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Last week, the first power provider in South Carolina hit an important clean-energy milestone, but that progress is now likely to stop cold.
It’s a testament to the popularity of rooftop solar that Duke Energy Carolinas is already producing 2 percent of its power from solar sources, years earlier than expected.
But even as thousands of households across the state have adopted the option, the company is now able to stop offering net metering, the program that makes it so attractive.
For the foreseeable future, Duke Energy Carolinas customers that want to install new solar power systems would have to sell everything they produce to the utility at a discounted rate — and buy everything they need to power their home at a retail rate.
Typical solar-powered homes often produce more energy than they need during the day, sending that surplus into a utility’s grid. At night, when the sun is down, those homes draw power off the grid. Net metering ensures customers are given a credit for their extra power that’s equal to what they typically pay.
But now that Duke Energy Carolinas has hit the 2 percent cap, state regulations allow it to cut off the net metering program. It stopped accepting net-metering applications on Wednesday from customers in its service area in the Upstate.
“Customers can still install solar — and sell the electricity they produce to Duke Energy at the same price the utility pays for electricity generated by large solar power plants — even though the company has reached the capacity limit,” Ryan Mosier, a spokesman for Duke, wrote in an email.
South Carolina Electric & Gas isn’t expected to hit its 2 percent cap until sometime next year, and Duke Energy Progress, a subsidiary of the same company as Duke Energy Carolinas, isn’t expected to hit its cap in the Pee Dee until the end of 2020.
A group of state lawmakers tried to broker a deal this year that might raise the cap and let more customers take part in net metering, to no avail. For those in the Upstate that would now be compensated at wholesale rates, the decreased savings make solar less appealing, installation companies said.
“It’s significantly less attractive of an investment,” said Craig Knowlton, a vice president at solar installer Alder Energy.
Mosier said that a Duke Energy Carolinas customer that switches to solar without net metering would earn about $480 a year in wholesale rates for an 8 kilowatt system, compared with a typical yearly bill of $1,368 for a residential customer.
But that equation assumes that everything produced by the solar system goes directly into the grid, and all the power used by the home is pulled off the grid.
That’s another catch as net metering ends: Residential solar producers are no longer supposed to plug in their panels “behind the meter,” meaning they can’t use them to both power their homes and send energy into the grid, said Sarah Johnson of the S.C. Office of Regulatory Standards.
Those are the standards applied to solar farms, Johnson said, and as each utility hits the solar cap, every new homeowner who installs solar will be treated, in essence, like a miniature solar farm.
“The system design itself has to materially change at that point,” she said.
The only other option, Johnson said, would be to power a house with solar panels but remove the home from the grid completely. That’s also not the most attractive option for consumers, because there’s no opportunity to generate power at night, and batteries to collect the excess power during the day can prove costly and high-maintenance.
Johnson said that if a homeowner was found to violate the rules barring them from connecting panels behind the meter, the utility company would have the right to cut them off. Mosier also said that Duke would not allow customers in areas that have been capped to both use and sell power from solar panels.
“A customer can power their home as they see fit if they are not connected to the grid,” he wrote.
But Knowlton was skeptical, and said that some of the finer points of solar regulation may have to be hashed out before the state’s Public Service Commission.
“I don’t see how the utility would tell you you don’t have the right to do that, if it never goes into the grid in any way,” he said.