Challenge of NC Law Aims to Open Solar Markets

When Duke Energy connected the solar panels on the roof of a Greensboro church to its grid last week, solar advocates gained a symbolic but tentative victory.

Faith Community Church serves as a test of a North Carolina law that says only public utilities like Duke can directly sell electricity.

The advocacy group NC WARN owns the $19,000 solar array and wants to sell the electricity it generates to the church, despite the law, for about half what Duke charges.

The challenge, now before the N.C. Utilities Commission, is part of a growing move to bring solar power to rooftops across the state. A bill before legislators would also allow third-party sales, as they are called, by non-utility energy developers.

Easing utilities’ grip, advocates say, would let energy companies offer financing options such as leasing that let customers avoid the steep upfront costs of solar installations. Twenty-four other states already allow third-party sales.

“Everything is lining up toward more solar, not less, and the need for more competition and open markets,” said Jim Warren, executive director of NC WARN.

The group has asked the Utilities Commission to find that NC WARN is not subject to utility regulations.

While Duke Energy agreed to connect the Greensboro church to its grid, it says NC WARN’s power sales will be illegal.

“Our issue here is not with the church,” said spokesman Randy Wheeless. “We think the law is pretty clear, but WARN sees it otherwise, so we’ll see how the commission rules. We feel confident about it.”

In Raleigh, free-market Republicans and progressive Democrats have lined up behind a bill allowing third-party sales.

The Energy Freedom Act says renewable energy developers who sell electricity built on a customers’ property won’t be considered utilities. Corporations including Wal-Mart, Lowe’s and Target back such a measure.

Duke is officially neutral on the bill. But in talking points distributed to legislators, the company said third-party sales would remove government oversight, expose customers to predatory pricing and pose reliability problems.

Solar in South Carolina

The bill’s primary sponsor, Fayetteville Republican Rep. John Szoka, said House leaders support the measure. It remains alive for this session, he said, despite lingering in committee since March.

Szoka predicts the measure would open up competition among energy companies and save consumers money.

“Duke is still mainly saying they want an overall, coordinated look (at renewable energy issues) and not just do them one at a time,” he said. “My response is, South Carolina has rooftop solar, and if it’s good enough for your company in South Carolina, it should be good enough for your company in North Carolina.”

South Carolina last year passed comprehensive solar legislation that Duke and green-energy advocates alike supported.

Wheeless said Duke might be willing to accept third-party sales in North Carolina if, as in South Carolina, they’re tied to other measures the company likes.

South Carolina’s legislation lets homeowners lease solar panels from developers. Utilities may recover the costs of solar installations, as they do for traditional power plants. Utilities can also recover losses from net metering, which requires them to pay customers for the excess energy solar arrays generate.

North Carolina became the nation’s fourth-largest solar state because of the frenetic growth of utility-scale solar farms.

Duke announced a $500 million investment in large-scale solar in the state last year. It bought a majority interest in REC Solar, which develops commercial solar projects, in February.

‘Additional choices’

But Duke acknowledges the trend is shifting toward consumer-level solar rooftops. Emily Felt, Duke’s director of renewables strategy and policy, predicts that customers will increasingly turn to solar as utility rates rise, solar prices fall and net metering helps recoup costs.

One of the nation’s largest energy developers, NRG, says the growth of solar farms only whetted the appetites of North Carolina homeowners. NRG Home Solar opened an office in Charlotte this year to install residential systems.

Because North Carolina doesn’t allow third-party leasing, NRG installs solar arrays under 20-year loan contracts that let customers avoid most upfront costs.

“Third-party sales really would benefit the consumers more than our company,” said Kelcy Pegler, president of NRG Home Solar. “They would have additional choices about how to buy their electricity.”

 

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