NCSEA and our partners have advocated for the growth and prosperity of solar energy in North Carolina dating back to our founding in 1978. Our organization strives to build an affordable and accessible clean energy future where solar is available to as many people as possible. Our history makes this evident.
After nearly a year of negotiations, reviews, and analyses, NCSEA along with the Solar Energy Industries Association (SEIA), Sunrun, and the Southern Environmental Law Center (SELC) on behalf of Vote Solar and the Southern Alliance for Clean Energy, entered into a settlement agreement with Duke Energy regarding net energy metering (NEM) for residential customers in their service areas.
We've seen time and time again over the past few years, net metering caught in the crosshairs by utilities intent on rolling back the policy. NEM, since it helps homeowners reduce their energy bills, is almost constantly under attack from utilities that don't want to lose that revenue. As an example, in 2015, Nevada completely dismantled net metering leading to a 32 percent decline in solar jobs with many solar companies leaving the state. We've also seen similar fights break out in other places like Arizona, New Mexico, and more recently California and Florida. These examples demonstrate worst case scenarios for an industry that plays a critical role in decarbonizing our energy economy.
We believe the agreement is in the best interest of the residents of the state, creating a decade long set of rules to ensure the continuity of the industry and prevent some of the worst-case scenarios outlined above.
Further, legislation passed by the NC General Assembly in 2017 requires the NC Utilities Commission to revisit net metering by 2027. This legislation mandates the Commission investigate the costs and benefits of net metered solar. Because of this, North Carolina has no choice but to re-evaluate how solar customers are compensated for the energy they produce and provide to the grid.
NCSEA and our partners could have sat back and waited for a proposal from the utility with our backs against the wall for the 2027 deadline. At that point, though, the process no longer becomes collaborative and could lead to exactly what has played out in other states: a long-litigated fight leading to serious disruptions for solar businesses and customers. It's not simple or easy. However, we believe the risks to the rooftop solar industry are much higher without this agreement.
This approach to net metering takes into consideration the long-term health of the solar energy installer companies and residents of the state. Note that a nearly identical agreement was put in place in South Carolina a year ahead of our state.
What does the agreement do? Below is a short summary.
- Rebates: With the current rooftop solar rebate program sunsetting, this settlement agreement institutes an upfront $0.36/watt rebate for customers with electric and water heating, along with clothes drying. This is a significant improvement over the current rebate program with limited allotment available to customers via a lottery system. The Solar Choice Net Metering agreement institutes an uncapped rebate for all customers who subscribe to Duke's Smart Thermostat program and have electric heat. Customers also receive a $100 upfront bill credit the first year, followed by $25 each year while enrolled in these programs.
- Time of Use Rates: NCSEA has long advocated for time of use (TOU) rates to help homeowners manage their consumption with appropriate price signals. TOU rates are also a mechanism to manage demand and reduce the need for construction of fossil energy power plants. This new rate structure will compensate customers based on the time of day they export electricity from their PV system and use electricity from the grid. There will be three main periods as the basis of the new net metering structure (non-peak, off-peak, and a discount period). This structure helps incentivize the use of other clean energy technology deployments like electric vehicles and energy storage systems, while reducing strain on the grid. This presents additional revenue opportunities for solar companies by creating a new market for storage and EV charging.
NCSEA and our partners are working hard to create a calculator for all to use to help everyone understand and share with customers the costs and benefits of the new system. We are working with our members and partners to ensure it is accurate and easy to use.
This approach to net metering takes into consideration the long-term sustainability of rooftop solar over the next 40+ years. While this change is understandably difficult, installers and customers will be better off in the long run with the certainty and structure the agreement provides.
To get the facts about the Solar Choice Net Metering agreement check out NCSEA’s Fact Sheet and FAQs resource. Finally, be sure to listen to Episode 61: Finding NEM(2.)O on the Squeaky Clean Energy podcast for a deep dive with Host, Matt Abele and Daniel Brookshire, the Regulatory and Policy Manager at NCSEA.