Rooftop solar companies, including Elon Musk’s SolarCity, are facing huge financial hurdles as state governments cut back on lucrative green energy subsidies and reform regulatory schemes.
“Is the solar industry’s boom for real, or is it being propped up by hefty government subsidies?” Richard Martin asked in a Massachusetts Institute of Technology (MIT) Technology Review article published Friday. The article speculates the rooftop solar industry could be a taxpayer-backed bubble on the verge of collapse as states reform net metering rules for rooftop systems.
Martin cites recent solar panel policy changes in Nevada, California and Hawaii as evidence, and 20 other states are considering changing laws that would dramatically alter the economics of rooftop solar. Without net metering and other such subsidies, rooftop solar power is only likely feasible in two states.
Without net metering payments, rooftop solar “makes no financial sense for a consumer,” Lyndon Rive, CEO of SolarCity, admitted to The New York Times last week.
Rooftop solar problems really began after Nevada introduced sharp cutbacks to its net metering program when Elon Musk, who is the chairman of the solar company SolarCity, lost a regulatory battle to fellow liberal billionaire Warren Buffett. The policy shift caused Musk’s SolarCity stock to be devalued by roughly $165 million in a single day.
SolarCity once had stock valued at nearly $86 a share. Its share price now sits at $17.38, as of Monday afternoon.