Whether that growth continues will depend on how the state navigates the coming months, as two other utilities—SCE&G and Duke Energy Progress, another Duke utility—are expected to exercise their prerogative to cap net metering.
A Duke Energy spokesman said net metering in South Carolina was never meant to be permanent.
“Net metering was agreed to … as a temporary incentive to help a nascent solar industry grow and help customers overcome the high cost of going solar,” said Ryan Mosier, spokesman for Duke Energy South Carolina. “Solar companies have benefited greatly from the incentive (and) the costs of installation are shrinking rapidly. We need to get to a long-term, sustainable system that is fair for everyone.” He declined to elaborate on any specific path forward.
“We made our market a little too hot in South Carolina,” said Bruce Wood, a veteran installer and owner of Sunstore Solar, who acknowledged Duke’s position. “We will get a good solution worked out.”
Net Metering Has Been Targeted in Other States
This is just the latest example of U.S. utilities fighting over net metering. Kentucky’s solar industry, for example, successfully fought utility efforts to get rid of the practice earlier this year. Indiana and Michigan recently moved to phase out net metering.
The solar industry saw what could happen in 2015 when Nevada ended its net-metering program. Major solar installers, including Sunrun and SolarCity, announced they were stopping local operations, closing offices and cutting hundreds of jobs. That state reversed course in 2017, when Gov. Brian Sandoval signed a bill restoring net metering after the political backlash.
Utilities have argued that customers without solar panels are subsidizing those who have them. Solar advocates contend that residential rooftop solar provides benefits to utilities and the electrical grid and that utilities just want to preserve their monopolies.
One practical effect in South Carolina will be substantially less favorable economic terms for future solar customers. Duke has said that customers who add solar systems will still be able to sell the electricity they produce and Duke will credit them at essentially a wholesale rate—or about 60 percent less than existing customers with solar are getting. But customers with new solar won’t be able to directly offset their bills at the higher retail rate anymore, Mosier confirmed.
Like in neighboring Georgia, the solar debate is driven in part by the failure of another kind of energy—nuclear power. The typical Georgia Power customer has been paying an extra $100 a year since 2011 for reactors that won’t start generated electricity until at least 2021, helping to drive a rapid growth in large-scale solar there.
In South Carolina, SCE&G’s parent company SCANA and Santee Cooper abandoned construction of two new reactors, leaving ratepayers stuck with what University of South Carolina political science professor Neil Woods described as a “$9 billion hole in the ground.” The utility is fighting in court over state lawmakers’ efforts to reduce the burden on SCE&G ratepayers from 18 percent of a typical bill to 3.2 percent.
Solar Becomes an Issue in the Governor’s Race
The nuclear costs have created a strong anti-utility sentiment, Woods said, making people pay attention to solar power as an alternative and drawing an embrace from politicians among Democrats and Republicans alike.
Republican incumbent Gov. Henry McMaster does not seem hostile to sun-powered electricity, Woods said. McMaster’s challenger, state Rep. James Smith, a Democrat, led the legislative effort to get the 2 percent cap lifted. The bill won majority support in both houses, but was defeated at the last minute by an amendment that required a two-thirds vote for it to pass.
“I expect the Smith campaign will try to make it an issue,” Woods said, though he added that voters in South Carolina are still likely to be more interested in larger economic issues, roads, school safety and social issues.
McMaster’s press office did not respond to requests for comment.
Smith said electric utilities threw their weight around to scuttle his bill and he’s not giving up.
“What it has meant for our state is thousands of jobs, billions in new investments and more competitive utility rates,” he told InsideClimate News. “This is about our future and ratepayers’ ability to access the power of the sun for themselves, their businesses and their families.”
Despite the uncertainties, solar advocates are optimistic they can work something out.
Republican and Democrat candidates have both said they want to lift the cap, said Thad Culley, a regional director of Vote Solar, a national solar advocacy group.
“To the extent it becomes a political issue, it will be jockeying over who is doing more or who is not doing enough,” he said.