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Utility-Scale Solar In North Carolina To Keep Flying, Homeowners Still Left Hanging

Originally published on SolarLove.org.

North Carolina governor Patrick McCrory signed a one-year extension of the state’s renewable energy investment tax credit last week, a move that will encourage more solar development within the state, which is now 4th in the nation for installed solar capacity. The law will now expire on January 1, 2017, unless it is extended again.

solarcity screenshot from homepage gallery © solarcity“Renewable energy is an important part of an all-of-the-above energy policy that produces clean power, creates jobs, and generates revenue in communities that need it most,” McCrory said in a statement at the bill signing ceremony. A study for the North Carolina Sustainable Energy Association shows that every dollar paid out by the tax credit program has resulted in $1.93 of benefit for the state and local governments.

North Carolina Is A Leader In Solar Energy

North Carolina is actually a leader in solar energy. 13 times more solar was installed in 2014 than in 2010 according to the Solar Energy Industries Association, a report in ThinkProgress notes. But most of that boom has come in the utility-scale market, which moved from 26 megawatts of capacity in 2010 to 390 megawatts in 2014. By comparison, the residential market has languished, only going from 0.3 to 4.3 megawatts during that time period.

That is primarily because North Carolina is one of only 4 states that still provides 100% monopoly status to its utility companies by prohibiting third-party sales. That means a homeowner can buy a solar panel system and pay for it upfront but is prohibited from entering into a lease or purchase agreement with a third party like SolarCity.

Third-party power purchase agreements are what are powering a boom in solar power around the country. Large companies like SolarCity have the leverage with lenders to borrow money at favorable rates. Many banks think individual requests to borrow money for a home solar system are like personal loans. They often want 12% interest for folks with good credit and things go up from there. (Note that some banks and organizations are now offering more attractive solar loans, such as Admiral’s Bank, Mosaic, and Dividend Solar.)

Not surprisingly, Governor McCrory worked for the state’s largest utility company, Duke Energy, for 30 years before entering politics. Unlike Pacific Gas & Electric in California, which has established itself as one of the most progressive utilities in the country, Duke Energy has earned a reputation as a hard-nosed opponent of residential solar power in North Carolina and every other state where it does business.

The Home Energy Storage Revolution

It is utility dinosaurs like Duke Energy that will be impacted most by the upcoming age of storage batteries for residential use. That era was kicked off in style last week by Tesla during a gala event at company headquarters. Tesla CEO Elon Musk told investors during a conference call with investors yesterday that the company already has 38,000 orders for its PowerWall residential battery after just a few days. Tesla will begin shipping batteries in October.

North Carolina does allow for net metering, which allows customers to sell excess power back to the utility company. With home battery storage, a homeowner can store electricity during the day and use it during peak times themselves. Thus, the utilities suffer a loss of revenue and homeowners save money. Duke Energy isn’t going to like that one little bit.

The Energy Freedom Act

North Carolina state representative John Szoka introduced legislation in April that would permit third-party purchase and lease agreements. Szoka, a conservative Republican, was elected in 2012 as an opponent of solar energy but he has since changed his mind. He now says the numbers and facts have him backing cleaner power.

His bill, termed the Energy Freedom Act, has 22 co-sponsors and the support of the North Carolina Sustainable Energy Association, which seeks to work with all stakeholders in a collaborative way to promote changes in policy. According to NCSEA representative Nicole Cieslak, the group’s position is as follows:

This level of adoption and clean energy investment can only be achieved through open dialogue between all stakeholders – utilities, consumers, businesses and clean energy advocates – and as the state’s leading voice on clean energy, The NC Sustainable Energy Association is dedicated to fostering bipartisan support and educating the industry and consumers on the benefits of a clean energy future that is secure, resilient and affordable.

The question is, if the bill passes, will Duke Energy’s hand-picked governor sign it? The utility company has been making conciliatory noises about the legislation. Some industry observers think the market for electricity from traditional utility companies may be cut in half over the next decade. Perhaps Duke Energy would prefer to have some of the market rather than none.

Photo Credit: SolarCity

 
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Written By

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. 3000 years ago, Socrates said, "The secret to change is to focus all of your energy not on fighting the old but on building the new." Perhaps it's time we listened?

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