Where Did Net Metering Go?

Update 9/22/18: On September 19, 2018, the Public Service Commission unanimously approved an extension of the net metering program through March 15, 2019. This will be a very temporary band-aid that hopefully will save some of the Upstate solar jobs that were created by a robust residential rooftop solar industry. We will keep you updated as we work towards a more permanent solution. Read more...

The rules for residential solar for Duke Energy Carolinas customers in the Upstate have changed.

Here’s how.

Long story short

As of August 1, residential rooftop solar no longer makes financial sense because Duke Energy Carolinas, our dominant electric utility in the Upstate, has stopped net-metering and put in place a rate structure that prevents residential customers from consuming the power they produce themselves. We are working with a stakeholder group that includes the Office of Regulatory Staff to try to solve this.

That’s the short story. Here is the long one.

Act 236

In 2014, Act 236 required the investor-owned utilities in South Carolina to kick-start distributed renewable energy options, including residential rooftop solar. They were required to achieve a certain amount of distributed energy interconnections by 2021 by offering various incentives, including net-metering.

1:1 Net Metering

Net metering means a bi-directional meter is installed on a home with rooftop solar. Energy generated by the solar panels is first consumed in the home.

If the solar panels produce more power than the home needs, that energy is fed (and metered) back to the grid. And if the home needs more power than the panels can produce, the home is supplemented by the grid.

When the home is feeding excess power to the grid, the homeowner is credited essentially the same rate on their bill as what they pay when they consume. This is called 1:1 net metering.

Third Party Leasing

Act 236 also allowed third-party leasing to begin in South Carolina. Third party leasing is when a company pays the upfront capital costs to put solar panels on your roof and then leases them back to you at a fixed rate. The power they produce offsets your on-site consumption, just like with net metering of an installation you own.

The most recognizable example of a third-party leasing company in South Carolina is SunRun, but there are many others. Third party leasing extends the benefits of solar to lower-income homeowners who may not be able to afford the upfront equipment costs of solar panels.

Popular & Successful

The residential portion of Act 236 was wildly popular here in the Upstate, partly due to efforts by Solarize SC and Upstate Forever. We partnered with Solarize SC to hold information sessions about the new Act 236 program and Solarize SC added the availability of a financing component as well as a vetted list of certified installers. With these strong advocacy efforts, Duke Energy Carolinas met its Act 236 interconnection requirements much faster than anyone anticipated when the legislation was passed. That cap was met this summer, well before the 2021 deadline.

We Saw the Cap Coming

The approaching cap was debated extensively during the past Legislative session and bills were filed to either lift or extend that cap. Utility lobbyists successfully prevented any of these bills from passing.

So Now the Rules Have Changed

Once the cap was met, Duke replaced its net metering tariff on August 1 with a “buy all, sell all” tariff that they use for larger commercial interconnections. Under this rate structure, a homeowner connected to the grid who installs solar after August 1 will not be able to consume their own generation. They will “buy all” the electricity they need from Duke at the retail rate and they will “sell all” the electricity they generate directly to Duke at a much lower rate, called the “avoided cost” rate.

This – especially the inability to use one’s own production - makes no financial sense to homeowners and essentially stops residential rooftop solar here in the Upstate – both owned and leased - in its tracks. This tariff, applied to new residential solar installations, may even prevent the homeowner from taking advantage of the federal tax credit for residential solar since the power produced is no longer consumed on-site.

What Happens Now?

We're working with a wide range of conservation, utility, solar industry, and other energy stakeholders to find a short-term band aid that will allow time for a longer-term solution to be discussed and evaluated. We hope that we can report progress on this soon.

For more information, contact Shelley Robbins, Energy & State Policy Director, at srobbins@upstateforever.org