By Matt Evans
Duke Energy Corp. (NYSE:DUKE) still wants to pay less to the owners of rooftop solar power systems from whom it buys electricity to feed back into its grid. But the utility provider won’t say until later this year how much less and when.
That uncertainty over what are called net metering rates is a concern to solar energy installers in North Carolina, who have reported anecdotally and to the N.C. Utilities Commission that Duke’s yet-unspecified plans have put a crimp in their business.
“Net metering” refers to the ability of the owners of solar power generators to sell any extra electricity they make but don’t need to the utility company, which can count that power as part of its renewable energy portfolio. Residential solar generators currently get paid about 11 cents per kilowatt hour by Duke for their excess power, the same amount that Duke then charges other residential customers who buy electricity from it. The utility would rather pay about 6 cents, closer to the rate it pays to get electricity from big solar farms.
“Our feelings haven’t changed” since January, when Duke’s North Carolina president, Paul Newton, suggested a payment reduction is in order, according to Duke spokesman Randy Wheeless. Newton said the current payment structure, designed early in the residential solar industry’s growth, is unfair because it results in a subsidy by other customers to solar users who also make use of the electricity grid. About 1,700 out of Duke’s 3 million North Carolina customers take part in net metering.
“A lot of states are looking at ways to make sure we don’t have cost-shifting between solar and non-solar customers,” Wheeless said. “But we haven’t gotten as far as making a filing with the (utilities) commission,” a step that may come later this year, he said.
Duke recently won a ruling from the commission against a motion that had been filed by the N.C. Sustainable Energy Association seeking to force it to commit to the current net metering rates for the next decade. In filing that motion, NCSEA said Duke has thrown a wrench into the rooftop solar business by talking publicly about its desire to cut payments but not actually making a formal request that could be challenged and settled.
“The uncertainty is having a destructive ‘chilling’ impact on the rooftop solar market in North Carolina and is (a) unfairly interfering with the ability of rooftop solar installers in the state to do business and (b) unfairly constraining the ability of the utility’s residential and commercial customers to avail themselves of the only retail alternative to Duke Energy Corp.: self-generation,” the NCSEA said it its motion.
The Utilities Commission wasn’t convinced, though. In a decision denying that motion filed May 28, the agency said with no request pending from Duke to change net metering policies, there was no action for regulators to take now.
“NCSEA’s request attempts to circumvent the established process by which the Commission amends policy based on a threat to markets caused by (Duke Energy’s) public statements. The Commission is not inclined to rely on public statements and their alleged market effects to amend its policy,” the order stated.
That means rooftop solar installers will remain in limbo on the issue. Betsy McCorkle, director of government affairs for NCSEA, said her group does not plan to file any additional regulatory motions on the issue but will instead keep up a public education campaign that could have an impact on any future requests by Duke to change its rates.
One hopeful note in the commission’s order, she said, was its suggestion that in such a case, the fact that a lot of people bought their solar panels expecting payback under the current rate structure would “undoubtedly” be part of the consideration of a rate change.
“Many things about this are important to us, but one is giving certainty to current customers that have made upfront investments that their rates won’t change mid-stream,” she said.