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Bright and sunny S.C. offers few incentives for selling solar power
By Molly Parker
Staff Writer
The $30,000 electric solar panel system that Libby Smith and Charlie Sneed installed on their James Island home in early April is little more than a very expensive rooftop decoration these days.
The Charleston couple is among a handful of South Carolina residents and businesses installing mini-power plants and thinking green, as in the color of the environmental movement, but also the color of money.
Ultimately, they hope to recoup their investments by cutting power bills substantially and reselling excess energy back to the utilities.
But solar advocates have been running up against a roadblock. Sunny South Carolina is one of only a handful of states without a regulated net metering program establishing what utilities must pay customers who harness alternative energy sources on their own accord.
That’s about to change.
“The time has come here,” said Libby Smith, who operates the Weight Watchers franchise in the eastern half of South Carolina.
She and her husband spent hours studying and lobbying for a consumer-friendly net metering program before deciding to fork over thousands to install a 3.3-kilowatt system on the south side of their 3,000-square-foot, two-story home.
“We didn’t exactly win, but we were given a much more attractive option,” she said.
The S.C. Public Service Commission is expected to soon rule on proposals from SCE&G, Progress Energy and Duke Energy outlining what they will pay customers for their excess energy.
But complicated and expensive, the movement is dishing out a lesson in patience and perseverance for the pioneering few.
Recently, Half-Moon Outfitters did manage to convince SCE&G to enter into a contract to buy back excess power from the 4.2-kilowatt solar system located on the North Charleston warehouse. But it’s the utility’s first and only customer to do so, and getting SCE&G on board was no easy feat, said company owner Beezer Molton.
“Generally, they were polite, but they just put us off and put us off for months,” Molton said. “They ended up complying and doing it, but it was a long, drawn-out process and what they pay is not what other states pay.”
Losing side
Considering the $13 monthly fee SCE&G charges Half-Moon Outfitters to operate the net metering program, Beezer said he ends up on the losing side of the deal, financially.
In early April, David Odell, a solar distributor located just outside Greenville, argued in a Public Service Commission hearing that the utilities’ plans do not go far enough to encourage alternative power generation.
Odell is concerned that South Carolina is quickly slipping behind the curve and not doing enough to make up for it. He is pushing for “true net metering,” which he called an equal exchange rate between what the utility charges for power and what it will pay net generators.
Some large utilities have embraced that idea, particularly in states with renewable-energy requirements because it can help them meet their green quotas.
But the investor-owned utilities in South Carolina, where no such quota exists, say that’s not fair to other customers.
“We don’t want our other customers to subsidize a net generator, which would be the case if we couldn’t include some of those fixed costs,” Duke Energy spokesman Andy Thompson said.
The per-kilowatt hour charge to customers is a bundled rate that includes the cost of fuel, but also the price of transmitting and distributing the power. The utilities’ plans before the Public Service Commission would only reimburse net generators their ‘avoided costs,’ essentially the price of coal or gas.
The plan Duke Energy submitted to the Public Service Commission is nearly identical to one the utility has offered its North Carolina customers since 2001. In seven years, no one has signed up, Thompson said.
There are solar generators in the Tar Heel State, he said, but they opt instead for a more lucrative reimbursement option through a utility-sponsored nonprofit called N.C. Green.
South Carolina’s utilities and the S.C. Energy Office all recently contributed $10,000 apiece to establish a similar nonprofit here called Palmetto Clean Energy. The program solicits donations — $4 buys 100 kilowatt hours of green power — from utility customers who want to encourage alternative energy suppliers.
“Basically it gives people who want to encourage green power but can’t afford a solar system the opportunity to put money toward helping someone else bring green power online,” said John Clark, director of the S.C. Energy Office.
Tough sell
Power companies in South Carolina aren’t the only ones slow to warm up to the idea of net metering. Customers aren’t exactly electrified either.
Last August, as Santee Cooper fought a public relations battle over a coal plant proposal in rural Florence County, the utility’s board of directors approved the state’s first net metering plan.
It went online Oct. 1, and seven months later, not a single customer had signed up.
The publicly owned utility also offered zero-interest loans up to $40,000 for solar panels, and later a $12,000 rebate for the first 10 qualified customers that applied. A few interested applicants did trickle in. Thus far, seven applicants have been approved and another five are under review, said Marc Tye, the utility’s vice president of conservation and renewable energy.
“We do it because it’s the right thing to do but it highlights the challenges we face in pushing renewables,” utility spokeswoman Laura Varn said.
Part of that may have to do with the fact that power in South Carolina is relatively cheap compared to the rest of the country, and it may not make sense, from a strictly economic standpoint, for a business or resident to install a solar panel system, though large tax incentives are available at the state and federal level.
Even businesses and homes that do make a go of it find they hardly generate enough power to make a dent in their electric usage let alone to make it worthwhile to sign up for a net metering program.
The 60 solar panels installed at the northern end of the Charleston Battery’s soccer stadium in February generate on average 50 kilowatt hours of power per day.
That provides enough power for just a fraction of the organization’s daily usage, said Andrew Bell, director of soccer and stadium operations.
“It would be great if we could get to a situation in the winter months where we are very efficient here, and the stadium is shut down, that we use less energy than we create, but we’re just not at that point,” Bell said.
The team is considering adding wind turbines to harness the almost constant breezes blowing across Daniel Island to increase their energy independence, he said.
Confusing to navigate
Others may be deterred by the complicated process. Even the utility companies acknowledge that the rate structures they proposed can be dizzying to navigate.
Duke is working on an online database that will aid customers, Thomson said.
Essentially, each utility will offer two options for energy-producing customers, a flat rate and a metered tariff. Under the flat rate, the utility and customer exchange power at the same rate, which differs depending on the season and the time of day. Both what the customer pays and the utility will reimburse for power is less than what a standard customer pays for the same electricity.
For SCE&G customers, the second option offers six different rates for purchasing the power, and it is coupled with one rate for energy that is sold back to the utility.
While calling some of the details “sticky,” SCE&G spokeswoman Ashley Monts said she doubts people interested enough in solar systems will let the math deter them.
“The technology that’s required to do this is fairly complicated so the people who are interested in these rates are already going to be there,” she said.
Libby Smith has a different point of view. While she recovered from surgery last month, her husband spent several days in Columbia arguing their case before the Public Service Commission.
And they spent hours poring over the paperwork, trying to figure out the utilities’ proposals and how it would impact their power bill.
She can easily understand why someone would rather avoid the headache.
“Honest to God, it took me hours and hours on the phone to figure out how it would work,” she said.
Molly Parker is a staff writer for the Business Journal. E-mail her directly at mparker@scbiznews.com.
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