May 7, 2018

Net Metering Gets a Lifeline in South Carolina

Solar advocates are hopeful they’ll get to keep the policy that has enabled South Carolina’s rooftop solar market to grow.

House representatives in South Carolina passed a measure late Wednesday night that would raise the state's net metering cap from 2 percent to 4 percent, allowing future rooftop solar customers to earn a credit for the excess power they produce. 

Amendment 9, approved as part of the state's budget bill (HB 4950), gives solar companies newfound hope they'll be able to maintain the policy that has enabled South Carolina's rooftop solar market to rapidly grow, with the current net metering cap approaching and time running out on the legislative session. 

A previous attempt to raise the net metering cap was defeated last month on a technicality raised by utilities Duke Energy and South Carolina Electric & Gas, which is owned by Scana.

“Last nig​ht's​ vote is an important and welcome step forward for energy freedom in South Carolina," said Thad Culley, regional director at Vote Solar. "Recent months revealed both the enormous support from residents, businesses and organizations across the political spectrum for clean energy options, lower utility bills and 3,000 solar jobs in South Carolina, and the lengths that utility monopolies will go to undermine all three." 

There are still more hoops for the net metering measure to jump through. Having passed in the State House of Representatives, HB 4950 will head next to a budget conference committee where the bill will have to be reconciled with the State Senate's version, and the solar amendment could get cut.

The Speaker of the House and the Majority Leader in the Senate are both expected to appoint conferees today, each selecting two Republicans and one Democrat to join the group. The last day of the South Carolina legislative session is May 10. However, the budget bill can linger until June 30 at the latest.

The earlier bill that would have abolished South Carolina's net metering caps entirely (HB 4421) also sought to exempt small solar projects from property tax, require utilities to provide a "disaster readiness incentive" to encourage the installation of solar and storage, and prevent utilities from recovering the cost of lost revenues from the net metering program, among other things.

The tax provision ultimately tripped up the bill, because tax exemptions in South Carolina are required to pass with a two-thirds vote. HB 4421 passed in the House with bipartisan support 61 to 44, short of the two-thirds requirement. 

Duke Energy took issue with the legislation, viewing it as unfair and one-sided. 

"House Bill 4421 required utilities like Duke Energy to offer rooftop solar to customers at a subsidized, anti-competitive rate at the same time it prevented utilities from recovering costs," Duke spokesperson Ryan Mosier wrote in an email last month. "This is not about utilities protecting profits.

 It’s about having a fair system, paying private solar customers the same competitive price we pay for other solar energy, instead of above-market rates that result in higher costs for all customers."

"Having others bankroll the lucrative earnings of the rooftop solar industry is not the answer," he added, calling for "commonsense" legislation that "balances the interests of all who call South Carolina home."

Solar companies, customers and some lawmakers in the state have been highly critical of utilities of late, because of the failed V.C. Summer nuclear power plant debacle. The plant, which was under development by Scana and partner Santee Cooper, racked up $9 billion in expenses by the time it was canceled, having never delivered a single electron. The cancellation has increased costs to customers by nearly $30 per month.

"Ironically, the people that have made it the highest power bill in the country — $27 a month on average in SCE&G territory — are the same people that don't want to allow [consumers] to save money on their power bills with solar," said Tyson Grinstead, director of public policy at Sunrun. "It's just rich."

Duke, which was not involved with the V.C. Summer plant, has been taking a more active role in commenting on solar legislation because of the tensions surrounding SCE&G and parent company Scana, he posited. 

"I think Duke is sort of the utility that's leading the charge," said Grinstead. "It's probably easy to see why, given that legislators have publicly said that Scana has no place suggesting what laws should and shouldn't be passed when it comes to South Carolina's energy future."

James Koehler, vice president of energy markets and policy at Palmetto Solar, holds a similarly critical view of the state's utilities. 

"We’re a homegrown company here. Between us and others, there are nearly 3,000 working in solar in South Carolina," he said. "The same monopoly utilities that forced ratepayers to foot the bill for a failed $9 billion nuclear plant are now limiting customer choice and threatening thousands of good jobs in renewable energy. Why are we listening to them?"

According to Sunrun, Duke Energy Carolinas is likely to hit its net metering cap within the next couple of weeks, and SCE&G is expected to hit its cap by the end of the year. Without net metering, rooftop solar would be far less attractive, given that South Carolina has relatively low variable rates, which limits how much of their energy bill customers can offset by going solar. 

Grinstead said he's hopeful lawmakers will find an acceptable solution that saves solar jobs and keeps the state's solar market growing. 

"South Carolina has been, over the last 10 years, a state that has increased employment and has been known for being 'open for business,'" he said. "We're hopeful that the leaders of the state will make that slogan apply to solar as well as it does to other industries."

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