Solar advocates appeal North Carolina net metering cuts

A coalition of solar advocates have filed with the North Carolina Court of Appeals, contending that state laws were violated when state utility regulators approved Duke Energy’s rate plan to make cuts to compensation for exporting rooftop solar generation.

The approval of electric utility Duke Energy’s plan is the latest in a nation-wide push by utilities to quash net energy metering (NEM), the billing process in which homeowners are compensated for delivering local, clean electricity to the grid.

The coalition argued that state regulators violated House Bill 589, passed in 2017, which mandates the North Carolina Utilities Commission (NCUC) to perform a cost-benefit analysis of solar net metering.

Under Duke’s plan, which was enacted on October 1, net metering credit rates are cut from a value ranging from $0.05 per kWh to $0.20 per kWh to a low rate of only $0.03 per kWh. This damages the value of rooftop solar for North Carolina residents, making it harder for them to invest in emissions-free electricity generation, despite state goals to boost clean energy access.

The rate case also enforces minimum bills on solar customers of $22 to $28 per month, even if 100% of their electricity demand is met by their own solar array’s production.

North Carolina Attorney General Josh Stein, and the bill’s author, former Republican House member John Szoka, publicly agreed that independent analysis conducted by NCUC is not only legally mandated, but also essential to a comprehensive assessment of the ratemaking change.

Despite this, Duke Energy opposed requests for a commission-led study, and instead regulators were left with exclusively using internal Duke Energy data and calculations to assess net metering. Environmental and public interest groups have argued the internal Duke calculations largely ignored any benefit of net metering or rooftop solar access.

This problem of utility data transparency and internal data plagued California during its Net Energy Metering (NEM) 3.0 rulemaking. NEM 3.0 led to an 80% cut to net metering rates, and California has since suffered a sharp 40% to 80% contraction of its residential solar industry. The full effect of this change has not been assessed yet as installers are still serving a huge backlog of new customers who rushed to meet the demand for the more lucrative legacy NEM 2.0 rates.

Bernadette del Chiaro, executive director of the California Solar and Storage Association (CALSSA) said many small-business solar installers in California are now weighing closing up shop permanently. Larger national players in U.S. residential solar like Enphase, Sunrun, SolarEdge, and others have seen their stocks pull back 60% or more since the onset of California’s devastating NEM 3.0. California’s crumbling residential solar market serves a warning to other states nationwide.

Advocates for rooftop solar have plainly demurred rate cases like California’s and Duke Energy North Carolina’s, suggesting that the changes are a clear example of utility profit-protection instead of changes meant to serve North Carolina ratepayers.

“Duke Energy leaders are clearly determined to destroy the competition posed by customer-owned, local solar. They’re harming solar companies and the ability for North Carolina to help slow the climate crisis,” said Jim Warren, director, NC Warn. “It’s pitiful that state regulators are going along with it by allowing Duke Energy to violate the law.”

The coalition appealing for the enforcement of a transparent cost-benefit study includes NC Warn, Environmental Working Group, Sunrise Durham, 350 Triangle, 350 Charlotte, the N.C. Climate Solutions Coalition, the N.C. Alliance to Protect Our People and the Places We Live.