Duke Energy’s new net metering program in SC to reduce solar savings, boost battery industry
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Net metering, the policy that has made solar financially viable for thousands of homeowners, is under threat throughout the U.S. Utilities across the country have been trying to undercut the policy in order to prevent homeowners from generating their own power, all in the name of saving their profit margins.
The most recent set of net metering changes comes out of Duke Energy in South Carolina after unanimous approval by the South Carolina Public Service Commission. The new net metering program will cut how much money solar homeowners can save in the Palmetto State, but it’s not the worst net metering change we’ve seen.
So what can South Carolinian solar homeowners expect in the near future?
There are three key things to highlight about Duke Energy’s new net metering program in South Carolina:
The first thing to note is that Duke’s new program requires solar homeowners to have a minimum electric bill of $30. This means no matter how much electricity your solar panels produce, you will always have to pay at least $30 per month, AKA $360 per year.
Another part of the new program is instituting Time-of-Use rates. Under this rate structure, Duke can charge higher prices when electricity demand is high, and lower prices when demand is low. Usually, demand is highest in the mornings and evenings, so that is when electricity will be the most expensive.
Duke has divided its rates into four different categories:
If your solar panels produce more electricity than your home uses, your excess energy will be sent to the grid and you will receive a credit that can be used to offset energy you take from the grid.
However, off-peak credits can only cover future off-peak consumption, and on-peak credits can only cover on-peak consumption. Holidays and weekend energy usage is charged at the off-peak rate.
The higher the demand is for energy, the higher the price of electricity will be. The following table outlines Duke Energy’s Time-of-Use rates:
|Energy charge||Rate per kWh|
Under the new net metering program, your energy will be netted monthly. This means, at the end of each month, Duke will tally up how much solar electricity you sent to the grid and compare it to how much of Duke’s electricity that you took from the grid.
If you sent more electricity to the grid than you used in a month, you will have excess net metering credits in your account. Instead of the credits carrying over to offset your electricity usage next month, Duke will pay you for them at the avoided cost rate of electricity.
Duke Energy’s avoided cost rate is about $0.03 per kWh, which is nearly 70% less than what Duke charges for off-peak energy. So, under the new program, Duke would value 300 excess kWh credits at the end of the month at $9, whereas they used to be worth about $30 because they could be carried over from one month to another at the full retail value.
The money is then applied to your Duke Energy account and will be deducted from your next month’s energy costs.
Duke Energy’s new net metering program will lower how much solar homeowners can save on their electric bills. This is mostly because of how little Duke will pay you for your excess net energy at the end of the month.
Under Duke Energy’s previous net metering program, the company would buy back excess electricity at a rate of around $0.04 per kWh. The new rate is about half that, at $0.027 per kWh. This is also way lower than what Duke charges for electricity, which is currently about $0.10 per kWh.
The Time-of-Use credits also limit solar savings. Solar panels tend to produce the most electricity during the middle of the day, which happens to line up with off-peak hours. This means most of the extra solar energy you produce won’t be able to cover more expensive on-peak usage later in the day.
Duke Energy’s new net metering program officially started January 1, 2022.
Utilities across the country see solar energy as a threat. Right now, utilities have a monopoly on the energy generation market. Once you start producing your own electricity, utilities lose some of their power - and their profits. Because of this, utilities are fighting to prevent homeowners from going solar.
Many utilities, including Duke Energy, have tried to disguise their attacks against net metering as being concerned for their ratepayers by pushing the narrative of “cost-shifting”, in which utilities claim that solar homeowners don’t pay their fair share for the grid with net metering, so the utility has to increase rates for non-solar homeowners.
And while cost-shifting can happen, it’s a pretty bogus argument at this point in time. The truth is that cost-shifting only happens when there is a high percentage of solar installed in an area, and right now, South Carolina is nowhere near that threshold.
In fact, the only people who are negatively impacted by full retail net metering right now aren’t ratepayers - it’s utility shareholders. Utilities want to continue to pay their shareholders and CEOs big bonuses, and in order to do that they need to prevent their customers from going solar.
It’s likely that we’ll see a drop in the number of solar installations in South Carolina following these changes to net metering.
It’s fairly typical to see a dip in installs when there are major changes to an incentive; it happened recently in New Jersey when the state closed its SREC program for a lower-value incentive.
Although this new net metering program will cut savings and potentially lead to fewer installations, we may see an uptick in the number of solar batteries installed in the state.
Solar batteries are able to provide homeowners greater savings under Time-of-Use rates because you can store the solar energy created during off-peak hours in the battery, and use it later during on-peak hours to avoid higher charges.
Learn more: Net metering vs. solar battery storage - which makes the most financial sense?
Are we crazy about Duke’s new program? Not really. But it’s definitely not the worst net metering change we’ve seen. You’ll still see savings on your electricity bill, they’ll just be lower than they would have been had you went solar in previous years.
The best time to go solar with Duke Energy would be now, or any time you can get in before January 1, 2022. The Interim program provides slightly higher savings because you can stay on your existing rate plan and don’t have to worry about Time-of-Use rates. So not only will you get higher savings, you’ll start saving sooner, too.
So, if you’re thinking of going solar under Duke Energy, you should start shopping around for quotes now. There are plenty of highly-rated solar installers in South Carolina that can help you start making the switch so you can get the best savings possible.