The North Carolina Utilities Commission approved Duke Energy’s plan to revise net metering compensation for rooftop solar and added a new $10 monthly fee for residential customers who install solar panels.

 

The Commission approved a three-year transition for solar customers to move from receiving monthly credits to a time-of-use rate structure that is intended to incentivize the use of solar when it is most valuable.

 

The order also directed Duke Energy to open a solar plus storage program within 90 days, approves a $0.36/watt incentive to go solar, and approves another monetary incentive to encourage residential energy storage installations.

 

Will Giese, Southeast Regional director for the Solar Energy Industries Association?, said in a statement, “This order is a step forward for North Carolina’s rooftop solar market that preserves the ability of residents to choose the power that works for them.” He said that while the state has supported a strong utility-scale solar market, its rooftop solar industry has lagged.

 

He also applauded the commission’s approval of a monetary incentive to install solar and storage. He said the incentive is a “smart, innovative approach” that sets the bar for other states in the region to “consider the benefits of these technologies” for strengthening energy security in the face of extreme weather.

 

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The state’s net metering rules had been in place since 2000. Laws passed in 2017 and 2021 required state regulators to revise those rules. 

 

Solar advocates say the new rule, which takes effect in July, would raise costs and lengthen the time it would take to pay off solar investments. 

 

Public radio station WFAE quoted Jim Warren with environmental group NC WARN as saying, “for them (regulators) to go along with Duke Energy to stifle the growth of more solar on homes is just, it’s crazy.”

 

The regulatory order noted that NEM reform proceedings that have moved forward in other states “can be exceedingly contentious.” In particular, California’s effort to develop what is widely known as NEM 3.0 led to an extended on-again, off-again process before regulators approved a revised plan in November 2022.

 

North Carolina’s 2021 energy reform law directed state utility regulators to adopt a plan to cut carbon emissions from power plants to fight climate change.  Duke argued that the payments solar customers receive were too high and amounted to an unfair subsidy. 

 

The regulatory order lets current solar customers keep their rates through Jan. 1, 2027. For new customers, monthly bill credits would be lower, and would vary according to time of day and electricity demand. One study by solar installers estimated that payments could be 25% to 35% lower.

 

Noting that varying prices according to time of day will make it harder for customers to estimate the costs and benefits of installing solar, regulators ordered Duke to develop an online calculator.

 

Regulators noted concerns that energy storage was not specifically addressed in the proposed new NEM tariffs. They acknowledged that energy storage paired with behind-the-meter generation could potentially increase the value of the distributed energy resources to both the customer and the electric supplier.

 

It decided, however, that before Duke’s NEM tariffs were further modified to address the operation of storage coupled with customer-sited generation, “additional field learning and experimentation would be beneficial.”