Las Vegas Solar Arrays and the Future of Power Utilities

Tovin Lapan offers an in-depth examination of the current state of electricity production in Las Vegas—where casinos and other consumers are looking for flexible options for producing solar energy.

The continued emergence of solar power, however, is "a growing predicament for power companies," according to Lapan. "While corporations are motivated to 'go green,' their push to be more energy efficient leaves the utility with less revenue to maintain the grid and can lead to rate increases. This can cause what energy market observers call the 'death spiral.'"

In Las Vegas, the state-regulated energy monopoly goes by the name NV Energy. With Las Vegas' large companies and surplus of sunshine, NV Energy is challenged by a constant pressure from companies seeking to generate energy on their own land, and on their own terms. "Confronted with increased use of solar power as the systems become more affordable, the company has moved to stabilize revenue," writes Lapan. "Earlier this year, NV Energy decreased the amount it pays residential owners of solar arrays for excess electricity they send into the grid, causing a public outcry."

One way state regulators have attempted to mitigate the impact of distributed solar is by charging an exit fee. The fee is designed to "stave off rate hikes for the remaining customers."

Companies like MGM and Wynn have already decided to pay the exit fee, with others planning to follow suit. Even the city of Las Vegas (located outside famous "Strip" that most people think of as the city) has set a goal to power all municipal buildings and public spaces with renewable energy by 2017. "It too must get PUC approval for its plan though," writes Lapan, "and the commission has mandated the city purchase the bulk of its electricity from one of NV Energy’s solar facilities."