NCUC Rules on Duke Energy Solar Rebates Program: Takeaways for the Clean Energy Community

Solar energy is a driving force behind North Carolina’s growing clean energy economy, which has advanced tremendously in the past decade. In large part, the growth that spurred North Carolina to second in the nation for installed solar is thus far attributed to the rapid deployment of utility-scale solar installations. Customer-sited solar, meanwhile, has also continued to grow in appeal and adoption rates among NC energy customers. However, because North Carolina operates in a highly-regulated monopoly electricity market where investor-owned utilities determine the lion’s share of what powers NC’s homes and businesses, financing incentives like rebates are needed to encourage consumer adoption of clean energy options like “rooftop” solar energy.

With this need in mind, NCSEA, our members, and Duke Energy began discussing the design of a solar rebate program in 2016. Last summer, these discussions reached fruition when comprehensive energy legislation, House Bill 589, became law, requiring Duke Energy to implement a new solar rebate program. Following HB 589’s passage, NCSEA and our partners worked in Fall 2017 and early 2018 with Duke Energy to co-design a program that would attract potential clean energy adopters waiting for the right time to install solar on their homes and businesses, a segment of the market that has been largely unsupported by consumer-friendly policies since the sunset of NC’s Renewable Energy Investment Tax Credit at the end of 2015.

On January 22, Duke filed its proposed solar rebate program plan with the NC Utilities Commission and earlier this week, the Commission ruled on Duke’s proposal. Overall, NCSEA is very pleased and optimistic with the program approved by the Commission. If properly implemented by Duke, we believe the rebate program will do much to open the rooftop solar market to residential, nonprofit, and business consumers. Below are key takeaways about the rebate program and the Commission’s ruling:

The Basics: Rates Per Customer Type & Projected Impacts on NC Installed Solar Cost, Deployment

• The rebate will be available as of January 1, 2018 for the first 10 kW of residential installations and the first 100 kW of non-residential installations.
• The rebate program represents a combined 20 MW of installed capacity per year for the next five years for Duke Energy Carolinas (DEC) and Duke Energy Progress (DEP). Each year, 10 MW will be reserved for residential consumers and 5MW will be reserved for non-profit organizations, which can include schools, places of worship, and so on.
   

Important Deadlines for Consumers

• Because the Commission modified Duke’s rebate program plan, Duke must make a compliance filing with logistics and details on or before April 13, 2018.
• Consumers who installed solar between January 1 and April 3, 2018: The Commission ordered that for these customers, the installation date for rebate purposes would be treated as the date of the Commission’s order, or April 3, 2018. All customers who installed solar during this time period have 90 days to apply for a rebate, giving a deadline of July 2, 2018 for rebate applications.
• Consumers who install solar on or after April 4, 2018: Rebate applications must be submitted within 90 days of the date of installation.

Rebate Rules from the Commission Order

• Oversight: The Commission will review the rebate program annually (Order, page 9).
• Q4 projects rollover: Projects installed in the last quarter of a calendar year must use Duke’s reservation process if they want to be eligible for a rebate in the first quarter of the following calendar year (Order, page 10).
• Reporting: Duke Energy must post monthly updates on participation on their website and must include the website address in their April 13, 2018 compliance filing. Duke must also file a notice with the Commission when an annual limit for a participant class is reached (Order, page 11).
• Third-party assignability: Rebates will not be assignable at this time, but the Commission reserves the right to reevaluate assignability in its annual review of the rebate program (Order, page 11).
• Discretion: NCSEA believed that Duke’s proposed program afforded the utility too much discretion. In its Order, the Commission directed Duke to: (1) remove discretion from the program when objective criteria are available; (2) clarify ambiguous terms; and (3) add information about the Public Staff’s dispute resolution process to rebate materials. Duke is also directed in future annual review proceedings to: (1) report on rejected rebate applications; and (2) report on early terminations (Order, pages 11-13).
• Calculating generation capacity: NCSEA believed that the use of an installation’s AC nameplate capacity for rebate purposes could lead to abuse of the program. The Commission ordered that the AC nameplate capacity of an installation be used to calculate generating capacity, but that NCSEA must propose a fixed conversion factor for DC to AC conversions to Duke, who is then to provide any proposed revisions to the calculation of generating capacity in its first annual report (Order, page 13).
• Allocation of installed capacity available and differing rebate amounts: The Commission held that statutory set-asides for residential and nonprofit installations are not maximum amounts, and the remaining amount for commercial installations is not a set-aside. The Commission also directed Duke to include in its first annual report an explanation for the differing rebate payment amounts for residential, nonresidential, and nonprofit installations (Order, pages 13-14).
• Contract term: The Commission approved Duke’s proposal that customers be required to participate for a period of 10 years, but reserves the right to reexamine this requirement in future annual review proceedings (Order, page 14).

Duke Energy has 10 days to provide the Commission with rebate program plan materials that comply with the Commission’s April 3, 2018 Order. As always, NCSEA will keep our members and partners up to date with the latest information on this and other House Bill 589 programs which impact clean energy consumers. Our business members are also invited to join our bi-weekly update calls on Friday mornings. (Not a member? Click here to join NCSEA and gain access to these and other exclusive updates on clean energy policy and market happenings.) In the meantime, stay up-to-date by following our Twitter and Facebook pages.