Solar Revolution: New State Law Aims to Make it Easier to go Green in NC

Dan Kessler wanted to save money when he decided to install solar panels on his family’s Gray’s Creek house.

“One of the biggest reasons was because our electric bill was like $200 and some a month,” Kessler said.

“And I look at it as a ‘rent or own.’ If I pay $200 to an electric company, then what do I really see out of it?”

Solar panels mounted on rooftops aren’t a common sight in North Carolina neighborhoods, but that may be changing. The state legislature in July approved a wide-reaching bill that aims to grow the already burgeoning solar industry. In addition to the expansive solar farms in rural counties already generating power for utility companies, this new law is meant to make it easier for homeowners and businesses to install their own panels.

Republican state Rep. John Szoka of Cumberland County sponsored the solar bill and fought to push it through the legislature despite opposition from within his own party — as well as a veto threat over a provision dealing with wind farms. Gov. Roy Cooper ended up signing the bill July 27, calling it “critical for the future of significant increases in our already booming solar industry.”

Even homeowners without solar panels may benefit, as the law promises to help hold down electric bills. Large-scale customers such as Fort Bragg, Walmart and manufacturers may now find it easier to buy solar-generated energy, too.

One key provision for homeowners and businesses is through a practice called third-party leasing. This has customers lease solar equipment installed on their property instead of buying it.

“There has been some leasing done in North Carolina, but at a very small scale,” said Julie Robinson, a lobbyist for the Sustainable Energy Association.

But leasing has been in a legal gray area, she said, and the industry wanted a law clarifying that it is allowed.

Szoka’s law spells that out.

In theory, third-party leasing will reduce or eliminate upfront costs of buying and installing solar panels, which vendors said can be $15,000 to $30,000 for a homeowner. Big retailers also are interested in leasing solar power equipment, Szoka said.

But it’s not yet clear whether North Carolinians will see a wave of solar companies offering lease packages for homeowners.

“We have so many good, really good loan financing programs right now, where customers can finance their solar systems over many, many years now, that I don’t know that leasing’s going to be that attractive, frankly,” said Stew Miller, the president of Cary-based Yes Solar Solutions.

Greg Olenar, the director of sales at NC Solar Now in Raleigh, also questioned whether there is a viable model for people to lease solar equipment instead of purchasing it. NC Solar Now installed Kessler’s solar panels in Gray’s Creek.

Szoka said he has been told that large companies, such as Walmart, prefer leasing.

A Walmart spokeswoman praised Szoka’s solar power bill but did not say whether the company would pursue third-party leasing at its North Carolina properties. “It is our intention to explore and utilize the new clean energy opportunities that exist for our North Carolina operations,” spokeswoman Michah Ragland said.

The company uses a mix of on- and off-site solar power to supplement its electrical needs, she said. “Together with renewable electricity from the grid, an estimated 26 percent of our electricity needs globally are supplied by renewable sources,” she said.

Fayetteville treats solar differently

Whether through leasing or buying, many in Fayetteville will find installing solar at their homes or businesses is more complicated than elsewhere.

That’s because the Fayetteville Public Works Commission has different rules than most other places about connecting with solar.

Unlike most of the state’s electricity customers, the PWC’s customers are not allowed to connect solar panels directly to the wiring in their home or business, a spokeswoman said. The PWC requires customers to connect their solar equipment directly to the PWC’s grid and sell their solar-generated electricity to the city-owned utility.

This practice is known as “buy all, sell all” in solar power circles.

A PWC customer homeowner with a solar system would buy all of the power he uses from the PWC at the retail rate of 10 cents per kilowatt hour. Meanwhile, the solar array on the roof would have a separate meter attached to it. Power would flow from the solar panels into the PWC’s system, and the PWC would pay the homeowner 4 cents per kilowatt hour generated.

Kessler, the Gray’s Creek homeowner, gets his electricity from South River Electric Membership Corp., which allows him to wire his solar panels to his home.

