A group of North Carolina solar installers is challenging Duke Energy's proposal to change the way rooftop solar owners are paid for electricity. They say it would hurt business and hamper the state's climate change efforts.
The 15 companies spelled out their objections in a letter Thursday to Gov. Roy Cooper, Attorney General Josh Stein and the North Carolina Utilities Commission. And three of those companies are seeking to file formal comments in the case currently before regulators.
Bob Kingery, co-founder of Southern Energy Management in Raleigh, said the rules change would be "a big step backward."
"It doesn't support continued growth for the rooftop solar industry. And it doesn't support our goals as a state to continue to reduce our carbon footprint and move renewables and efficiency forward," Kingery said. "And it also is so complicated that next to nobody could even figure out what solar would really do for their house."
Under current rules, solar panel owners who produce more electricity than they need get credits on their bills equal to whatever they pay for electricity — a practice known as "net metering." Duke Energy wants to reduce that credit, vary it by time of day and energy demand and charge solar owners an extra $10 monthly fee on top of the existing monthly fee it charges every customer.
Last year's North Carolina energy reform law requires the utilities commission to revise net metering rates. Duke Energy filed the plan in November as a settlement agreement with solar industry groups — the North Carolina Sustainable Energy Association Southern Environmental Law Center, which represented Vote Solar and the Southern Alliance for Clean Energy; solar panel maker Sunrun Inc.; and the Solar Energy Industries Association.
South Carolina approved similar rules for Duke Energy last year. Duke Energy argues that it needs the extra revenue to pay for grid improvements.
Duke Energy spokesman Randy Wheeless said Thursday the plan is fair and noted that it has the support of major environmental and solar industry groups.
"Duke Energy’s proposed changes to net metering in North Carolina do not hurt rooftop solar customers. We will compensate solar owners for their power back to the grid at rates that match the value of power to the company at that given time," Wheeless said.
"Duke Energy is committed to finding collaborative paths forward to help with the clean-energy transition and carbon-reduction goals in the Carolinas. Our settlement with many leading solar groups ensures fair and reasonable treatment for all customers whether they choose to install solar or not," he added.
A threat to the industry?
But Kingery and other installers have broken with their own industry association.
They say the changes would cost jobs and make solar unaffordable for many customers. Kingery said the installers' own analysis found that the new rates would reduce the value of solar production by 25% to 35%. That would increase the amount of time it takes to pay off a solar installation and eliminate the incentive to adopt solar, he said.
"Under current rules … a solar system will pay for itself over time. It adds value to your house. If you put a battery with it, your family can have backup power resiliency in your house," Kingery said.
"When you take away 25 % to 35% of the economic value to the consumer, it's easy to believe that, you know, a large chunk of consumers are just going to say no. Because the economic benefits are so poor now, that it just doesn't make any real economic sense," Kingery said.
The installers join a growing list of environmental and social justice organizations that have come out against Duke's plan. The Washington-based Environmental Working Group said earlier this month the changes would "put solar power financially out of reach for many working- and middle-class residents."
EWG President Ken Cook said cheaper renewable energy like rooftop solar are a threat to big power companies.
“That’s why monopoly utilities like Duke are fighting to crush rooftop solar in North Carolina, echoing fights in California and other states,” Cook said.
N.C. Attorney General Josh Stein also is involved in the net-metering case before regulators. A spokesman said Thursday , "Our office is continuing to take a close look at this issue to protect North Carolina’s ratepayers and environment while also advancing clean energy policies."
Nationwide debate
The debate in North Carolina comes as large utilities push for similar legislation or rules changes in other states, including California and Florida. One of the arguments utilities make is that they are overpaying for electricity they get from rooftop solar owners. The utilities further argue that this means non-solar customers are subsidizing those with solar.
Jim Warren of NC WARN, a frequent Duke Energy critic, disputes that. He said studies have shown that homes and businesses with rooftop solar reduce the need for electricity generated by fossil fuels and supply low-cost power to the grid.
Warren said the fight over rooftop solar is about more than prices: It's related to Duke's plans to continue investing in power plants fired by natural gas.
"It's so much at stake, in part because this goes to the heart of Duke Energy's business model, and the question of whether this state will move forward with climate protections or continue expanding gas at a rapid rate," Warren said.
If regulators approve, the new rates could take effect Jan. 1, 2023, for new net metering customers.
Read the installers' letter below:
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