Everything North Carolina residents can expect from Duke Energy’s new solar net metering policy
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In March 2023, the North Carolina Utilities Commission (NCUC) approved a proposal that will revise Duke Energy’s current net metering policy. The proposal was initially made in 2021, brought on by laws requiring utilities to reevaluate their net metering policies, and features modifications to how solar customers are billed.
The new rates will go into effect on July 1, 2023, and have stirred up plenty of mixed opinions among state leaders, solar industry professionals, and customers alike. It can all seem a bit confusing, but no need to worry. We’ll tell you everything you need to know about going solar with Duke Energy’s new net metering policy and how you can get the best savings.
The state of North Carolina has offered full retail net metering since 2000, meaning that any excess energy that a solar customer generates is credited to their bill at the utility's full retail rate of electricity. At the end of a billing period, any net excess generation (NEG) credits a solar customer holds must be surrendered to the utility company without compensation.
Under the current policy, solar homeowners can use Duke Energy’s Residential Service rate plan which charges about $0.11 per kilowatt-hour (kWh) of electricity used from the grid. This also means any excess solar energy sent to the grid is worth $0.11 per kWh.
With full retail net metering, Duke Energy’s customers in North Carolina can eliminate almost their entire electricity bill and recoup their investment in solar in about 10 years.
Starting July 1, 2023, Duke Energy Carolinas and Duke Energy Progress customers will no longer have access to full-retail net metering. Instead, they will have a choice between the temporary Bridge Rate plan and the Residential Solar Choice plan.
The Bridge Rate plan is only available until 2027 and serves as a transition between the current net metering plan and the Residential Solar Choice plan. After 2027, Residential Solar Choice will be the only option for homeowners going solar.
There are a few key differences between net metering, the Bridge Rate, and the Residential Solar Choice plan, like mandatory time of use rates, additional fees, and minimum monthly bills.
As part of the Residential Solar Choice plan, customers will leave behind the residential rate schedule and adopt a time of use (TOU) rate schedule instead. With TOU rates, how much you pay for electricity changes depending on the time of day. These are usually split into on-peak hours when electricity is the most expensive, and off-peak hours when it’s the cheapest.
On-peak and off-peak hours are different from May to September because the demand on the grid is different in the warmer months than the cooler ones. These months are considered ‘summer’; all other months of the year are ‘non-summer.
Duke Energy Carolina customers will pay about $0.10 per kWh during off-peak hours, and $0.21 during on-peak hours. For Duke Energy Progress customers, the rates are $0.13 per kWh for off-peak hours and $0.22 for on-peak hours.
The table below highlights Duke Energy’s time of use rates using summer hours for a better idea of what these rate plans look like:
|Hours (May-September||Estimated rate (per kWh)|
|Duke Energy Progress off-peak||
12 AM - 6 PM
9 PM - 12 AM
|Duke Energy Progress on-peak||6 PM - 9 PM||$0.22|
|Duke Energy Carolinas off-peak||
12 AM - 6 PM
9 PM - 12 AM
|Duke Energy Carolinas on-peak||6 PM - 9 PM||$0.21|
Under TOU rates, solar panels produce most of their electricity during off-peak hours, which can only offset future off-peak usage, leading to lower savings for the customer.
It’s also important to note that under the bridge rate, you are NOT required to be on a TOU schedule when using the Bridge Rate – there is the option to stay on a residential rate schedule.
Sometimes, solar panels will produce more energy than your home uses over the course of a month. When this happens, the excess energy is sent to the grid and is classified as “net excess generation”, or NEG.
If you have any NEG generation credits left at the end of the month, they will be credited at a special “NEG rate” of about $0.03 per kWh. So, if you have 10 excess off-peak credits at the end of the month, they will be worth $0.03 each, giving you a $0.30 credit on your bill.
Customers using TOU rates will likely have more NEG credits at the end of the month, because excess energy produced during off-peak periods can’t offset on-peak usage, leading to more unused credits.
The NEG credit can be used to offset your fees but are unable to wipe your bill completely due to the monthly minimum requirement.
Bills vary each month depending on how much electricity you consume. Under the new policy, it is required to pay a minimum monthly amount. For Duke Energy Carolinas, the monthly minimum bill is $22 per month and for Duke Energy Progress it's $28 per month.
So, even if you used little to no electricity during a billing period, you are still expected to pay at least $22 or $28 per month.
Credits for any NEGs are not included in the calculation of the monthly minimum bill. Credits can be used to offset additional fees, not the minimum charge. Customers on both the Bridge Rate and Solar Choice plans will have a monthly minimum bill.
This mandatory charge to your monthly bill is put in place to go towards cost recovery for Duke’s demand-side energy programs such as the Residential $mart Saver Energy Efficiency program and Residential Energy assessments.
The total non-bypassable fee is based on your system size, with a rate of $0.36 per kW for Duke Energy Carolinas and $0.44 for Duke Energy Progress.
Both Bridge Rate and Residential Solar Choice customers are subject to non-bypassable charges.
