SC regulators nix solar plan that Duke, others say would've saved customers $18M

A plea to South Carolina regulators to revisit their decision to reject an alternative energy initiative that Duke Energy said would have generated $18 million in savings fell on deaf ears.

The S.C. Public Service Commission has decided it won't reconsider the utility's "Smart Saver Solar as Energy Efficiency" program after previously rejecting it in January.

Environmental groups that supported the proposal and other advocates said the decision, announced last month, hurts the South Carolina customers that the Charlotte-based company serves. It also was described as a setback for the state's solar industry.

"Killing this initiative directly conflicts with the Legislature's 2019 Energy Freedom Act, which established the importance of providing customers with choices for lowering their electric bills and reducing peak electrical demand," said Kate Mixson, an attorney at the Southern Environmental Law Center, a nonprofit legal firm headquartered in Charlottesville, Va.

"By denying Duke's application ... the PSC is making it much more costly for customers who want to go solar," added Bryan Jacob of Southern Alliance for Clean Energy, a trade group.

Duke proposed offering rebates that could have saved customers who install solar panels about $3,500 and added savings to those who agreed to participate for 25 years in a program directed mainly toward winter electricity usage that would give the company control over their thermostats.

The utility giant delivers power in 30 South Carolina counties through Duke Energy Carolinas and Duke Energy Progress. It estimated the incentive program would have cost $12.5 million to run while saving its Upstate and Pee Dee ratepayers $26.5 million and $3.9 million, respectively.

During a hearing in November, primary expert witness Brian Horii of San Francisco-based Energy and Environmental Economics said 79 percent of the utility's customers would participate without any incentives. At that rate, the Public Service Commission later said, the program would save less than it would cost to run.

In pre-filed testimony and during the hearing, Horii also said the program did not meet the U.S. Energy Information Administration's technical definition of "energy efficiency." Duke said that definition was later revised but not until about a week after South Carolina regulators turned down the proposal.

In its bid for a rehearing, the utility said that based on its own experience, none of its customers agreed to the solar installation and thermostat program without incentives, adding that it had no reason to believe they would.

The cost of an average solar installation in South Carolina ranges from about $13,000 to $17,400.

The company also said that the decision to reject the deal based on outdated information "creates insurmountable barriers for future programs."

The Smart Saver proposal resulted from a compromise involving Duke, the solar industry and environmental groups.

"With today's high and volatile fossil fuel prices, this is exactly the wrong time for the commission to reject customer-based solar energy," said Eddy Moore of the Charleston-based Coastal Conservation League.

The cost of rooftop solar installation is already out of reach for many South Carolinians.

"Prices are certainly going up," said Nick Liberati, communications manager at EnergySage, an online solar marketplace backed by the U.S. Department of Energy.

Prices were up in 2021 for the first time since 2014, when the Boston-based platform started tracking quotes for residential projects submitted through its website.

"They've continued to go up this year," Liberati said.

Based on a solar panel system size of 5 kilowatts, the cost of an average solar installation in South Carolina ranges from $12,878 to $17,422. The estimates don't include any tax credits or incentives.

Without the rebates Duke was proposing, the economics of solar power in the utility's Palmetto State service territory do not look promising, said John Brooker, energy project manager with Conservation Voters of South Carolina.

"And that's not good for customers looking to save money or thethousands of South Carolinians currently employed by the solar industry," Brooker said.

The industry employs about 3,000 workers statewide, according to the latest data from the Solar Energy Industries Association.

Will Giese, Southeast regional director for the Solar Energy Industries Association, said the "disappointing decision" by regulators means less work for installers and "will have a chilling effect on South Carolina's ... rooftop solar market."

Culbert said the proposed program was an innovative way to provide incentives to consumers.

"It would have resulted in greater access to solar for Duke Energy customers while simultaneously reducing peak electrical demand, which benefits all customers," Culbert said.