Duke Energy’s new net metering program in SC to reduce solar savings, boost battery industry

Updated

solar installers placing solar panels on racking, mountains in the background
Duke Energy’s new net metering program will cut homeowners’ savings, but may boost the solar battery industry. Image source: WRAL

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?

Find out if going solar is worth it based on your location

What’s different about Duke Energy’s new net metering program? 

There are three key things to highlight about Duke Energy’s new net metering program in South Carolina: 

  • Minimum monthly bill
  • Time-of-Use billing rates
  • Monthly netting

Minimum monthly bill 

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. 

Time-of-Use billing rates 

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: 

  • On-peak, when demand is highest
  • Off-peak, when demand is low
  • Super off-peak, when demand is at its lowest
  • Critical peak, when demand is extremely high, only implemented in emergency situations where grid reliability is threatened

south carolina duke energy non-winter months electricity rates

south carolina duke energy winter months electricity rates

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. 

How much will Duke Energy be charging for electricity? 

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
On-peak $0.15176
Off-peak $0.087586
Super off-peak $0.060268
Critical peak $0.25

Monthly netting 

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 new avoided cost rate is equal to $0.0270 per kWh, which is nearly 75% less than the $0.10823 per kWh they currently charge for electricity. So, under the new program, Duke would value 300 excess kWh credits at the end of the month at $8.10, whereas they used to be worth about $32.47 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. Learn more about the differences between full retail and avoided cost net metering here.

What does Duke’s new net metering program mean for homeowners with solar? 

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. 

Going solar sooner rather than later will get you the best solar savings with Duke Energy. Before the net metering changes take place, Duke will be offering an Interim Residential Solar Choice Plan (more about that below).

If you can apply to the Interim program, you won’t have to worry about Time-of-Use rates until at least 2029, so you can get a few years of higher savings in, before you have to switch.

When do Duke Energy’s net metering changes take place? 

Duke will not implement its new net metering program until January 1, 2022. Until then, homeowners can apply to their Interim Residential Solar Choice Plan. 

Under the Interim program, you can keep your existing rate structure instead of switching to Time-of-Use rates. The solar energy you produce would be used to offset the full retail cost of electricity that you use later in the day. If at the end of the month you have excess energy credits that you haven’t used, Duke will credit them at the avoided cost rate of $0.027 per kWh. 

When you apply under the Interim program you can stay on your existing rate structure until June 2029, after which you can either stay on your same rate structure with additional fees or switch to Time-of-Use rates.

Why did Duke change its net metering policy? 

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. 

How will this impact South Carolina’s solar industry? 

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’s happening right now in New Jersey since they’ve closed their 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?

Is it still a good idea to go solar in South Carolina with Duke Energy?

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. 

Find out which solar incentives and rebates you qualify for

Key takeaways

  • Duke Energy has changed its net metering program for its customers in South Carolina.
  • The three major changes to Duke Energy’s net metering policy are switching to Time-of-Use rates, monthly energy netting, and implementing a monthly minimum bill requirement.
  • Duke’s new net metering program will begin on January 1, 2022.
  • The new net metering program will cut solar savings, but the introduction of Time-of-Use rates could make solar batteries more popular in South Carolina.
 - Author of Solar Reviews

Catherine Lane

SolarReviews Blog Author

Catherine is a researcher and content specialist at SolarReviews. She has strong interests in issues related to climate and sustainability which led her to pursue a degree in environmental science at Ramapo College of New Jersey.

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