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Overwhelming demand and ongoing technology problems have prompted regulators to consider changing the program.
A retired government worker who once advanced renewable geothermal energy, Robert Reeber had two dozen solar panels installed at his Chapel Hill home in December.
“I figured I might be able to help the planet a bit more,” said Reeber, who’s in his 80s.
On the morning of Jan. 6, he logged on to Duke Energy’s website to fill out his online application for a rebate. No Luddite, Reeber said he cut his teeth on an IBM 1620 in 1962.
“It took me ten minutes to enter my stuff,” he said over email. He took a screenshot verifying the time. “My installer suggested it might be a good thing to do.”
But the proof was of no use. At the same instant Reeber was filling out his web form, so were some 3,750 other customers, all competing for just over 800 slots. Now in its fourth year, Duke’s first-come, first-served rebate program was depleted in 161 seconds.
Duke erred when it notified thousands of unlucky customers, including Reeber, that they’d received the rebate, only to retract the offer later. Some applicants also reported technical troubles when they tried to click through the last crucial pages of the application.
But unlike 2020, when a wholesale website crash caused hundreds of customers to be accidentally denied, this year there appeared to be a more existential glitch: the difficult truth that far more Tar Heels wanted rebates for their rooftop panels than Duke had to hand out.
The overwhelming demand, the company’s enduring technological problems, and an award system that advantages high-speed internet connections and computer savvy have prompted regulators to consider changing the program, which runs through the end of 2022.
But just how to do that is up for debate, and rooftop installers are urging the system remain as is at least until July 7, when the company will take a second round of applications.
No matter what, many solar advocates say it’s time to start designing a new, more systemic means of encouraging rooftop installations. While the rebate program has undoubtedly made a difference — tripling Duke’s solar customers from 6,000 to 18,000 — it’s limited by law and difficult to scale.
“You can’t argue numbers. More people have gotten solar than would have without rebates,” said Ben Smith, regulatory counsel with the North Carolina Sustainable Energy Association. “It’s more a matter of, ‘What’s the next generation? What’s a longer-term solution?’”
‘We should have known earlier’
While North Carolina boasts the second most solar capacity in the nation, the vast majority comes in the form of large solar farms: rows and rows of ground-mounted panels, mostly on leased, rural land.
A 2017 law has helped boost rooftop panels by requiring Duke, the state’s dominant monopoly utility, to give cash to customers who go solar.
Homeowners can get up to $6,000 for systems as large as 10 kilowatts, comprised of 30 to 40 panels. Businesses can get up to $50,000 for ten times as many panels. Nonprofits like churches can get up to $75,000.
The 60-cents-per-A/C-watt rebate for homeowners hasn’t provoked the “gold rush” that South Carolina’s enticement once did, said Aaron Davis, the head of Firefly Solar, a Greenville, South Carolina-based rooftop firm.
But the rebate still offers a valuable incentive — especially when combined with federal tax credits and rapidly tumbling prices. “It doesn’t have to be that generous,” said Davis, who does business in both Carolinas. “Any free money is good money.”
The problem, Davis and others say, is the program’s paltry capacity, capped by law at 15 megawatts per year. Two-thirds of it is allocated for residences, the rest for businesses and nonprofits.
Nonprofits can’t take advantage of federal tax credits, one reason they’ve yet to reach their annual caps. But other customers have maxed out with increasing speed, the rebates vanishing within two weeks during the first application period in 2018 and within days in 2019. Last year, the grants were all allocated in 20 minutes.
After 2020’s dramatic website malfunction, Duke in April proposed to regulators shifting to two award periods for 2021 to “lessen the urgency of applying [in January]” and “to spread the market over the course of the year.”
Customers who installed panels in the last quarter of 2020 or planned to install this year could apply in early January. Those who planned to go solar in the second quarter of 2021 or later in the year could apply in early July.
On Nov. 6, following numerous exchanges with solar companies and other stakeholders, regulators agreed to Duke’s proposal. But that left little time for solar installers to adjust their business plans.
“Receiving that information so late in the year made it very difficult to have a positive impact,” said Jake Feltenberger, a manager at Sugar Hollow Solar in the Asheville area. “We should have known earlier.”
‘A lot of disappointed customers’
So, on Jan. 6, there was more urgency than ever before, not less. About 750 more people applied for rebates than did last year, while Duke gave out about half as many awards. “The batting average doesn’t look very good,” company spokesperson Randy Wheeless acknowledged.
Many solar installers spend time coaching their clients through the application process and are used to high acceptance rates. “Our company has always done well with this rebate,” said Feltenberg at Sugar Hollow Solar. “Literally every client that wanted it in years past has been able to get it.”