A grid access fee is charged to any customer that owns a system that is 15 kilowatts (kW) or larger. The grid access fee for Duke Energy Carolinas is $2.05 per kW, and for Duke Energy Progress, it’s $1.50 per kW.
For example, a Duke Energy Carolinas customer with a 16 kW system will have an extra $32.80 tacked on to their bill each month.
Fortunately, most residential solar systems are smaller than 15 kW, so many homeowners won’t have to worry about the additional charge. Customers on the Bridge Rate schedule are not subject to the grid access fee.
With changes in policy come changes in your bill. When you throw in two different rate options to choose from, things can get even more confusing. You’re probably wondering – How much will I actually be paying? And which rate gives you the best savings?
The truth is, how much your Duke Energy bill will be with solar panels depends on a number of factors, but in general, most homeowners will get better savings by using the Bridge Rate than the Residential Solar Choice plan. We can use an example to better understand what your Duke Energy bills could actually look like with solar.
Let’s say you are a customer of Duke Energy Carolinas that just recently installed an 18 kW solar system to cover your $310 monthly electric bill — here’s what you can expect.
Your electric bill will likely be higher under the Solar Choice plan because of mandatory time of use rates and additional fees. This is based on a $300 electric bill and an 18 kW system.
Under the Bridge Rate, you can use Duke Energy’s residential rate schedule which charges a flat rate of about $0.11 per kWh. Because the Bridge Rate doesn’t require time of use rates, solar can save you much more money on your electricity bill.
So, the 18 kW system installed for this example could produce around 2,487 kWh during a sunny summer month. That covers almost all of the roughly 2,800 kWh your home used for the month! This means you’ll only be charged for about 330 kWh of electricity, bringing your bill to about $37 before fees are applied.
You will have to pay $0.28 per kW in non-bypassable charges, which brings the final bill up to about $43. Compare that with a $300+ monthly bill you were paying before going solar, and you’re seeing some huge savings!
Under the Solar Choice rate, things get a bit more complicated. On the summer TOU schedule, during the on-peak hours (6 PM to 9 PM), you are paying a rate of about $0.21 per kWh. For all other hours of the day, your rate goes down to $0.11 per kWh.
Using the TOU structure and the rates provided, an average summer bill with your 18 kW system would be about $131, before fees.
The Solar Choice rate not only charges the non-bypassable fee but also a grid access fee for systems larger than 15 kW. For our example, the non-bypassable charge adds about $6.50 to your bill, while the grid access fee adds almost $37.
After these fees and bill credit for NEGs are applied, you’re looking at a monthly bill of about $174.50 under the Solar Choice rate. This number feels a little intimidating, but it’s still much lower than the $310 bill you had before switching to solar. It’s nearly cut in half!
Keep in mind that most homes don’t need a system larger than 15 kW, so there’s a good chance you won’t need to pay the grid access fee.
The biggest downside to this policy change is that it drastically cuts solar savings, especially if you go with the Solar Choice rate. Also, mandatory TOU rates lower what your solar energy is worth, and make it almost impossible to offset your entire electricity bill. Even if you could cover all of your energy usage with solar, you’d still have a minimum monthly bill and additional fees to pay.
But, it’s not all bad news. Homeowners will have access to the Bridge Rate, which can provide substantial solar savings thanks to flat rate options and fewer fees. The policy changes have also led to murmurs of new solar incentives being created to encourage the adoption of solar panels. If the Commission approves an incentive of at least $0.60 per watt, the Bridge Rate may close sooner than 2027.
Not to mention, the mandatory time of use rates and potential incentives could make installing a solar battery a better investment in North Carolina! Energy storage systems allow homeowners to store their off-peak solar energy generation, and use it during on-peak hours, leading to slightly higher bill savings.
You may also be asking yourself – why are these changes happening? Why would anyone want to make solar savings lower? The answer lies in two pieces of legislation that push for changes in North Carolina to prevent net metering from shifting costs onto non-solar customers.
In 2017, HB589 passed and required each electric utility to file for Commission approval of revised net metering rates. The bill also established that net metering rates should be designed to ensure that the customer is paying the full fixed cost of services, and allows utilities to implement fixed monthly energy and demand charges to do this.
Then, in 2021, HB951 enacted a decade's worth of energy policy. The bill tasked the NCUC with executing most provisions of the bill and various rule-making responsibilities – one of these rules being to revise the net metering rates. Other directives of this bill were aimed at carbon reduction, clean energy transition, and regulatory reform.
This led to the NCUC approving Duke’s proposal in order to meet the legislation requirements.
There are a lot of big changes coming for Duke Energy’s customers very soon. Until then, you can still go solar under the existing net metering plan, which will give you the best possible solar savings. If you wait too long, you’ll have to choose between the Bridge Rate and the Solar Choice plan – both of which save you less money than the current plan.
Get started on your solar journey now before your great savings opportunities expire! The SolarReviews calculator is one of the best ways to find installers in your area.
Also, remember to keep an eye out for new incentives that could be popping up in the near future!