Nevada solar customers have been engaged in a fight against Nevada's Public Utilities Commission's decision to end net-metering and not grandfather in existing customers. SolarCity decided to end new operations in the state as a result and celebrities like Mark Ruffalo came to lead protests against the Commission. Ultimately, the PUC chose to implement a 12-year plan to end net-metering so current residents had the chance to make up the money they thought they'd save when they first installed solar panels.

In this Q+A with Fortune, Nevada PUC Chairman Paul Thomsen argues that ending solar net-metering was necessary, claiming the business model just wasn't feasible anymore. Thomsen points out the state legislature passed a bill in June 2015 that directed utilities to move away from net metering and end the subsidies. Between June and December, when the PUC announced the end of net metering, there was a 500% increase in net-metering customers.

Thomsen: The subsidy we found was $16 million a year. So over 20 years that’s an over $300 million subsidy, or cost shift that non-solar customers were providing to solar customers. Under our proposal, we’ve reduced that subsidy by two-thirds. So they’re still receiving a $100 million subsidy, or cost shift, as we modify net metering going forward.

The question that people bring up is since large-scale solar has gotten so cost effective, why hasn’t rooftop solar? Lydon Rive says competition breeds innovation, and I would say subsidies do not breed innovation. And that big subsidy [net metering] that hasn’t changed in close to 20 years has resulted in this very drastic over pricing of a product that now has to figure out how to compete. That’s where we were.

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