Elon Musk’s Tesla Motors announced Monday it will back a ballot initiative amending Nevada’s constitution to give lucrative subsidies to SolarCity, a rooftop solar company he chairs.
“Solar energy is the cheapest energy today in the state of Nevada, and the Energy Choice Amendment will enable Tesla and all Nevadans to choose solar,” Musk said in a public statement.
The amendment states that Nevada’s monopolized electricity markets be opened to outside competition to minimize regulatory burdens, but does not define how this would be done.
The amendment is also backed by Nevada Democratic Sen. Harry Reid. The amendment’s supporters need to turn in at least 55,234 valid signatures by June 21 to get the amendment on the ballot.
Musk and liberal billionaire Warren Buffett, the third richest man in the world with an estimated net worth of 60.8 billion, have been locked in an escalating conflict over solar subsidies since December.
If the ballot initiative is successful, Musk would effectively reverse Buffett’s major December victory, when Nevada’s Public Utilities Commission (PUC) imposed rules that effectively ended net-metering. Net metering had been forcing electrical utilities to buy the energy produced by rooftop solar panels at or near retail rates.
Many states have enacted net-metering policies for homeowners with solar panels. Rooftop solar companies have pushed these policies as a way to encourage solar power and fight global warming. Since the demand of and price for electrical power fluctuates widely on any given day, net-metering is effectively a wealth transfer from Buffett’s utilities to Musk’s rooftop solar companies.
The electrical utility NV Energy was purchased by Buffett for $5.6 billion in 2013. The regulatory changes which ended net metering allowed NV Energy to pay solar customers 75 percent less for the electricity they sell back to the grid, according to a sample bill posted on the website of a utility.
Musk SolarCity stock was devalued by roughly $165 million in a single day as a result of Nevada’s policy shift.The PUC’s decision to curtail net-metering payments to SolarCity’s customers infuriated the company, causing it to make good on its threat to end 550 jobs in the state.
Several other companies, such as data center operator Switch, have announced their support for the amendment. Other companies, such as Las Vegas Sands Corp., MGM Resorts International and Wynn Las Vegas LLC, applied to leave NV Energy’s power grid last year and have paid $126 million in fees to do so.
Musk has already benefited from billions of dollars in taxpayers subsidies from Nevada. In 2014, Musk received $1.4 billion from Nevada taxpayers to build a “gigafactory” for Tesla Motors. SolarCity also got a large cash payout to move to Nevada.
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