Not so this year, with a record 2,500-odd customers put on the waiting list.
“We are dealing with a lot of disappointed customers who did everything they should have and had the application submitted within the first few minutes, but were still waitlisted,” Bethany Theede, finance and administration director with Yes Solar Solutions in Cary, said via email.
With hundreds of slots filled this year in a matter of seconds, some suspect solar installers used bots or other software to fill out the forms automatically.
“It is physically almost impossible to access the site, enter all required information and have the registration confirmed within such a short time,” said Chapel Hill’s Sven Jordt, put on the waiting list even though he completed his form in less than three minutes. “They should investigate whether certain installers flooded the process early on.”
Even if all the submissions were manual, rural customers with slow internet connections were almost certainly disadvantaged. “At this point, whoever can pay for the fastest fiber internet [and] has the most nimble typing fingers … are first in line to receive rebates,” Theede said. “Which seems discriminatory.”
Wake Forest customer Janice, who preferred not to give her last name, has wanted solar panels ever since studying them in college in the ’70s. A retired Navy veteran, she and her husband had their 7.6-kilowatt system installed at the end of last year.
“I believe in helping the climate, so I’m very happy to finally have solar,” she said via email, “even though it took us 44 years to save for it.”
They’re lucky they saved: Even though she submitted her form four minutes past nine, she’s now 653rd on the waiting list. Rebates for Duke Energy Progress, which serves Wake Forest, disappeared even more quickly than those in Duke Energy Carolinas territory — gone in just 126 seconds.
An uncertain 2021 for solar rebates
Customers like Jordt, who haven’t installed their panels yet, can delay putting them in until at least April 8 and apply for rebates again in July. But the terms of the summer awards are still up in the air, with regulators weighing a change to the per-kilowatt rebate amounts.
To reduce the rush of applications in the residential and commercial sectors and encourage more nonprofits to apply for the program, last year, Public Staff, the state-sanctioned utility customer advocate, proposed lowering the per-kilowatt rebate amounts for residential and business solar panels and raising them to a dollar for churches, local governments, and the like.
But the North Carolina Sustainable Energy Association objected, advocating instead to cut the size of residential systems eligible for rebates in half, thereby opening up the rebates to roughly twice as many customers. “We would have more folks get a rebate,” Smith said. “Those rebates would be smaller per person.”
In their November order, regulators accepted neither option, instead suggesting a tiered system in which customers who installed fewer panels got more cash per kilowatt from Duke.
“One way to better utilize the rebates to encourage solar installations may be to target smaller systems,” they wrote, “which are more likely to be installed by customers with greater budget constraints and, therefore, in greater need of an incentive.”
Clean energy advocates appreciate the intent but are skeptical of this approach, in part because it conflicts with other incentives for going solar. Most customers want to maximize the size of their systems to get as much credit as possible from Duke for excess energy they produce, reducing their energy bills and their panels’ payback time. Plus, the more expensive their arrays, the higher their federal tax credit.
In the end, the sliding scale may not change the size of most projects or allow more customers to participate. “It’s difficult to tier it in a way to allow equity to present itself in the way I think the commission intends,” Smith said.
Above all, Smith said, maintaining the current rebate amounts at least through the end of 2021 is vital. “Our members have business plans and considerations that they make when they start each year.”
A more scalable program in the future?
Whether or not the rebate program is tweaked before it dries up at the end of next year, advocates believe a scalable approach to encouraging rooftop solar is needed.
South Carolina may provide an example. Last year, Duke Energy, solar installers, and other stakeholders agreed to a new net metering arrangement the company called a “triple win for customer, company and climate.”
Customers with panels must pay a minimum $30 monthly bill, and those with uncommonly large systems of 15 kilowatts or more are subject to a grid access fee. But solar panel owners have an opportunity to earn more on excess energy they produce during the times of the day when demand is highest. If they install a utility-controlled smart thermostat along with their panels, they will see even more savings.
“We’re hoping that the future of net metering in North Carolina is something similar to that,” Smith said.
Solar companies and customers say the state and local governments can take other steps to encourage rooftop solar, such as streamlining permit requirements and preventing homeowners associations from limiting rooftop systems in communities.
For now, with the future of rebates, net metering, and other reforms uncertain, installers like Feltenberg with Sugar Hollow Solar advertise the factors they can count on: the rapidly declining costs and the climate benefits of panels.
“People should just realize that solar is still a great choice, rebate or not,” Feltenberg said. “You will save money over time, and you will be doing something that’s way better for the environment.”
Correction: This article has been updated to correct the spelling of Robert Reeber’s last name and to clarify the number of panels installed on his home.