South Carolina’s struggle with the expansion of solar energy intensified Tuesday in the state Legislature with the approval of two bills that take sharply different path’s on the industry’s future.
The House Labor Commerce and Industry Committee overwhelmingly approved a bill that could make it more expensive for homeowners to install sun-powered panels on their rooftops.
The bill, which sailed through the committee, eventually would eliminate subsidies that help homeowners afford the high costs of installing solar panels. Eliminating the subsidies would help utilities and customers who don’t use solar, but critics said it would chill an industry that has grown steadily since a 2014 law eased solar restrictions.
Hours later, another House committee voted on a bill intended to keep the industry viable, while allowing for possible expansion.
The House Judiciary Committee voted 18-5 to lift a four-year-old cap on solar power. Unless the cap is lifted, people no longer would be able to install solar panels at affordable rates in the future. So many customers have begun using solar power since the 2014 law passed that the state is nearing the cap. The cap could be reached in the next year.
Tuesday’s contrasting votes show the division among lawmakers over solar energy and sets up a showdown in the House of Representatives that could determine the industry’s long term viability in South Carolina.
Rep. James Smith, D-Richland, said South Carolina is at a crossroads on the future of solar. A solar backer, Smith said the decision boils down to whether legislators side with big utilities that are leery of solar expansion or average citizens looking for a way to lower power bills.
The issue is particularly important at a time when a failed nuclear project has driven up power bills for thousands of SCE&G customers in the Columbia and Charleston areas, he said. He said his bill -- and not the one approved by the labor committee -- is focused on helping the public, instead of big utilities. He accused utilities of pushing the bill approved by the labor committee.
“This is going to draw a bright line,’’ Smith said of the coming showdown in the House. “Who is responsible for South Carolina’s energy future?’’
Since legislators liberalized solar energy laws in 2014, the state has added about 3,000 jobs in the solar sector, industry boosters say. Some 4,000 homeowners have signed up for rooftop solar panels under lease or financing agreements made possible by the subsidies.
The bill intended to limit subsidies “would bring (solar expansion) to a screeching halt and we would lose thousands of jobs,’’ said Blan Holman, an attorney with the pro-solar Southern Environmental Law Center. "It would thwart the desire of property owners to control their energy costs.’’
State Rep. Bill Sandifer, R-Oconee, said he is not opposed to solar power but the existing system is unfair to power companies and customers who don’t use solar energy.
Utilities say non-solar customers are paying to subsidize solar customers – a point sun-power advocates sharply dispute.
That is akin to socialism, Sandifer said. “It is totally wrong for customers, or ratepayers who are not utilizing solar, to be paying for the people who are utilizing it. This prevents that.’’
Sandifer, who received $69,000 in campaign contributions from electric utilities and their employees from 2005 to 2017, noted the bill raises a limit on solar expansion to 4 percent from 2 percent of the five year average peak demand, which should help the industry. Smith’s bill eliminates the cap altogether.
At issue is a system known as "net-metering’’ that many people using solar power rely on. The system allows homeowners creating power through rooftop solar panels to sell energy back to a utility.
Now, residents with solar panels receive the same compensation for that power as they pay power companies when they buy power — such as times the sun is not shining.
Power companies want to pay less for solar power that homeowners produce, arguing it costs them money to accept that power.
Many lease agreements that solar companies have with homeowners are based on rates that are higher than power companies want to pay for solar power. Lowering those rates could, in effect, cause lease payments to rise for future customers. Existing customers now in lease agreements would not be affected by the law approved by the labor committee, said state Rep. Mike Forrester, R-Spartanburg.
Once one of the nation’s least friendly states for solar energy, South Carolina has experienced a dramatic increase in solar jobs and homeowners using solar panels since the Legislature overwhelmingly passed the 2014 law. That law allowed solar panel leasing, which made it cheaper for homeowners to install panels on their roofs.
Utilities have concerns about how the increasing use of solar power could affect their revenues and customers who do not use solar energy. Duke Energy and the state’s electric cooperatives recently spoke out against a bill that would liberalize the state’s solar energy laws.