Nevada Law Simplifies Solar Leasing

A new Nevada law is expected to increase the number of solar PV installations in the state by making it easier for third parties to finance the installation of renewable energy systems.

Effective since October 1, Assembly Bill 186 clarifies the definition of “third-party ownership” as it pertains to the leasing of solar panels, wind turbines and other forms of renewable energy technologies. Before AB 186, third-party system owners were, under the consensus interpretation of state law, required to be classified as utilities. The requirement was a burden for non-utility entities, which might have had the expertise and capital required to finance system installation but lacked the resources to attain utility classification. Moreover, like in other states, utilities in Nevada are more tightly regulated than other businesses, a fact that further discouraged third-party financiers from pursuing instate leasing arrangements.

As reported by the Reno Gazette-Journal, AB 186 changes all this with a simple tweak:

“There were questions about the legality of third-party ownership,” said Rebecca Wagner, PUC [Public Utilities Commission] commissioner. “So, the new law basically says that if you are a company that provides third-party ownership (for renewable energy systems), you are not classified as a utility and aren’t subject to the same type of regulation.”

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The typical application for a third-party renewable system involves installing solar panels on top of buildings. This makes the program ideal for buildings with plenty of real estate on their roofs. Schools, for example, have eyed solar energy for quite some time. But the high up-front cost for installing solar panels have made them financially unfeasible for cash-strapped school districts.

In the third-party system, a company comes in and shoulders the cost for the installation instead of the school. The company then makes an agreement with the school to lease the solar system either though a low initial rate that slowly escalates over time or a higher flat rate set for a certain number of years.

Leasing solar panels has become a popular option for individual homeowners in some markets, notably California. As the law becomes finalized in December, it will be interesting to see how similar programs progress in Nevada.