Nevada net metering rules demystified

If you're thinking of adding solar panels to your house, the good news is that Nevada does offer net metering. We also have a key tip for net metering customers.

Solar panels in Reno, Nevada
Photo credit: Manny Becerra / Unsplash

When it comes to solar energy potential, Nevada is one of the best places in the country.

That’s why some of the largest utility-scale solar power plants are located in Nevada, such as the 552 megawatt Copper Mountain Solar Facility and the 392 MW Ivanpah concentrating solar facility.

Utilities in Nevada, however, aren’t quite as keen when it comes to solar panels that are owned by homeowners. After all, every kilowatt-hour of electricity that a homeowner generates with their own solar panels represents lost revenue for the utility companies.

For this reason, the utilities in Nevada have fought against policies that give customers full net metering. They were successful until 2017 when Assembly Bill 405 was signed into law, restoring full net metering.

Still, significant damage was done. The solar industry in Nevada is currently much smaller than it should be given its sunny climate: Nevada was only the 9th largest market for solar, ranking behind less sunny states like New York.

The good news? Net metering policies today are much more consumer-friendly in Nevada — but you might not know it as web searches still turn up results about pre-2017 net metering policies. This article will try to clarify things; if you’re a Nevada homeowner, you might learn that solar is more feasible than you thought.

Finally, at the risk of sounding like one of those awful clickbait ads, we have ONE WEIRD TRICK!! to help you maximize your net metering savings. (Spoiler alert: the tip is time-of-use.)

What is full net metering?

I already mentioned the net metering guide you can read if you want to learn about net metering in depth, but the short answer is that full net metering means you receive a full credit for any unused solar electricity you send back into the utility grid.

When you have solar panels, they sometimes will generate more electricity than your house is using at a particular point in time. When that happens, the extra electricity gets sent into the electric grid, and your utility meter records this a credit.

Full net metering means that you get a 100% credit. For example, if you buy electricity from your utility at 20 cents/kWh, full net metering means the utility gives you a 20 cent credit for every kWh of solar electricity you sell back to them.

Net metering policies in Nevada before 2017

Before the latest policy was put in place, there were two key measures that crippled residential solar in Nevada:

  • Every solar customer was charged a fixed fee of up to $40 every month, regardless of their electricity usage
  • Customers received only a 1/3 credit for electricity they sold back to the grid

As described in an article in The Guardian, this policy – which was put in place by Senate Bill 374 in 2015 – immediately crippled the solar industry in Nevada.

An independent study by the state legislature suggests that these fees, which were supposedly put into place to make sure that solar customers paid their fair share of maintaining the electrical grid, were argued in bad faith. As noted in The Guardian article:

An independent study commissioned by the state legislature in 2013 concluded, however, that solar users created a $36m net benefit for traditional customers, a finding NV Energy dismissed as reliant on outdated solar pricing data.

Rather than being a burden, the Nevada legislature’s own study suggests that solar customers pay more than their fair share for maintaining the grid.

Fortunately, this law was repealed a couple years later. Still, the solar market in Nevada shrank significantly, and it is still recovering today.

Current net metering policies in Nevada

NV Energy offers full net metering today. This means your monthly bill will based on the net amount of electricity you use. The utility company will measure how much electricity you take from the grid, subtract your excess solar electricity you sent into the grid, and bill you on the difference.

If you send more electricity into the grid in a single month than you use from the grid, you will receive a 75% credit. For example, if you are on NV Energy’s standard rate, a 75% credit currently works out to about $0.07565 per kWh.

This is an important point, and I found several articles on the internet that get it wrong. You don’t receive a 75% credit for electricity for all electricity you send into the grid, but only when your credits exceed your grid usage. In other words, in months when your electric usage is a net negative, you get a 75% credit for your excess solar electricity.

Importantly, the current net metering scheme also eliminates the $40 fixed charge. Your fixed charges as a net metering customer will be the same as all other residential customers.

Net metering tiers explained

The current net metering rate is called NMR-405 Tier 4 by NV Energy. This is the net metering rate that you want to be on.

