2023 Update on Net Metering in North Carolina

Last week, the NC Utilities Commission issued a long-awaited order determining the future of compensation for rooftop solar customers in North Carolina. Given the significant changes this decision poses to our rooftop solar installers, customers, and interested stakeholders, we wanted to take some time to provide additional background on the order and what it will mean moving forward.  

As a reminder, changes to net metering (NEM) policies in North Carolina were required as part of language included in both HB589 and HB951, which mandated that the state revisit NEM by 2027. These changes are part of a larger nationwide trend taking place over the past couple of years focused on rolling back net metering policies and eroding compensation structures that make rooftop solar more affordable and accessible. As an example, states like Nevada went so far as to completely eliminate net metering, which lead to a large contraction of the rooftop solar industry. The policy was so unpopular that the state had to reverse course. Similar battles have played out in other states across the country like Arizona and California as well. 

NCSEA, along with numerous other industry advocates, including the Southern Environmental Law Center, Vote Solar, the Southern Alliance for Clean Energy, the Solar Energy Industries Association, and Sunrun, had a vested interest in ensuring these same battles didn’t make their way to our state lines, risking the future of an industry that’s brought thousands of jobs and millions of dollars in investments to North Carolina. With these considerations, this coalition of industry advocates began proactive negotiations with the utility to identify new solar policies that would avoid the risk of a complete erosion of net metering (ie negative policies like buy-all, sell-all) and still provide adequate compensation to customers for the benefits they provide to the grid. 

That’s when in 2021, the aforementioned parties, along with Duke Energy, filed a settlement agreement at the NC Utilities Commission outlining a plan that would include a new time of use rate, along with a guaranteed upfront rebate for customers with electric appliances and who enrolled in the utility’s smart thermostat program. While this proposal may not provide the full compensation that customers previously experienced with 1:1 net metering, it was a good compromise to ensure that the financial structures were in place to encourage new customers to install solar, while continuing the upward trajectory of the industry.  

Now comes the order issued by the NC Utilities Commission (NCUC) last week.  

As you may have seen, the NCUC issued their long-awaited order, and unfortunately not with the results we were hoping for. As originally proposed, the agreement reached by all parties included multiple pieces (TOU rate AND upfront incentives), which collectively were instrumental to ensuring the new rate structure would not be a significant fall from where we were previously with net metering. Unfortunately, in this recent order, the Commission only approved the time-of-use rate structure, along with the bridge rate proposed by settling rooftop solar companies, and denied the upfront rebate proposal. They did, however, outline a new pilot program that would provide a rebate for residential storage.  

All in all, we were disappointed to see this partial approval of the original agreement, and believe that it leaves a lot more to be desired in terms of incentives and programs designed to further accelerate rooftop solar adoption for all North Carolinians, including low- and moderate-income customers. NCSEA, along with our partners, outlined this sentiment in a recent press release and via related news stories 

We’re going to continue fighting to ensure solar is as affordable and accessible to as many people across the state as possible, and will look to identify new opportunities to adequately compensate rooftop solar adopters for the benefits they provide to the grid.  

In the meantime, our team will continue to digest this order to fully understand the implications it will have on the market, including timeline for implementation, along with the details of the new storage pilot program. Keep an eye out as we’ll be sharing additional details in the coming weeks that explain all facets of the order. In the interim, please visit our net metering page on the website for additional background on the topic and more details of the settlement: https://energync.org/net-energy-metering/ 

View the full text of the order issued by the NC Utilities Commission on March 23, 2023. 

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