The number of South Carolina homes and businesses using solar energy is relatively small right now. But that number is growing.
Falling solar panel prices and attractive federal tax incentives have many homeowners and businesses looking at supplementing some of their purchased electricity with solar electricity. It’s happening all over the nation.
Duke Energy is no stranger to solar energy. We own more than 100 megawatts of utility-scale solar farms across the United States. The company is the eighth largest purchaser of solar electricity for our customers in the nation, according to the Solar Electric Power Association.
In the six states where we have retail customers, about 3,000 of our 7.2 million customers own solar installations at their homes. More than 100 are in South Carolina. That number is small, and is significantly less than the 190,000 customers that one California utility has.
But it brings up an issue that some states are wrestling with, and needs to be addressed in South Carolina: How do we properly structure solar energy rules and regulations to make sure they do not result in costs being shifted from solar customers to non-solar customers?
As we know, the sun doesn’t shine all the time. Over the course of a year, solar panels operate an average of 20 percent of the time. The other 80 percent of the time, those customers are still using Duke Energy’s electric grid, just like everyone else.
So how does Duke Energy charge for a customer’s use of the electric grid? The current rules allow solar customers to forgo the real cost of maintaining the electric grid – putting an extra burden on non-solar customers.
You might wonder if Duke Energy is only looking out for its best interests? It’s a fair question. But given the way current regulations work, the costs of the electric grid would be spread to other customers – basically non-solar customers would pay more to compensate for what the solar customers are not paying.
Does that sound fair? No, it doesn’t. In the past, the cost of the electric grid was embedded in what you pay for each per kilowatt-hour of electricity. Solar energy turns that upside down.
Solar customers should be paid for what they contribute to the electric grid. But they also should contribute to the utility's transmission and distribution system, which they depend on just as much as non-solar customers.
Solar energy is an important part of the state’s energy future. We, and others in South Carolina, recognize the rules need to be updated to enable solar to have a sustainable, long-term future.
How much is solar really worth?
The second issue that needs addressing is the cost utilities should pay solar customers. Under the current system, we pay solar customers the same for a kilowatt-hour of electricity as what we charge. Basically, customers pay us about 10 cents per kilowatthour for our product which is available 24/7; we pay solar customers the same 10 cents for excess energy whenever it’s available and whether we need it or not.
Again, these rules were created when solar energy technology was in the early stages of customer use. The rules need to be updated. It might sound hard to believe, but Duke Energy pays homeowners more for their solar energy than we pay for electricity from large power facilities.
Obviously, there needs to be a better method for pricing solar power to reflect the intermittent nature of it, and the fact that solar customers can only count on solar energy about 20 percent of the time.
Duke Energy looking to expand solar
Another reason to update the rules now is so companies – including Duke Energy – can participate in bringing solar energy to customers with an established set of rules that are fair to all participants.
By updating the rules and regulations around solar, we will be better able to participate in South Carolina in this growing area. Over the years, Duke Energy has produced electricity using hydroelectricity, coal, nuclear and natural gas. We see solar as the next step in that evolution. The technology and the economic impact solar can bring to South Carolina makes sense to us.
We look forward to working with leaders in South Carolina to make solar policies fair for all customers and to encourage the use of cost-effective solar energy in this state. Together, we have an opportunity to build a foundation to ensure that solar is an important part of the energy future of South Carolina.