SC solar bill is no quick fix

sfretwell@thestate.comApril 12, 2014 

Stephen Morrison's timber framing business in Oconee county utilizes solar power to supplement his power needs.

TIM DOMINICK — tdominick@thestate.com Buy Photo

  • The solar use bill

    • Requires utilities to invest in or buy solar power by 2021 to increase the use of the renewable energy form. The required amount is 2 percent of a utility’s average peak demand, based on a five-year average.

    • Requires utilities, within one year, to develop a program to help nonprofit groups gain access to solar power.

    • Allows solar -leasing, a method that can reduce high upfront costs of installing solar.

    • Delays leasing programs until state regulators review reimbursement rates for people who generate solar power from their roofs.

    • Allows utilities to recover some costs, which could mean a rate increase, for solar programs.

    • Loosens a restrictive statewide cap that prevents big box retail stores, universities and others from adding more solar.

— For people hoping to install low-cost solar panels on their roofs, a plan working its way through the state Legislature doesn’t guarantee that will happen any time soon.

If the bill passes, it could be a year or more until a statewide program would be established that many hope would lower the price of home solar energy systems.

Then, assuming the program is launched, finding a private company to offer affordable solar energy systems could be a challenge. Some of the nation’s leading rooftop solar companies have strongly indicated they won’t come to South Carolina, if the heavily amended bill passes. They say it gives power companies an unfair advantage over solar companies.

Solar energy boosters in South Carolina acknowledge that it could take time to establish a program that could bring cheaper rooftop sun power systems to the state.

But they say the legislation is a good compromise with utility companies that eventually would improve the state’s now dim solar market – and that means jobs.

Within a decade, the state could have more than 300 megawatts of solar installed, say sun boosters in South Carolina. That could create up to $600 million in direct investment in solar energy alone, industry officials predict. The state’s restrictive solar policies have now allowed only about 7 megawatts of sun power installations.

Affordable rooftop solar energy systems would eventually take off, as would systems for retail stores and large solar farms, say those familiar with the legislation. All phases of the solar business would employ workers across the state as systems were put in place, bill supporters say.

“What you get is a renewable energy policy that will help us move into the 21st century electrical grid,” said Grant Reeves, who heads the S.C. Solar Business Alliance. “If we don’t get this done, we’ll continue to be seen as behind the times when it comes to renewable energy.”

A key part of the bill is a requirement that utilities invest in or acquire a certain percentage of solar power by 2021, a move renewable energy advocates say will spur power companies to seek more energy from the sun. The amount required is 2 percent of a company’s average peak demand. That could be done by establishing their own rooftop solar programs or building solar farms, which SCE&G already is planning. Utilities like it because they could recover some costs.

On Wednesday, Reeves is scheduled to address the S.C. Public Service Commission on solar power and what the legislation will do. Reeves, a senior vice president with the Intertech Group, has been one of the major players in negotiations to open the state’s solar market, now one of the worst in the country because of historic utility company opposition.

No quick fix

While the solar industry may well brighten in South Carolina, those wanting low-cost rooftop solar systems likely will have to wait – even if the bill passes this year, which itself is in question. How the bill affects individuals wanting solar is a key concern for Rep. James Smith, one of sun power’s biggest boosters in the S.C. Legislature.

“I don’t want to pass a solar bill with the notion that we have fixed solar and can move forward, and have people believe and understand that, and it not happen,” Smith, D-Richland, said, noting that the legislation’s basic point should be “making solar accessible.”

Solar panels reduce reliance on electricity provided by power companies. And that can lower monthly energy bills, sometimes substantially. But the key is being able to pay for rooftop solar systems upfront. A rooftop solar array for a person’s home can cost up to $20,000. Churches and schools also interested in solar to lower monthly bills pay even more.

Smith and Sen. Greg Gregory, R-Lancaster, introduced relatively simple bills last year that would have allowed rooftop solar to expand so people could afford it. But power companies didn’t like the legislation, concerned that it could allow outside companies that provide affordable solar energy systems to open in designated utility territories – a prospect that could cost them money.

The Senate bill since has been amended to become a 15-page document with caveats to protect power companies. The legislation is complex and few lawmakers seem to understand it fully. It allows utilities to recover some of their costs when expanding solar programs, which could mean rate increases.

It also delays the start of a program intended to lower solar panel costs for homeowners and businesses. The latter program would allow private companies, for the first time in South Carolina, to begin leasing solar panels at little or no upfront cost to homeowners, businesses and others. By using government tax credits, lease payments and favorable interest rates from banks, private solar companies can offer low enough rates on leases that homeowners can actually save money on their power bills each month. Utilities can do that under current law, but never have in any substantive way.

But under the amended bill, private leasing arrangements can’t occur until another issue is resolved. That issue centers on how much credit the power company will give a person for producing electricity from rooftop solar panels. Power companies are pushing to examine the matter, which could lower their reimbursement costs to homeowners who produce solar.

Dukes Scott, director of the state Office of Regulatory Staff, said resolving that could take at least a year.

In addition, another part of the bill says power companies have a year to develop solar energy programs for nonprofit groups, but provides no direction on how that would be structured.

West Coast challenge

The Alliance for Solar Choice, an organization formed by some of the country’s most prominent rooftop solar companies, is leading a charge against the legislation. The alliance has hired high-powered lobbyist Warren Tompkins to fight the compromise that it says goes too far to protect power companies.

If the amended bill passes, it will offer less incentive for the companies to ever come to South Carolina, alliance officials said. One concern is that utilities will be allowed to recover costs, which could allow them to be reimbursed through rate increases for some solar expenses. Private companies say they don’t have that kind of cushion. They also say the state’s tax incentives for solar, included in another bill, need improvement.

Members of the alliance include SunRun, Solar City, Sungevity and Verengo, all companies that are active in financing solar power systems for homeowners in the western U.S., where solar laws are easier for the public to navigate.

“I don’t see it as allowing outside companies to come in,” said Susan Glick, a spokeswoman for SunRun, headquartered in California. “Sun Run is interested in bringing solar to as many homes as possible, but it needs a stable environment.”

Harvey Bryan, who teaches solar engineering at Arizona State University, said alliance members are well-suited to provide rooftop solar in states willing to make solar laws more friendly.

“They are the game right now,” Bryan said. “If they say it’s not a good law and they’re not going to come in, they’ll just go to another state.”

Those involved in South Carolina’s small solar industry say they believe other companies would begin providing leases to South Carolina residents for solar power, even if the West Coast companies steer clear. Power companies may also provide their own programs.

“SCE&G customers will benefit from the reliability of a diversified energy portfolio that includes solar energy, and those customers who want solar will have greater access through leasing programs,” power company spokeswoman Emily Brady said in an email. “It will also give utilities, like SCE&G, the opportunity to recover costs associated with renewable energy development, if plans are approved.”

Bruce Wood, a solar businessman from Greenville, said the amended bill satisfies the concerns of solar boosters and utilities.

“We are not a liberal state that is going to go in and roll over our Legislature and all of a sudden have all these pro-solar polices,” Wood said. “Let’s face it, the utility owns a lot of the Legislature. If we are going to get anything, it has to be all of us agreeing.”

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