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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