ARI SHAPIRO, HOST:
Now to Nevada, where the home solar business is in turmoil. Regulators have started to phase out incentives for homeowners who put solar panels on their houses. And so big solar companies are ramping down business in the state and laying off hundreds of workers. As NPR's Jeff Brady reports, this once-booming business has slowed to a trickle.
JEFF BRADY, BYLINE: The warehouse at Robco Electric in Las Vegas used to be filled to capacity with pallets of solar panels stacked high. Now it's nearly empty.
ROB KOWALCZIK: The PUC made a decision, and it just devastated our industry.
BRADY: Rob Kowalczik is the owner. He's all business, talking about how the Public Utilities Commission pretty much killed off residential solar in Nevada. But when it comes to his workers, he chokes up.
KOWALCZIK: The hardest thing is to lay people off. That's it, sorry.
BRADY: How many people did you have to lay off?
KOWALCZIK: The day before Christmas Eve, we laid off 15, and we're up to 25.
BRADY: One of the 25 is Connie Berry. She worked as an installer.
CONNIE BERRY: It's been two months now since I got laid off, and I was hoping to get a call back, you know, thinking that things would turn around. I guess that I'm still hopeful. I've got my tools, and I'm ready to go.
BRADY: Out in the Robco Electric parking lot, it's the middle of the day, and two of the company sales cars are there. Sales and Marketing Manager Tim Webb says last year, they would have been out chasing down new leads. And he says there were a lot of other solar companies on the road, too.
TIM WEBB: It was kind of, like, the solar gold rush here. All these companies flocked into town, set up an office and sold systems. So now they are gone. There's just a few of us remaining.
BRADY: The big companies pulled up stakes after the PUC changed the rules for something called net metering. That allows a homeowner with solar panels to sell excess electricity they generate to the utility at retail rather than wholesale rates. It's a great deal for a homeowner. They can do something good for the environment and save money on their energy bill.
But here's the rub. Every kilowatt generated on someone's roof is one less the local utility sells. And utilities use that money to maintain the electrical grid. In this case, the local utility, NV Energy, is owned by Warren Buffett's company, Berkshire Hathaway.
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WARREN BUFFETT: We do not want the non-solar customers to be subsidizing the 17,000 solar customers.
BRADY: Speaking on CNBC last month with what sounded like a waterfall in the background Buffett echoed an argument utilities across the country are making. When solar customers don't pay to maintain the power grid, that leaves everyone else to pick up the tab. On top of that, Buffett says his utility can produce solar power from large centralized plants for less money than rooftop solar.
BUFFETT: We do not our million-plus customers that do not have solar to be buying solar at 10-and-a-half cents when we can turn it out for them at 4-and-a-half cents or buy it at 4-and-a-half cents.
BRADY: SolarCity co-founder and CEO Linden Rive says utilities like NV Energy are just trying to protect their monopolies.
LINDEN RIVE: They want to deploy the infrastructure. They do not want to let consumers deploy that infrastructure because then they don't get a regulated return on that infrastructure.
BRADY: Rive wants big changes for the country's power grid. Instead of central generators delivering electricity out to customers, he imagines a grid where customers produce their own power, too, and compete with the local utility. Under Rive's vision for the grid, there's a smaller role, and less profit, for utilities.
RIVE: We need them to manage the lines and let the rest be a competitive market. Competition will drive innovation which will then create products that we can't even think of today.
BRADY: SolarCity and others plan to challenge what's happened in Nevada first in the courts and then with a ballot referendum in November. Meantime, though, solar customers are the big losers.
Hey there, nice to meet you.
DALE COLLIER: Nice to meet you.
BRADY: Dale Collier's home in Henderson outside Las Vegas has 56 solar panels on the roof. He refinanced his house to pay for them. Up until the rules changed, he was saving about $150 a month on his power bill. Once the incentives are phased out, though, he figures having solar panels will cost him money.
COLLIER: You know, I thought this was the smartest thing I ever did. Now I think it might be one of the stupidest things I ever did.
BRADY: NV Energy asked regulators to grandfather in people like Collier, but the PUC said all solar customers, new and existing, should get the same deal. The question now is whether Nevada's experience will spread to other states. Solar advocates successfully preserved incentives next door in California. Now they're focused on another sunny state, Arizona, where the next battle over residential solar incentives appears to be heating up. Jeff Brady, NPR News.