Another state has moved towards slashing payments to new rooftop solar customers, as North Carolina regulators voted to approve a cut to net metering. Net metering involves crediting customers on their utility bill for sending excess solar generated electricity to the grid and is an important part of a homeowner’s return on investment in solar.
Utility Duke Energy said customers that would have enjoyed $80 to $98 of monthly bill savings will now save only $40 to $68 a month under the new regime. Net metering credit rates will fall from today’s value of $0.05 per kWh to $0.20 per kWh to a lower rate of only $0.03 per kWh.
The rulemaking also calls for a minimum bill for new solar customers ranging from $22 to $28 per month. This places a cap on how much a customer can reduce their utility bill, even if 100% of their electricity demand is met by their solar array’s production.
New solar customers will also have to choose either a time-of-use (TOU) based plan or a critical peak pricing plan, moving away from a fixed price model for non-solar customers. This change was made to address the real-time value of energy on the grid based on the intermittency of solar generation. Instead of a fixed rate of around $0.11 per kWh, customers would be charged $0.056 and $0.077 per kWh during peak solar generation hours, and as much as $0.17 to $0.19 per kWh in times of low solar irradiance and high electricity demand like during early mornings and evenings.
Existing net metering customers are grandfathered into their older, more preferable net metering rates only until 2027, potentially posing a problem for rooftop solar owners that expected a certain return on their investment.
The net metering cuts were part of a compromise, made in May 2022, after long negotiations from installer Sunrun, the Solar Energy Industries Association, and the North Carolina Sustainable Energy Association. The compromise included a delay in implementing TOU-based rates for net metering customers and provided a “bridge rate” for new net metering customers.
Accepted as part of negotiations with utility Duke Energy, the bridge rate and delayed TOU were expected to soften the blow of cutting net metering rates and assessing a minimum fixed monthly charge.
The net metering structure was accepted by the negotiators with an understanding that there would be a new energy efficiency and solar incentive in the state, which was also rejected by regulators in the March 23, 2023 rulemaking session. The incentive would have provided customers who pair solar with electric heating an average of $2,500 in value for a 7 kW rooftop array, while paying customers an initial $75 bill credit and a $25 credit each year.
The two rulings were received as strongly negative outcomes for the rooftop solar industry.
“This ruling is just rotten,” said Jim Warren, executive director of NC Warn. Warren said Duke Energy got “everything they asked for, and more” in the negotiations.
NC Warn, which has been a leader in the opposition to this rulemaking change, has committed to continuing to fight the decision. It cites a 2017 law that mandates an independent cost-benefit analysis before any changes are made to net metering policy.
North Carolina currently has nearly 8 GW of solar installed or enough to power nearly one million homes. The state is currently getting more than 8% of its electricity needs from the sun. Read more about North Carolina solar incentives here.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
When relationships with the local utility sour, whether controlled by the utility or mediated by government, it’s time for solar owners to look for a way of becoming more independent and denying the local utility their generation. This can be pursued on their own or as part of a larger community solar organization of some kind.
Controlling your own generation gives you choice and economy. Also don’t forget switch as much of your household and transport to electricity from your own generation as you can.
A lot of this can be mediated by business people setting up battery-storage-as-a-service franchises.
Hello Mr. Kennedy, thank you for this information…Why would neighbors now all gradually leaving “large array” infrastructure, going off-grid, not decide to just all go at once? Submit a plan to IRA funding experts, design distribution line patterns from evenly scattered centers for 6? homes. Store excess collected energy in batteries, sell that stored excess 100′ away? not to mega Link structure crossing into the Mojave Desert, but to – the next neighbor planning to be part of a new hexagonal center? Homes surrounding them, not yet in a hexagon, until those homes have their own hexagon.
Why does the “energy company” keep having to be a DOI-protected and financed monopolistic corporation? Will the trillions of IRA dollars be going only towards large corporations? None directly towards individual homeowners? Why can’t there be IRA-supported – reliably – affordable energy self-developed for individual homes? Just because the money will disappear into the local economy, instead of passing through corporations – before it reaches the US Treasury? The Microgrid infrastructure, and business model, instead of Big Solar – “The only way it can work! right!” — For utility scale corporations?
Utilities want your solar electricity at only 20% of what it costs you to produce it. since rooftop solar costs so much to install and there is so much mark up by solar installers and city electrical permits cost so much for such small systems, now, only by going off grid can you keep all the value the systems are meant to give you, but it will cost twice as much to install with batteries and batteries need to be change out at additional cost every 6 to 12 years. One more state where rooftop solar is dead.
This is a very disturbing trend. The new California NEM3 is even worse for solar owners and the industry than this one.
Utilities seem to be getting their wish by devaluing rooftop solar exports in recent evolutions of net metering. But Gorman, et. al. (2000) pointed out that raising fixed-costs in residential bills can drive grid defection by lower-demand consumers, just as larger minimum bills motivate high-demand consumers. They highlight as key the willingness of defectors to accept imperfect energy reliability. The arrival of household picogrid capability also provides for gas/propane generator backup, so that even climates demanding air conditioning are now fertile ground for defection. And meter collars permit low-cost generators to fill peak-demand supply gaps.
Proposing rate responses like exit fees and reconnection charges will surely expedite defection, and then lock out defectors.
To quote a fictional King of Siam:
“Is a puzzlement!”