Duke Energy Proposes ‘Community Solar’ and Other Renewables Programs for N.C.

Duke Energy Corp. plans to seek bids for at least two megawatts worth of “community solar” projects in North Carolina this year under proposals filed with regulators to comply with a new state law expanding access to renewable energy options for its utility customers.

Community solar programs involve a central solar project which sells shares to residential or business customers who want to use solar power to offset some of their monthly power use. Charlotte-based Duke (NYSE: DUK) proposes to have subsidiaries Duke Energy Carolinas and Duke Energy Progress each seek competitive bids for a one-megawatt solar project in their respective service areas in North Carolina.

Each project will offer 4,300 shares in the project. A customer who buys a share would get 34 kilowatt-hours of solar energy a month, says Duke spokesman Randy Wheeless. An average residential customer typically uses close to 1,100 kilowatt-hours in an average month. Commercial customers typically use substantially more. Offering small shares will allow customers to decide how much of their power they would like to come from a renewable source.

The idea is to allow residential and business customers who don’t want a solar project installed on their property the chance to buy additional clean power.

Industrial program

The price per share will be determined by the bids from independent developers. The bids will be requested immediately after the N.C. Utilities Commission approves the community solar program, Wheeless says. But the company is already talking to developers who might have projects proposed that would fit in the program, he says.

Duke also filed its proposal for resurrecting and expanding the Green Source Rider program Duke Carolinas offered its industrial-scale users in a pilot program from 2014 through 2016. The revised program would seek to pair industrial-scale customers (one megawatt of peak demand at a single site or five megawatts at multiple sites) willing to pay a premium for renewable energy with developers who can build solar and other renewable-source power projects to provide it.

The two filings follow up on Duke’s proposal late last week for a $62 million rebate program for customers who install residential and commercial solar projects.

State law

All three programs are mandated in the Competitive Energy Solutions for NC Act adopted passed last year. The law, commonly referred to as HB 589, also requires Duke to establish a competitive bidding process for the construction of 2,660 megawatts of new solar construction in the Carolinas through 2021.

“Our customers want more renewable energy options and both these programs will provide alternatives to on-site solar power,” said David Fountain, Duke Energy’s North Carolina president.

“We look forward to working with our large customers as well as environmental organizations, municipalities and solar developers to bring these offerings to areas where they are most desired.”

Both the programs outlined in the Thursday filings are designed to have participants pay the full costs. There will be no subsidy of the programs from rates paid by general customers.

Testing demand

The initial community solar proposal is modest. Wheeless says it is designed to test demand for community solar in the state. Until HB 589, it had been illegal for independent developers to set up such a program, so there is not a track record in North Carolina.

“We are looking for projects in or near a major metro area, so that there is a good base of potential subscribers,” he says. But the projects would not have to be in urban centers. He says, by way of example, “We wouldn’t necessarily be talking about a solar project on Trade Street (Uptown), but something like Gaston County might work.”

One will be set up in the western part of the state served by Duke Carolinas and one is likely in eastern North Carolina, where most of Duke Progress’ customers are, he says.

If the program proves immediately popular, Duke could seek proposals for additional projects before the end of the year.

The law allows Duke utilities also to build and own community solar projects themselves. But Wheeless says there are no plans for that at this time.

Broader appeal

The Green Source Rider is a proposed five-year program set up to encourage the construction of up to 600 megawatts of new renewable projects for industrial customers. The customers would sign long-term contracts to buy the power ad a contracted price.

The law requires Duke to set aside 100 megawatts of new projects for military bases and 250 megawatts for the University of North Carolina system.

The pilot program was more restrictive and in the end arranged solar power contracts for only three industrial users in the state. The new program is designed to have a broader appeal and covers significantly more of the state.


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