Utilities, the solar industry, and environmentalists in South Carolina reached a comprehensive agreement yesterday that maps out a balanced approach to net metering in the state through the end of the decade.
As part of the deal, which was supported by Duke Energy and South Carolina Electric & Gas, utilities agreed not to seek any solar-specific fees until the end of 2020.
South Carolina now becomes the 44th state to adopt net metering. Previously, it only had a voluntary program.
“[The agreement] paves the way for South Carolina to become a solar market," said Bryan Miller, president of The Alliance for Solar Choice. "To be clear, it’s not a solar market today; there’s been too much regulatory uncertainty. So this goes a long way to creating a path for people to go solar and take their own energy destiny into their hands.”
Net metering customers in South Carolina will receive an incentive for their distributed energy resources valued at a 1:1 rate. The parties agreed to revisit net metering in 2020. Any new net metering tariffs approved in 2020 would apply to new customers who elect to net meter after Jan. 1, 2021, and existing customers after Dec. 31, 2025.
“We will continue in the current state for a period of time -- customers will have price certainty, the market will have price certainty. Then, in the 2020 timeframe, we will reevaluate the value of net metering and get the appropriate adjustment to it at that time," said Duke spokesperson Ryan Mosier.
Many utilities view net energy metering as a subsidy to solar customers. They argue that under net metering, solar customers aren't paying their fair share for the transmission and distribution services they receive. There have been attempts to review these policies in California, Minnesota, Arizona and elsewhere.
Despite these efforts, net metering hasn't been rolled back in a single state thus far, according to Miller. Instead, net metering policies have been expanded seven times this year alone.
Because the solar market in South Carolina is so small, net metering is not as much of a concern as it is in other places, at least not right now, said Mosier. As part of the settlement, stakeholders developed a methodology to calculate the value of solar generation, based on all potential benefits and costs to the utility system. The methodology should help to avoid future net metering battles.
“This agreement allows existing and future net metering customers to have rate treatment certainty for up to ten years," Clark Gillespy, Duke Energy president for South Carolina, said in a statement. "It also enables utilities to recover the cost of providing service to all customers, while maintaining 24-hour service to solar and non-solar customers,” he said.
In the next 60 days, South Carolina utilities will file distributed energy resource (DER) programs that outline specific incentives to encourage solar growth among residential and small commercial customers. Both the net metering methodology and the DER plans are required under landmark legislation, the Distributed Energy Resource Program Act of 2014, signed into law by Gov. Nikki Haley (R) in June.