Rules will change this summer for Duke Energy customers who install rooftop solar panels in North Carolina. Some industry experts worry new, lower payments and a more complicated system could slow solar's growth.
North Carolina's rooftop solar payment rules, known as "net metering," have been in place since 2000. Customers whose solar panels produce more electricity than they need get credits on their bills equal to whatever they pay for electricity. That can mean big savings.
But laws passed in 2017 and 2021 required state regulators to revise those rules. So last week, the North Carolina Utilities Commission complied by approving Duke Energy's plan to reduce what solar owners get paid and to add a new $10 monthly fee for residential customers who install solar panels.
"This is a contentious issue. There are a lot of states fighting over net metering. And we came to (an) agreement with a lot of stakeholders, offered it up to (the) commission, (which) basically approved what we submitted. So (we) feel very good about that," Duke Energy spokesman Randy Wheeless said.
Net metering has been an incentive for rooftop solar, which is considered an important strategy to reduce the nation's reliance on fossil fuels and fight climate change. But the electricity industry nationwide has been campaigning for years in favor of changes like North Carolina's. California adopted a similar change in December.
Solar advocates say Duke’s proposal would make rooftop panels less attractive by raising costs and increasing the time it would take to pay off solar investments. Jim Warren is with the environmental group NC WARN.
"It's tragic. At a time of growing climate crisis, for them to go along with Duke Energy to stifle the growth of more solar on homes is just, it's crazy. Local solar is the fastest, cheapest, most equitable way that North Carolina can decarbonize," Warren said.
Duke says its own internal studies show that the payments solar customers receive are too high and amount to an unfair subsidy for solar owners. But Warren disagreed. He says the 2017 state law required a more comprehensive independent study and that Duke's estimates fail to consider how rooftop solar panels avoid the need for Duke to build more power plants.
"The commission has to do a cost-benefit analysis that would show the relative value of net metering. Duke Energy, basically, its only claim is that net metering is unfair to non-solar customers. That's been disproven over and over," Warren said.
Warren thinks the issue ultimately will be decided at the state Court of Appeals.
The utilities commission order lets current solar customers keep their rates through Jan. 1, 2027. For new customers, monthly bill credits for electricity sent to the grid would be lower, and would vary according to time of day and electricity demand. One study by solar installers estimated payments could be 25% to 35% lower.
"I think it will make it more difficult to sell rooftop solar," said Ward Lenz, executive director of the North Carolina Sustainable Energy Association, whose members include solar installers.
"But I think there's other parts of the economy and … federal incentives and stuff that may or may not offset that," he said.
He said it may not be clear for several years whether the policy change has any effect on solar growth.
Lenz said the varying prices according to time of day will be harder for customers to estimate the costs and benefits of installing solar. So regulators ordered Duke to develop an online calculator.
NCSEA supported Duke's plans, as long as they were tied to a separate Duke proposal for new incentives to replace solar rebates that ended last year. But in a second order last week, regulators rejected that program, called Smart Saver. Instead, the commission ordered the company to develop a new program to test the costs and climate benefits of solar panels plus battery storage.
"We will again work with our stakeholders and the public staff and others to come to something that would be very positive for North Carolina," Wheeless said.
The solar net metering new rules take effect July 1.
