The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Net Metering: Get Subsidies or Die Tryin'

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


The pro-solar energy activists have been on full alert since the Nevada State Legislature passed a solar bill last May that failed to raise the net metering cap for rooftop solar customers. Instead, the Legislature gave the Public Utilities Commission of Nevada (PUCN) the regulatory power to levy new fees on net metering customers after the cap is hit. The PUCN voted 3-0 back in December, 2015 to slash net metering payments by roughly half – paying solar customers the (lower) wholesale rate for surplus electricity rather than the (higher) retail rate – along with raising fixed fees on solar customers by nearly 40 percent. This move ruffled the feathers of SolarCity, along with Sunrun and Vivint – the three largest solar companies in the country – claiming that they would discontinue their rooftop solar operations in Nevada, forcing around 650 Nevadans to lose their jobs. In other words, SolarCity, Sunrun, and Vivint, unknowingly admit that their companies would not be solvent without piggybacking off the government’s corporate subsidies. Which brings us to the larger question at hand – should any company, in any industry, be subsidized by the government in order retain profitability? The ability of a company to meet its long-term financial obligations is imperative to stay in business, but a company also needs liquidity to survive its short-term obligations. The latest antics by the top three solar companies in Nevada begs the question as to whether these businesses’ can maintain short-term liquidity as well as long-term solvency without the crutch of subsidization. Economic prosperity and sustainability in the private sector are not attained by using taxpayer dollars to fund the politically well-connected. In addition to the net metering subsidy, the solar companies are also benefiting from a scheme developed by the Governor’s Office of Economic Development called the “catalyst fund,” in which the state government funnels money down to the local government, which then forwards the money on to private companies like SolarCity, Sunrun, and Vivint. Interesting to note that under the Nevada State Constitution, Article 8, Section 9, explicitly prohibits the government from using public dollars to subsidize private companies (loans, credits, etc. are also prohibited). Therefore, does the transfer of taxpayer funds to private companies become constitutional simply because the state uses the “catalyst fund” as an intermediary to dispense the funds? This is the question being posed in a lawsuit against the State of Nevada and the Governor’s Office of Economic Development, wherein the plaintiff – an alternative energy entrepreneur – was compelled to subsidize a politically connected competitor, SolarCity, which received a $1.2m subsidy through the “catalyst fund.” In order for the solar industry to be sustainable for the long term, solar providers must be able to stand on their own merits and not rely on corporate subsidies from the taxpayer.

Blog Tags: 
Issues/Topics: 

Sign Up for Email Updates!Click Here!

View Archives

Posts by Author

Posts by Tag

Big Government (151) Waste (72) Obamacare (69) Budget (66) Healthcare (66) Congress (59) Uncategorized (56) Telecommunications (49) Debt (43) Technology (42) Internet (42) Deficit (42)