With a 30 percent federal tax credit to offset the installation cost, Kessler said his final cost will be about $14,000.

Kessler expects his solar panels to lower his monthly utility bill through an industry practice called net metering.

When a person’s home is generating more power than it is using, such as when it’s empty during the day, the power company pays the homeowner retail rates for the electricity coming from the solar panels. Net metering has been one of the main attractions for homeowners to install panels. Solar aficionados like to say their electric meters “run backward.”

But net metering is expected to change under the new solar law.

The law calls for the North Carolina Utilities Commission to review net metering rates and establish new rates that account for the fixed costs of having homes connected to the electrical grid. This has spawned fears that the net metering rates paid to solar homes will decline, and make solar power less enticing for potential customers.

Existing solar operations are guaranteed to be paid their current rates until Jan. 1, 2027.

The net metering provision has no effect on Fayetteville PWC customers, because the PWC does not do net metering.

Customers with Duke Energy will soon be able to participate in a solar rebate program to make it less expensive to install solar power equipment. Vendors and customers are awaiting the details.

“It will be our job to translate the requirements in the bill into actionable programs, then the North Carolina Utilities Commission must approve those programs,” Duke Energy spokeswoman Tammie McGee said.

Several programs are expected to begin by early 2018, she said.

Solar revolution continues

Through much of the state, the law could usher in a new phase in North Carolina’s solar-energy revolution. In the past 10 years, solar has grown rapidly as Tar Heels took advantage of state and federal tax credits and renewable energy mandates. Solar energy farms have become a common sight in the countryside.

As of 2016, North Carolina ranked second nationally in solar energy production, with 3,016 megawatts of capacity, according to the Solar Energy Industries Association.

Szoka’s bill was passed after months of negotiations with Duke Energy, the state’s largest electric utility, as well as the solar industry and renewable energy advocates.

Szoka brought the energy stakeholders together last fall to begin months of negotiations, said Allison Eckley, the communications manager for the North Carolina Sustainable Energy Association.

“He steered us in the right direction when we needed it,” Eckley said.

For Duke Energy, the legislation eases a requirement that said if someone builds a solar farm, Duke must buy the power it generates. Szoka said Duke has had to buy the electricity even if it costs more than the power Duke generates on its own, and even if the solar farm is far from Duke’s infrastructure.

“It has led to overloading some of the substations in the grid in the eastern part of the state,” Szoka said.

The new law opens the door for a bidding process — people who want to sell solar energy to Duke would compete against each other, and their offers would have to be at or below Duke’s cost of generating power. Further, their solar farms would have to be built in areas where Duke needs them.

“Those two changes in and of themselves will save about $850 million for ratepayers over the next 10 years,” Szoka said. “That’s a pretty big number.”

Critics from right and left

Despite being promoted as a compromise between renewable energy advocates and Duke Energy, the solar law had harsh critics from the political right and the left.

Francis De Luca of the Civitas Institute think tank in Raleigh, which usually takes politically conservative positions, contends the law is “solar cronyism” and that Duke’s rebate program will lead to “residents who are not installing solar are subsidizing those who are installing solar.”

From the left, the NC Warn environmental group wanted the governor to veto Szoka’s bill.

Executive Director Jim Warren alleged its provisions mask an effort “to kill rooftop solar in most states of this nation” and “and protect Duke’s monopoly against the competition that threatens its business model of building power plants and raising rates.”

Renewable energy advocates were also dismayed by a provision forced onto the bill by a senator to impose an 18-month moratorium on wind farms.

Cooper had misgivings about the wind power moratorium, but he signed the bill and tried to address the wind provisions with an executive order.

Not everyone will be happy with the new solar law, Szoka said, but changes in policy were needed as the industry matures.

“The bill overall is a logical, rational movement toward a much better energy policy that reduces costs for consumers across the board and gives consumers — both business and individual — options and choices to participate in primarily solar and other green sources of energy,” Szoka said.

“So if they want to do it, that’s good — they can.”


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