In less than a year, South Carolina has gone from being a state that was widely seen as resistant, if not downright hostile, to solar energy, to establishing itself as trailblazer in brokering an agreement between utilities, industry, and clean energy advocates that will ramp up solar development in the state over the next five years. With last year’s passage of Act 236, which established a state-wide distributed energy resource (DER) program, and the subsequent stakeholder engagement process to negotiate the program’s net metering rate – which led to a landmark settlement agreement in December – South Carolina’s process is now being looked to as a model of collaboration for the development of state-wide solar programs.
On March 20th, the South Carolina Public Service Commission (PSC) approved the net metering settlement agreement and paved the way for solar energy to take off in the state. What is unique about South Carolina’s experience is how stakeholders that typically find themselves on opposite sides of the table came together and showed real leadership in brokering a deal that all parties could get behind. In the end, the electric power companies, regulators, and conservation organizations were able to craft first a law and then an agreement for how to compensate customers for the solar energy produced by their rooftop solar systems and recover any associated costs that had universal buy-in.
Much of the credit goes to solar advocates who have been working to advance energy policy in the state for decades. Organizations like the South Carolina Coastal Conservation League (CCL) and Conservation Voters of South Carolina, along with regional partners SACE and the Southern Environmental Law Center (SELC) and others, took a lead role in shepherding the negotiations, which first began in 2013. As Hamilton Davis, CCL’s Climate and Energy Director, observed, “You have to have groups with the stamina and capacity to stay engaged.” In February, solar advocates launched a website to keep the public up-to-date on solar program development and new incentives the utilities will offer to help homeowners and businesses install rooftop solar systems: www.scsolarnow.com. The home page proudly proclaims, “Solar Energy Has Arrived in South Carolina!”
The historic lack of solar development in South Carolina led Columbia newspaper The State to observe in late 2012 that “South Carolina’s interest in solar energy is so faint that national studies rank the state at, or near, the bottom in the use and promotion of sun power.” This was despite South Carolina’s location in the sunny Southeast, its state ranking of 20th in maximum solar resource, and the existence of a generous tax credit for solar systems along with programs allowing for those systems to be net metered. While solar was taking off across the rest of the country due to falling prices and federal incentives, the continued lack of solar development in South Carolina caused it to fall increasingly behind other states. In 2012, South Carolina was ranked 30th in installed solar capacity; by 2014, it had dropped to 32nd.
But throughout that time period, negotiations were going on behind the scenes that would change all of this. Back in 2010, an Energy Advisory Council was established to advise the state legislature on energy issues, specifically the State Regulation of Public Utilities Review Committee. The Council includes energy regulators, electric power companies – both the investor-owned utilities (IOUs) and the energy cooperatives – and representatives from the conservation community. As Mr. Davis notes, this has had the effect of allowing people from the different sectors to sit around the table and get to know each other through years of working together, and is it a key reason for the eventual success in passing the Distributed Energy Resource Program Act of 2014.
Legislation to allow third-party sales of solar systems was actually introduced in the South Carolina legislature in 2013. While there was a great deal of support at that time for allowing these free market mechanisms to come into the state, the utilities requested the bill be delayed to give them a chance to work with solar advocates to modify the proposed language. The Energy Advisory Council was the logical place to hash it out. Throughout the summer of 2013, the Council conducted a study to address “the paradigm shift” that utilities are facing with the increasing penetration of distributed energy resources such as rooftop solar systems in their territories, then in late 2013 the Council sat down again to re-negotiate the legislation, presenting amended language for the bill early last year.
Act 236 sailed through the South Carolina legislature, without a single vote against it in either the House or the Senate, and was signed into law by Governor Nikki Haley in June. The Act requires the investor-owned utilities (IOUs) to achieve penetration levels of renewable resources representing two percent of their peak power demand by 2021. Under the DER program proposals filed in February by the three IOUs subject to the law – Duke Energy Carolinas, Duke Energy Progress, and South Carolina Electric & Gas – solar capacity in their service territories will jump from 5.4 MW today (of a total of 8 MW in the state as a whole installed at the end of 2013) to 195 MW by 2021. While that number is still small relative to the amount of solar development in neighboring states North Carolina and Georgia, which are expected to each have more than a gigawatt of installed solar by 2016, it’s a significant step forward for South Carolina.