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Duke Energy customers who rent their homes or have tree-shaded rooftops may get a chance to go solar under a new program filed with North Carolina regulators.
The utility’s “Shared Solar” proposal is far from perfect, critics say, but with the right changes it could expand the number of solar owners in the state by more than tenfold — allowing Tar Heels to tap into the renewable resource who couldn’t before.
“The public really supports solar, they really want access to it,” said North Carolina Sierra Club director Molly Diggins, whose own home in Raleigh happens to be ill-suited for rooftop solar panels. “I’m eager to sign up.”
North Carolina boasts the second most solar energy in the country, but the bulk of it comes from commercial solar farms: rows upon rows of ground-mounted panels, often on leased farmland.
A sweeping energy law adopted last summer gave Duke more control over these large solar developments while requiring the utility — a monopoly across much of the state — to create incentives for individual customers to invest in solar panels, too.
Duke’s recently proposed solar rebates are one piece of that mandate, giving homeowners who purchase rooftop panels $4,800 back, for example, on an outlay that could run close to $18,000.
But the rebates leave behind renters, homeowners with shaded roofs, and anyone who lacks extra cash. A National Renewable Energy Laboratory study estimated half of all American households aren’t suited for rooftop solar.
The law calls for community solar — or shared solar — to help fill the void. The idea is simple: an electric-supplier invests in a large solar array, then sells subscriptions to cover the costs. Participants get money back for whatever electricity their shares produce.
North Carolina is already home to a handful of these projects. Fayetteville, which runs the state’s largest city-owned electric utility, is in the final design phase of a 1-megawatt shared solar farm that also includes a 500-kilowatt battery.
Nonprofit electric cooperatives have installed more than a dozen community solar farms in their mostly rural territories. Blue Ridge Energy, in the state’s northwest corner, is responsible for four of them, each 100 kilowatts in size.
“This gives them the opportunity to get in with no money down,” Blue Ridge’s Alan Merck said of subscribers who pay $4.50 a month for a single panel. “There’s no buy out or payback. This is just really, really easy. The fact that we’re fully subscribed at four sites — that proves the concept really well.”
Duke’s mandate is to take Blue Ridge’s concept and multiply it 100-fold, eventually becoming the largest shared solar program in the state.
Duke expects 11,000 of its 3.2 million North Carolina customers will own solar panels after the rebate program runs its course. If the utility sold each shared solar panel prescribed under the law to just one person, that figure could soar above 170,000.
But to fulfill its potential, advocates say Duke’s program should follow the example of Blue Ridge and other co-ops, with low-cost, monthly subscriptions and no long-term commitments. Instead, the company has suggested charging up to $500, spread over two payments, for a 20-year subscription to a single 220-watt panel.
“The upfront payment model is going to be a barrier for a lot of people,” said Isaac Panzarella, a technical services director at the North Carolina Clean Energy Technology Center.
Duke estimates each panel will provide a $420 return to buyers over twenty years — another detail that could curb the program’s popularity.
While the law limits how much Duke can credit shared solar customers for the electricity their panels produce, the utility could increase payback in other ways, such as building solar arrays for less money or adding batteries, as Fayetteville is doing.
“The game-changer is that Fayetteville has included a battery in the system, and that’s creating a lot of value,” said Panzarella, who helped develop the project’s concept for the city’s Public Works Commission. “There’s potential to have a net positive credit right away.”
Duke could also lower its estimated $131 per panel marketing costs by partnering with organizations like the Sierra Club, the solar industry, or cities and towns committed to reducing climate pollution.
“Those are the communities that would probably be most interested in working together to make a community solar project a great one,” said Cassie Gavin, a lobbyist for the North Carolina Sierra Club.
No matter what, experts say the legal imperative to restrict both costs and payback to subscribers will make Duke’s shared solar program a “premium product,” designed for customers willing to pay more for green energy, not those who need to save money.
“The best-case scenario here is that it does well,” said Caroline Golin, who specializes in Southeast policy for the advocacy group Vote Solar, “and you have enough customer engagement where the citizens of North Carolina push for greater options for community solar, and that opens the doors for low-income communities.”
To gain experience administering shared solar, Duke proposes to start relatively small, with 2 megawatts of solar on farms up to 75 miles from potential subscribers — maximizing both cheap land and the ability to recruit customers in urban areas.
Beyond those details, the company says it’s open to changing particulars of its program, which is subject to public input and must be approved by the state’s Utilities Commission.
“I don’t think Duke Energy is claiming this is the magic bullet for shared solar in North Carolina,” said company spokesman Randy Wheeless. “We feel like our shared solar program is a good step out of the gate, and we’ll keep fine-tuning it, and I think we’ll have a successful program eventually.”