It’s been a busy summer for Duke Energy, with South Carolina at the forefront. Included in the season’s events or, in this case, the pre-season came the decision in the state’s House of Representatives to kill the proposed increase of net metering caps from 2% to 4% of peak capacity on the grid.
How long does it take for a utility to reach that 2% mark? About 189 days. On Monday Duke Energy announced that it had hit the cap, and released a statement:
As an important partner in our collective efforts to grow renewable energy for the benefit of our South Carolina customers, we want to provide you advance notice about a key milestone we have reached under Act 236. As of July 9, 2018, in Duke Energy Carolinas territory, the total generation capacity of customers applying for net metering has reached the 2% limit established by Act 236.
This is a catastrophic hit to the distributed solar market in South Carolina, with the the anticipation that South Carolina Electric and Gas (SCE&G) will hit its cap in the coming weeks. South Carolina already has the highest average electric bills in the country. Without net metering credits and with the substantial overhead cost of installing solar, PV systems could become economically unviable.
It’s not just electricity customers that will feel the pressure. Just a few weeks ago, Thad Culley, regional director for Vote Solar, told pv magazine that the reaching the net metering caps could put as many as 3,000 local jobs in jeopardy. The affect will first come to workers in sales, with Sunrun estimating that as of August 1 will no longer be able to sell systems that qualify for net metering. From there, installers, especially small solar businesses, will be impacted.
Sunrun Director of Public Policy Tyson Grinstead responded to the cap fulfillment, stating:
It is disappointing to see Duke disregard lessons learned in states like Nevada, where utility self interest caused avoidable job loss. We are hopeful that compromise can be reached between stakeholders that allows solar to thrive again in the Upstate.
Duke has explained that they will still honor electricity sold by customers back to the utility “at the same price the utility pays for electricity generated by large solar power plants.”
Grinstead notes that this represents much less value to customers. Where net metering is a billing agreement with compensation aimed at being easy for the producer to utilize, this secondary system is buy-all sell-all between Duke and its customers. Customers would be selling their power to Duke at the wholesale price, while purchasing power at the much higher retail rate.
The conflict over the net metering caps points to an increasingly divided political landscape over renewable energy within South Carolina’s Republican Party. While Sunrun has described the caps as a mistake in favor of utilities, a number of pro-solar candidates are on the ballot at the state and national level in this November’s elections. The state has fluctuated drastically in national ranks for installed solar, according to data by Solar Energy Industries Association (SEIA). South Carolina fell from the 8th largest market in 2017 to 18th during the first quarter of 2018.