Why community solar projects struggle in North Carolina

ANSON COUNTY, N.C. — Even in the midst of winter, Pee Dee Electric Cooperative’s solar array still hums with power, providing hundreds of kilowatts of renewable electricity a day to Anson, Richmond, and Union counties.

Built about 10 years ago, the installation is one of the first community solar projects in the state. It’s a sort of middle-ground between residential solar and utility-scale projects, the vision behind community solar is to provide an opportunity for those who would like to power their homes with solar energy, but either can’t install panels on their property or can’t afford the upfront cost. Customers can instead subscribe to a local solar array, help cover its construction and maintenance and get a credit on their electricity bill each month for the power the array produces.

“We wanted to bring solar into our area for Pee Dee Electric to learn more about solar for our members to learn more about solar,” Donnie Spivery, the cooperative’s CEO, said about their project.

Pee Dee handles the insurance, cleans the panels, and even uses the array as an educational tool for local schools. Spivey said about a third of the panels have subscribers and most have been a part of the program since the beginning.

Unlike residential solar customers, however, those subscribers often miss out on one of the biggest benefits of solar, lower energy costs. For most community solar projects in North Carolina, there’s no guarantee the credit from arrays will offset the cost of subscription most of the time or even some of the time.

According to filings from Duke Energy, that’s one of the main reasons why nearly five years after the North Carolina Utilities Commission approved Duke Energy’s community solar program, the utility hasn’t been able to build a single project.

Though the utility put out a request for proposals to develop a project, Duke didn’t get any bids with developers telling the company they were worried without guaranteed savings, they didn’t believe the projects would attract enough subscribers.

Pee Dee Electric subscribers are in for the environmental impact, but for a Duke program to work, they would need far more participants. As survey data shows, two out of three homeowners who choose solar do it for the cost savings.

According to Ethan Blumenthal, the regulatory counsel for the North Carolina Sustainable Energy Association, premium prices don’t have to be a foregone conclusion for community solar.

“Some states can make this work simply because there are regulatory structures incentivizing and prioritizing this type of solar development,” he said.

In New York and Minnesota, which lead the country in community solar projects, customers can typically expect to save 5-10 percent on their yearly bills.

Even one of Duke Energy’s own projects, which recently launched in Florida, promises lower energy costs over time, especially for low-income subscribers.

The biggest difference between the Florida program and anything Duke proposed in North Carolina is the scale. Current law limits community solar projects to five megawatts. Florida’s first community solar project was 15 times that size, making the per-panel cost of building the project lower and opening it up to more subscribers.

Duke is looking to launch a similar program in North Carolina, but a Duke spokesperson tells Channel 9 the utility is waiting for a ruling on whether a large-scale community solar project can count towards the solar requirements in its Carbon Plan or if customer-opt-in initiatives like community solar need to provide additional renewable resources.

Blumenthal said NCSEA would support projects like larger-scale community solar, but he also believes, after the Inflation Reduction Act and the massive price drop we’ve seen for solar panels, it’s time to take another look at North Carolina’s community solar regulations as they are.

“There were assumptions made about administrative costs,” he said. “There were assumptions made about the costs of developing those facilities. There are far more federal incentives than there used to be.”

North Carolina has long been a leader in solar energy, primarily due to utility-scale projects, now Blumenthal said he’d like to see state regulators create more room and incentives for community and residential solar installations to start to catch up.

“Community solar in North Carolina has had a lot of promise at times but at this point, that promise has been unfulfilled,” he said.

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