NC solar panel installers, Duke Energy reach a deal. Here’s how your bill would work.

Duke Energy and three North Carolina solar installation companies have reached an agreement that would see the utility phase in changes to the way it bills and pays for energy from customers who have solar panels on their roofs.

Last year, Duke asked the N.C. Utilities Commission to approve a plan overhauling the way customers with solar panels on their roof pay for energy they use and are credited for energy they produce. Under that plan, customers with solar panels would have needed to pay a minimum monthly bill, while also paying based on “time of use pricing,” an idea the plan would have introduced to have the customer receive a lower credit for power generated during the day and pay more for power used during high-use periods like winter mornings or summer evenings.

The plan would have become effective on Jan. 1, 2023. Several parties pushed back, including North Carolina solar installers Southern Energy Management, Sundance Power and Yes Solar Solutions.

The installers and Duke reached a new agreement last week under which customers who install solar panels on their roofs before Dec. 31, 2026, would be able to apply for a “bridge rate” that would see them pay a monthly minimum bill and an additional charge but not a grid access fee. They would also not pay time of use rates, meaning they would receive the same credit for excess energy put back onto the grid during a summer afternoon that they pay for energy they use when solar panels are not generating at night.

The new agreement is effectively in addition to Duke’s original proposal and the companies’ proposed Smart $aver Solar proposal under which customers would install a smart thermostat that Duke could adjust up or down based on grid demands. Customers who install the thermostat would receive an annual rebate.

Solar installers say that if the Utilities Commission approves the new agreement, it would cost solar customers 5 to 10% of their system’s value over its estimated lifetime, compared to 25 to 35% under Duke’s initial proposal.

Dave Hollister, the president and CEO of Sundance Power Systems, said the agreement would protect customers who just installed solar systems based on pricing estimates that could change if the Utilities Commission approves Duke’s overall plan.

“If the Utilities Commission agrees with Duke’s overall plan,” Hollister said, “it gives us a better glide path to get there, which is basically 2027.”

Predictable savings from solar power

Stew Miller, the president of Cary-based Yes Solar Solutions, called the agreement much better than the initial proposal. Solar installers had been worried about customers losing value from solar systems, and that Duke’s pricing structure would make it hard for them to even estimate savings for a customer interested in installing solar panels.

Under the negotiated agreement, Miller said, “We get to stay on the same flat rate that we are on now, which makes it much easier for us to put together a proposal that’s based on facts and easier to come up with an accurate projection of not only solar production but also what your savings will be.”

The agreement also exempts customers whose homes were built for low-income customers by programs like Habitat for Humanity from the monthly minimum bill, along with customers who receive assistance from the state’s Crisis Intervention Program or the Low-Income Home Energy Assistance Program.

The number of new customers who could sign up for the bridge rate would be capped at about 9,000 in 2023, according to Duke, with the cap rising about 10% each year. Duke has about 30,000 rooftop solar customers.

Net metering

Net metering is the term for how customers who produce power with solar panels are credited for that energy.

In 2017’s House Bill 589, the N.C. General Assembly directed Duke and other utilities to study their net metering and establish “nondiscriminatory” rates after evaluating the “costs and benefits” of rooftop solar. States like California and Arizona that have sought to overhaul net metering have seen long, expensive fights that have often hurt the industry.

Central to the entire conversation is how much solar customers should pay to use the electrical grid, even if they are not drawing power from that grid. A National Academies of Science, Engineering and Medicine committee is studying the future of net metering.

“Duke Energy knows that customer-sited solar is an important part of the future growth of solar in North Carolina. We believe this phased-in compromise will help the industry navigate market changes and adapt to the long-term rate design of Solar Choice,” Lon Huber, Duke Energy’s senior vice president of pricing and customer solutions, wrote in a statement.

A Duke spokesman said the utility is committed to continue meeting with the solar installers “at least weekly” to try to figure out how rooftop solar could fit into future energy efficiency proposals put forth by the utility. As part of last week’s agreement, the utility and solar providers agreed to work together to advance an energy efficiency proposal that “properly values” rooftop solar.

This story was produced with financial support from 1Earth Fund, in partnership with Journalism Funding Partners, as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.