There were previously Tiers 1-3 that offered a higher credit for excess solar electricity, but those tiers have expired. Tier 4 is the rate going forward. When you sign up for it, that credit rate will be guaranteed for 20 years.

The old net metering plan (prior to 2017) is called NMR-A. If you installed your solar panels during this time and you are still on this rate, contact NV Energy to have them move you to NMR-405 right away.

There are other net metering rates too, but they apply to commercial customers and customers with systems larger than 25 kW.

Another choice to make: time-of-use versus standard rate

So here’s that “ONE WEIRD TRICK!” that might save you some money.

If you are on the standard billing rate (like most people are), it means that you are billed the same for electricity no matter what time of day it is.

A time-of-use (TOU) plan is different. With TOU, the price of electricity changes depending on the season and time of day.

For example, in Northern Nevada, NV Energy charges 53.4 cents/kWh between 1 pm and 6 pm on weekdays during the summer months, and only $0.06/kWh at other times. In comparison, the rate on NV Energy’s standard plan is about 10 cents/kWh.

So why would you choose to pay so much more? It’s because the summer off-peak rate is about 6.6 cents/kWh - that’s one-third cheaper than the standard rate.

And here’s the kicker: if you are a net metering customer, the credit you receive for electricity you sell to NV Energy is credited according to time-of-use. This is advantageous because summer on-peak hours are between 1 p.m. and 6 p.m., which approximately covers the second half of your solar electricity generation. If you can avoid using electricity during these hours and let your solar array dump its electricity into the grid, you’ll receive a credit at the much more favorable peak rate.

Unlike standard net metering, the rate for net metering with TOU is less than the retail rate: the current summer on-peak credit for electricity you sell to the grid is about 41.1 cents/kWh, and 5.99 cents for off-peak. That’s less than the full rate, but that on-peak rate is still very significant compared to the standard rate.

Should you switch to time-of-use? There’s actually no risk to it, because NV Energy offers what they call a guaranteed lowest rate. After 12 months, the utility will calculate whether the TOU or the standard rate would have saved you more money. If the standard rate is better, they’ll give you a refund and switch you back to standard.

One thing to know is that summer rates only apply from July to September - basically, peak air conditioning season. If air conditioning is your main electricity consumer in the summer, you can make TOU work for you by using a smart thermostat to make your house extra cold before peak hours, and then “coast” on the colder air until after peak hours. If you can do that, you may be able to sell most of your solar electricity to the utility company.

The price difference is much less in the winter, when the on-peak and off-peak rates are about 8 cents and 6 cents respectively.

Northern and Southern Nevada have different rates, which you can look up using the links at the bottom of this article. The TOU plan for homeowners is OD–1–TOU.

Is NV Energy’s net metering plan good?

The latest net metering scheme is a big improvement over the previous plan.

First of all, the basic service charge of $15.25 is the same for all customers, eliminating the punative $40 fee that was in the previous plan.

However, it’s not quite as good as other states. For example, in New York, my utility will “true up” net metering credits once a year rather than every month. This means that I can earn credits during the spring and summer when it’s sunny, and spend them in the winter when it’s not.

NV Energy doesn’t carry solar energy credits from month to month, but instead pays them out every month at the 75% rate. This means that you might “waste” some credits, especially during the spring when it’s sunny and you’re not using very much air conditioning.

While getting paid a 75% credit is worse than being able to carry over a full credit from month to month, it’s still a big improvement over pre-2017 net metering. This may especially be true if you are using the TOU rate.

What abou† other Nevada utility companies?

NV Energy is the biggest utility company in the state, but there are many smaller cooperative and muncipal utility companies too.

The net metering rules are written by the Public Utilities Commission of Nevada, which has no authority over non-profit and municipal utilities. This means that you will need to check if your utility company offers net metering. Some do: for example, Valley Electricity Association in Pahrump does offer net metering.

Unfortunately, several of these utilities don’t offer net metering, so you’ll need to write or call their office to find out.

What are the current net metering and electricity rates in Nevada?

The rates and service charges vary between Northern and Southern Nevada. You check this map (PDF) to find out which service territory you are in.

Here are the current rates:

#Net Metering

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