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Warren Buffett, the “Oracle of Omaha,” has developed a reputation as a savvy, informed businessman and philanthropist. So valued is his advice on investment and improving America’s economy that the Obama Administration has heralded the Buffett Rule – the principle that no household making over $1 million annually should pay a smaller share of their income in taxes than middle-class families pay – as the gold standard in considering ways to reduce income inequality. In short, when Buffett talks dollars, it’s worth a listen.

In recent months, Buffett has been at the center of a national dialogue on net metering because one of his companies provides utility-scale solar energy to its customers. Currently, people who create their own solar energy still connect to the electric grids run by their local utility operators to get power at night, on dark, rainy days, and whenever their solar power cannot meet their needs. Solar-generating consumers can sell back to their utility company any excess power they do not use in exchange for a stated fee. The net metering debate revolves around the extent to which people who do not generate their own solar power should be required to maintain the costs of the electric grid absent financial contributions from solar users.

To Buffett, the answer is all about equity. “We don’t have a problem with net meters,” he recently said during a CNBC interview, “We’re leading in renewables in the country among regulated utilities. The thing is, we do not want our million-plus customers that do not have solar to be buying solar at 10.5 cents when we can turn it out for them at 4.5 cents or buy it at 4.5 cents.”

Buffett acknowledges the importance of renewable energy sources like wind and solar to reducing the carbon footprint. In fact, this value is what drives the current federal subsidy that provides billions in tax incentives to corporations looking to build out solar technologies, he says. Even still, Buffett said of net metering in Nevada, “we do not want the non-solar customers, of whom there are over a million, to be subsidizing the 17,000 solar customers.

This past December, the Nevada Public Utilities Commission modified its net metering rules such that solar-generating consumers will be reimbursed at a lower rate. “The public utility commission decided [current rates were] unfair to the million-plus people who didn’t have solar,” Buffett said, and instead solar generators must now “sell it back at market price.”

Elon Musk, known by most as the Tesla Motors and SpaceX billionaire, as owner of Solar City, once Nevada’s largest rooftop solar provider, is not as optimistic about the NV PUC’s decision. “Elon called me,” Buffett told his CNBC interview. “He was unhappy. He’s being subsidized with his battery plant big-time. Our other customers are actually paying a little more for electricity to subsidize his battery plant. And they were being charged this higher price for electricity. And now we can lower prices a little bit to the non-solar people and the 17,000 can only sell us electricity…he would like the million people to subsidize the 17,000 just like the rest of Nevada is subsidizing his battery plant.”

5 COMMENTS

  1. Even if you the bogus argument about about solar panels owners being paid too much for power uploaded to the grid — that 10-cent per kWh is coming at peak use time when power is selling for upwards of 30 cents a kWh — when raise the connection feeds in Nevada?

  2. I’m lost here. How are non-solar households subsidising solar households? Just because they are being paid more for the energy they export than than that which they imprt off the grid?

    If this is what everyone means by ‘subsidising’ I don’t think it is a very valid point. Surely the important bit is that the energy that solar generators make is renewable and that its not just adding more pollution etc to that which the fossil-fueld power plants are making (arguments about PVPs’ manufacturing embedded pollution aside)? Furthermore, the energy being produced is not traveling great distances before being used and therefore it is doubly sustainable.

    Anyway, this whole argument is going to be pretty insignificant (or more so but from a different angle) as soon as storage takes off. The question being asked then will be how do we keep households with enough solar and storage to be self-suffient from disconnecting from the grid entirely, saving themselves a fortune and lumbering non-solar grid customers with an ever-increasing burden of paying to still have access to an ageing grid infrastructure.

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