NV Energy Net Metering Cap and Choosing a Solar Company for the Long Haul

July 13th, 2015

We recently saw in the newspaper that NV Energy is going to reach the 3% Net Metering Cap way earlier than expected. The articles are here and here.  To say this took us by surprise is an understatement. One thing I want to talk about is the importance of why it is important to choose a company that will stand through the tough times that lay ahead. I personally have witnessed the industry go through the changes when I worked in the solar industry back east.

I used to work for a top solar company, lets call it Big Green Solar Co., back east. The company was a pure Solar and Energy Efficiency company. We were the on the INC 500’s fastest growing companies and ranked #1 for energy. This was a big deal 5 years ago. But this is when things started to unravel with the solar industry. Half our business was in PA and the other half was in MD. Pennsylvania had a lot of its rebates and grants disappear overnight and the SREC market was worth 1/10th of what it was. Once this happened Big Green Solar Co. was doomed.

High Expense to Income Ratio a Problem for some Solar Companies

The reason why Big Green Solar Co. failed was mostly it had such a high expense to income ratio. There was a lot of money spent on advertising and the overhead to just have operations work. Sure the company made 11 million dollars, but it was not spending money like it was going to keep making 11 million dollars, but like it was going to make 15 million dollars.

Times got tough at my old company and we were desperate. They fired Sales people who were seasoned and hired new sales people repeatedly in the territories these guys have worked for years. They also started selling “Maintenance Packages” on solar. This is a sign of a company that is desperate for cash flow because solar does not need any maintenance other than a quick rinse with a hose. There were really high referral bonus checks of $1,000 being offered for sending your friends and family. The problem was collecting the referral bonus after their systems were put in. The other question you should have is, why are you making a $1,000 off your friends and family instead of insuring that they would get a competitively priced system?

One big alarming thing that I saw on the inside was that this top company in the industry was doing was not paying its vendors. Schuco and LG stopped sending panels to Big Green Solar Co. because they were not able to make payments. I am not saying this is not typical of all companies, just a problem that comes when companies are trying to stay afloat. I do not think the owner of Big Green Solar Co. meant for this to happen. The people who worked there believed in going Green and saving people money. But their doom was the market evaporated away almost instantaneously.

There is a lot of similarities that I see are going to happen. If you go with a company that only does solar you have to ask, how long can they be in business if there is no business to be had?  Now can most companies that offer huge incentives like huge referral bonus’s and spend a lot of money on advertising on radio or TV keep going?  If they can, do you feel comfortable knowing that they probably overcharged their customers a lot in order to keep their doors open 6 months after a utility made solar an unviable option?

Go with an Electrical Contractor

My Suggestion about who to choose when going solar is an Electrical Contractor. The reason why I choose to work for an electrical contractor is that it is diverse and does not depend solely on the solar market to do well. Take ROBCO Electric for example, half our business income is Electrical Contracting that we have been doing for 18 years. We are not suddenly going to be doing electrical work, we already have been.  Because we have been doing Electrical Contracting for nearly 20 years our overhead in the solar department is very low. If we can’t sell solar in 6 weeks we are not in any danger of closing our doors. So when a company promises you a 10,15,20-year maintenance agreement, you better make sure you know that they will be around to fulfill their promise to you.

What do we think will happen at ROBCO Electric with the 3% NV Energy Net Metering Cap?  We are not sure. If it is met it will probably be extended, but that does not guarantee that they will extend the cap when it is met. They might wait 3 months to extend it and the stipulations are unknown to what is going to happen for anybody who goes solar after the 3% is met. Think of all the Companies that are here in town that just do solar, 75% of them will more and likely disappear because they are a one trick pony. I personally saw the heartache customers went through with the previous company I worked with, and I really do not want to see people lose money.

27.9 MW is left of NV Energy's Net Metering Cap

27.9 MW is left of NV Energy’s Net Metering Cap