Elon Musk taking direct approach to lobbying Nevada lawmakers on solar energy

Ringo H.W. Chiu / AP

Elon Musk, CEO of Tesla Motors Inc., unveils the company’s newest products, Powerwall and Powerpack in Hawthorne, Calif., Thursday, April 30, 2015. Musk is trying to steer his electric car company’s battery technology into homes and businesses as part of an elaborate plan to reshape the power grid with millions of small power plants made of solar panels on roofs and batteries in garages.

Elon Musk is lobbying Nevada lawmakers to support the development of rooftop solar energy, and he's doing it with a face-to-face approach.

Musk, the chairman of SolarCity and CEO of Tesla Motors, welcomed a group of legislators and a state government leader to his company’s $5 billion Nevada battery factory this evening to discuss how Tesla’s home storage batteries can work in lockstep with rooftop solar.

The event, with presentations from Tesla and SolarCity, is meant to be forward-looking and educational but follows a recent regulatory ruling to increase solar customers’ bills. That order was derided by solar advocates and prompted SolarCity to cease installations here. The meeting represents the Silicon Valley entrepreneur’s most public acknowledgment of the decision and the solar industry’s push to roll back the new rate structure.

At 6 p.m., lawmakers and Gov. Brian Sandoval’s top economic development officer started a tour of the Tesla Gigafactory, for which Musk’s electric car and battery company received more than $1.3 billion in incentives during a special legislative session in 2014. The group will then hear presentations from Tesla’s top technology executive and SolarCity CEO Lyndon Rive. Musk, Rive and Nancy Pfund, a clean energy investor in both companies, will participate in a conversation with the state officials, a SolarCity spokesperson said.

Actor and activist Leonardo DiCaprio, who was at the Gigafactory Wednesday for a meeting, met several of the attendees who participated in the event.

In January, Pfund, a managing partner at DBL Partners, wrote a letter with Silicon Valley investors that criticized the state’s Public Utilities Commission decision to raise costs for all rooftop solar customers. The commission tripled a fixed fee for the customers and slashed the value of credits they receive for generating excess electricity to the grid.

“I stand by my belief that when a state has a chance to lead, as Nevada has and could continue to do, that sends a very positive signal to investors,” Pfund said. “When it steps back, that sends a not-so-positive message.”

Pfund cast the event as an opportunity to discuss how Nevada could remain on the cutting edge of clean energy development. Nevada, she noted, had been a leader in solar job creation and in battery production.

“The one-two punch there is quite compelling,” she said. “We need to talk about how to regain the leadership that policymakers in this state have been forging for several years now.”

Nevada was a key market for SolarCity, which has a headquarters in Las Vegas. The company, whose largest shareholder is Musk, has said Nevada was one of its fastest-growing markets. It cited the regulatory decision here as part of the reason for missing its targeted metric for solar installations last quarter. Since electricity retail rates were more expensive compared to those in other states, rooftop solar had an advantage under the prior rates.

SolarCity, along with the broader industry, is fighting to reverse the commission’s decision. The company is pushing a ballot measure under the No Solar Tax PAC to undo the commission’s decision, and it has called on legislative leaders to convene a special session. These efforts are not expected to be addressed in the prepared program for the Musk event, but they underscore the importance of the Nevada market to firms like SolarCity.

Attention at tonight’s presentations will instead be directed at future opportunities.

Rive, for instance, will give a presentation on how energy storage batteries and rooftop solar can work to reduce strain on the grid and help utilities operate more efficiently. The batteries, which are already being produced at the Tesla Gigafactory, can store solar-generated power so that it can be used at night or during times of peak power usage.

According to a copy of his presentation, Rive will encourage the lawmakers to look differently at the grid and embrace disruptive technologies, such as rooftop solar and home energy storage.

“Nevada is at the forefront of the future of energy,” said the text of the presentation. “But the future of energy will need leadership to enable change.”

That message comes as media reports have portrayed the debate over the future of rooftop solar in Nevada as one that pits SolarCity and Musk against the utility NV Energy, which is owned by Warren Buffett’s Berkshire Hathaway. NV Energy, which favors large-scale solar projects over the residential rooftop solar installations that SolarCity provides, is part of a group that is challenging SolarCity’s proposed ballot measure in court.

Confirmed guests include Steve Hill, the director of the Governor’s Office of Economic Development, and several legislators. Sandoval was invited but had a scheduling conflict. The group includes Assemblyman Paul Anderson, R-Las Vegas, Senate Minority Leader Aaron Ford, and Sen. Patricia Farley, R-Las Vegas, who sponsored the legislation last session related to commission’s decision. The program marks the initial time lawmakers have been inside the factory, which is still under construction.

Underlying the event will be Musk’s presence. His Tesla plant is a marquee economic development project that is regularly credited for raising the state’s profile as a place to do business.

“It’s no surprise that Musk would share his opinions on these topics,” said Eric Herzik, a political science professor at the University of Nevada, Reno. “He has invested in the state and the state has invested in him. On one level, it’s not that different from most any business group or leader talking to legislators. In this case, it’s just more personalized because it’s the actual businessperson rather than a lobbyist group.”

Legislators have been hesitant to take a firm stance on the issue of rooftop solar rates, and it is difficult to predict what effect Musk’s comments might have.

“He is certainly a leader in emerging clean energy industries, so it’s a voice I think many legislators would take seriously,” Herzik said. “The actual clout remains to be seen.”