South Carolina is proving to be a fertile ground for solar energy innovation and collaboration among renewable energy stakeholders, utilities and regulators. But much work remains to be done to ensure that solar is universally available and affordable to those who stand to benefit the most from it — low-income families who work hard to pay their monthly electric bills.
A law passed last year to establish a reliable, efficient and diversified energy portfolio for South Carolina provides a clear set of consumer protections to aid homeowners in accessing safe and reliable solar power. It also requires utilities to collaborate with regulators in protecting non-solar households from bearing the entire cost of maintaining the electric grid.
The method by which solar households sell the power they generate back to the utility is called “net metering” — a controversial subject in the solar space. In a nutshell, net metering requires utilities to purchase excess solar power generated by homes with rooftop solar panels. Utilities purchase this power at the same price that they charge their residential customers, allowing homeowners to drive their bill to zero if they sell back enough power. This is a great incentive for those households that can afford to install expensive solar equipment. But for everyone else, it creates more problems than benefits. Utilities, for example, must pay more for this power than they might pay from wholesale providers. To make up for revenues lost in this arrangement, utilities are left with little choice but to raise the prices of non-solar users, a group that is mostly comprised of low-income and working-class households. This means the poor are subsidizing lower electric bills for much better-off households.
Fortunately, the new law puts South Carolina on a path toward transitioning away from this regressive cost-shifting, with a formula that pays for rooftop solar energy based on the difference between the applicable retail rate and the value of net metering. This rate will be subject to statutory caps, providing much-needed relief for the poor.
Meanwhile, major utilities have reached an agreement on several community-scale solar projects, which will help solar capacity in the state grow fifty-fold, from 2 megawatts to around 110 megawatts. Among the partners in this effort are Duke Energy, the S.C. Office of Regulatory Staff, the Coastal Conservation League, the S.C. Solar Business Alliance, the Southern Alliance for Clean Energy and the Alliance for Solar Choice. Under the agreement, utilities will begin rolling out community solar programs in early 2016. On the rooftop solar front, Duke will start offering rebates to residential and non-residential customers who install solar panels.
Thanks to the efforts of our policymakers, the 2014 law and related initiatives have jump-started solar growth here in South Carolina. Opportunities to benefit from this cleaner form of energy are rapidly becoming available to a larger share of the population, which is also good for the economy because it will expand the solar industry and create more jobs for South Carolinians.
The only thing missing at this point is a comprehensive focus on ensuring that low-income and working-class families are taking advantage of these opportunities. Efforts such as community solar represent a promising start, but more can be done. Future solar policies and programs must make solar available to renters and low-income families, who would gain the most from clean renewable energy and the chance to reduce their monthly electric bills.
South Carolina should be applauded for its efforts to establish equitable solar policies that balance the interests of all stakeholders. Future actions by policymakers should focus on expanding access to those who have traditionally been left out of solar because they are unable to afford equipment or do not own their own homes.
Ms. Littlejohn is president and CEO of the Urban League of the Upstate; contact her at email@example.com.