Solar Incentive Coming To An End In South Carolina
Changes are coming to residential solar in SC.
Two of South Carolina’s major utilities are changing the way clients benefit from the solar energy they produce on their home in 2019. As of March 15th for Duke Energy customers, and when SCE&G clients hit their capacity cap, the terms of their offered rates for solar will no longer be as strong as they currently are. System costs will remain the same and solar will still make sense for the long term, but, if no new net metering program is approved, the fall-back rate structures could add 6-8 more years to the payback period for the investment. The current Net-metering that we all enjoy will be gone.
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So, What is Net-Metering?
“Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For example, if a residential customer has a PV system on the home’s rooftop, it may generate more electricity than the home uses during daylight hours. If the home is net-metered, the electricity meter will run backwards to provide a credit against what electricity is consumed at night or other periods where the home’s electricity use exceeds the system’s output. Customers are only billed for their “net” energy use. On average, only 20-40% of a solar energy system’s output ever goes into the grid. Exported solar electricity serves nearby customers’ loads.” Source: Solar Energy Industries Association.
The current South Carolina Net Metering program is a 1:1 credit. If a solar customer exports excess electricity back to the utility, the utility will compensate the customer at the same rate that the utilities charges them for electricity. For example, if a SCEG customer consumes 1 kwh of electricity, then SCEG will charge them $0.13. If this same SCEG customer sends back 1 kwh of electricity to the grid, then SCEG will credit the customer $0.13.
When your usage is low, like a Wednesday afternoon when everyone is at work, surplus solar production is sold to the utility for the same price you pay for it, reducing your bill, and saving you money. The utility can then instantly transfer this power to your neighbors to support their needs (selling it to them on the same power lines you are using!).
The image below represents net metering. It demonstrates when the sun is shining and the solar panels are producing more energy than being used in the home, the energy goes back to the grid. While at night, your home is pulling that excess energy back from the grid to light your home.
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What is changing about the Net Metering policy in South Carolina?
Once the cap is hit for SCE&G and the date is hit for Duke, the tariffs (rates) in place will negatively impact solar clients. The utility companies will cease giving a 1:1 ratio credit for the electricity produced and exported to the grid. For instance from the above example were SCEG was compensating you a $0.13 credit for each kwh you sent to grid, they may only credit you $0.05 for that same kwh. The utility will pay you less for a kW you produce than a kW they produce, even though they sell the one they get from you back to you or your neighbor for full retail.
SCE&G’s net metering program will end once their capacity cap is achieved. This cap can be hit at any time due to large commercial projects grabbing allocations of the program, but the expectation is currently March or shortly thereafter.
For net-metering applications approved prior to the capacity being reached, customers will be able to take advantage of the current net metering policy. This policy allows the customer to receive a 1:1 ratio for energy they sell back to the grid. They are grandfathered into the program until 2025.
The image below shows the capacity status of SCE&G’s net metering program as of 1/31/2019.
Duke Energy has already hit the cap they have set previously and then extended accepting applications out until March 15th.
Net-metering applications approved prior to March 15, 2019 will be able to take advantage of the current net metering arrangement. This arrangement ensures the customer will receive a credit at a 1:1 cost for each kW-hour exported to the grid. This also grandfathers them into the program until 2025.
Will my rates go up? How much?
Your rates will not change for power you use, but the price the utilities pay for the kWh of power you send back to the grid could be cut in half. If the utility charges you $0.13kwh for power, why should they not PAY you a $0.13kwh for power? Especially if they are able to sell the power they just bought from you BACK to you or your neighbor for full retail.
Can I install a solar system after this date?
Yes! You can still install a solar system after this date. System costs and performance are not impacted.
Why Go Solar Today?
- Net Metering Policy is changing – utilities will give you less than a 1:1 ratio for energy you create
- Federal Tax Credits are changing- tax credits will remain at 30% until the end of 2019, they drop to 26% in 2020, and to 22% in 2021.
- State Tax Credits are NOT changing – we have one of the best tax credits in the country.
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You can make a difference; contact your Legislator!
Solar net metering programs are due to expire in mid-March in the Upstate and in mid-2019 for most other areas of the state, eliminating the ability of customers to reduce their energy bills by going solar.
Legislation is pending at the Statehouse. It will:
- Remove the net metering cap and solar leasing caps and allow ratepayers freedom to choose their own energy source
- Ensure fair compensation for what solar users generate and use by calculating the net energy used over the course of a month
- Prevent non-solar customers from paying for revenue lost by a utility because of solar.
- Prohibit utilities from setting discriminatory rates specifically for solar customers.
It’s time to take action!
Free-market competition in the energy sector will lower bills, create jobs, and increase energy independence. In the first 100 days of 2019, South Carolina lawmakers have the opportunity to create a better energy future for all South Carolinians by taking clear and decisive action on clean energy competition.
Contact your legislators today and ask them to strengthen your energy choices, support the Energy Freedom Act, and lower your power bill.
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