry derails: Soon after the new rate took effect on Jan. 1, 2016, several major installers in the state, including Sunrun and SolarCity, announced they would have to cease operations. Local installers were forced to cut staff. And stocks in some of the major solar companies, such as SolarCity, fell by 37 percent.

• Customer backlash: One group of solar customers launched a class-action lawsuit alleging the utility NV Energy "conspired to unlawfully reduce incentives." Solar advocate groups also began a campaign to remove commissioners on the regulatory body and started a ballot initiative to amend the law underlying the commission's decision.

• Response: The Nevada legislature earlier this year signed a law that reinstates net energy metering, immediately allowing rooftop solar customers to be reimbursed for excess generation from a solar system at 95 percent of the retail electricity rate. Over time, customer compensation would decline over four tiers to a floor of 75 percent of the retail rate. The law also provided customer protections that let them lock in their rate for 20 years when they sign up and ensures they aren't placed in discriminatory rate classes.

• Advocate reaction: "I think this shows that if a state tries to impose unfair rules that keeps solar companies out, eliminates the ability for homeowners to choose solar and eliminates a huge booming industry, then customer outcry and demand can force their hands," said Lauren Randall, director of public policy for Sunrun. "Lawmakers have to listen to their constituents, and we saw how powerful the opposition is."

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