Solar would vie with utilities

Apr 26 - The News & Observer, South Carolina

Green energy advocates are pushing for a change in state law to allow solar power producers to sell electricity directly to homeowners and businesses.

Such a change would upend North Carolina's longstanding energy policy, which doesn't let consumers choose their electricity provider. The proposal is opposed by the politically powerful electric utilities in the state that don't want to lose customers and sales revenue.

Customers today can buy electricity only from the power supplier in their region, which for most people in the state means Duke Energy, Progress Energy, rural electric cooperatives or municipal power agencies.

Solar power installations can sell electricity they generate, but only to those power suppliers, which in turn resell the electricity to homeowners and businesses.

But solar power companies say they could tap into a potentially bigger market if they were also allowed to sell electricity directly to customers, as is allowed in at least 19 other states.

"It's absolutely pure competition," said Ivan Urlaub, executive director of the N.C. Sustainable Energy Association, a trade group for solar and other green energy producers. "There's definitely companies that'll be interested, and the solar market will just grow over time."

Urlaub estimates that if the bill is adopted, it would lead to the development of 1,000 megawatts of solar over the next decade, equivalent in power output to a nuclear plant.

The legislation was developed by the N.C. Sustainable Energy Association and introduced in the state legislature last week by state Sen. Josh Stein, a Democrat from Wake County, and Sen. Tom Apodaca, a Republican representing Buncombe, Henderson and Polk counties.

"The green energy jobs in solar is one of the few growing industries in the entire state, and we should be looking to nurture and expand employment any way we can," Stein said. "And it would reduce the amount of electricity utilities have to produce from coal plants."

But Mike Hughes, a spokesman for Progress Energy, said the proposal is bad public policy.

"We oppose efforts to establish selective deregulation in North Carolina," he said. "The law would take away revenues without relieving the utility of its regulatory obligation to serve all customers."

Utility rates in this state cover the cost of power plants, transmission lines and distribution lines for all customers in a utility's service area.

Since solar power generates electricity only about 20 percent of the day, the local power company would still have to supply most of the power to a solar energy user.

"We have to have our facilities ready, on standby anytime, at a moment's notice," Hughes said.

Solar advocates say their proposal would help, not hurt, power companies. By offsetting electricity use during times of peak demand, solar energy will reduce the need to construct power plants, the advocates say.

The North Carolina bill would allow direct sales up to 2 megawatts from a renewable facility on the customer's property.

Customers would likely benefit because solar providers could undercut utility prices. In North Carolina, solar power is subsidized with state and federal tax credits that cut the cost of solar installations by more than half.

In states that allow direct electricity sales to customers, solar developers offer low-risk contracts. Typically, the contracts don't require customers to make down payments on solar panels, which can run into the millions of dollars for commercial installations. Instead, the customers pay monthly bills, structured like mortgage payments.

Another benefit: The contracts allow consumers to lock in on electricity prices for as long as 20 years, a deal no electric utility can match.

Richard Harkrader, president of Carolina Solar Energy in Durham, said he has seen many solar projects fall through in this state because solar companies are legally restricted from offering their best deals.

Harkrader, a board member of the N.C. Sustainable Energy Association, said that the ability to offer customers favorable contract terms would help develop a solar "market that's not so dependent on the utilities."

john.murawski@newsobserver.com or 919-829-8932

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