The state House of Representatives backed the solar industry over South Carolina's major utilities Thursday, approving a bill that's intended to save solar jobs and allow more homeowners to put cost-saving sun panels on their roofs.
In a state reeling from high electricity costs, the House voted 64-33 to eliminate a cap that threatened to stop the solar industry's expansion in the Palmetto State. The fledgling industry is expected to reach the cap sometime this year.
If the cap is not lifted, South Carolina could lose thousands of jobs as alternative energy companies flee the state, many legislators and solar business people say. The measure now needs a routine final approval in the House before moving to the Senate for consideration.
State Reps. Peter McCoy, R-Charleston, and Leon Stavrinakis, D-Charleston, said the House's vote is a resounding message to state power companies that people need choices, such as solar, that can lower their electricity bills.
SCE&G and Santee Cooper have faced withering criticism for raising customer rates for the V.C. Summer nuclear expansion project, a decadelong, $9 billion construction effort that the companies quit last summer.
"When you talk about the credibility of utilities, they have zero right now,'' McCoy said. "No one wants to talk or negotiate with them, based on what we've learned. The trust has been absolutely lost. For me, this is just a good day for the solar industry and at the same time sending a message to utilities.''
Both SCE&G and Duke Energy had spoken against the bill approved Thursday, said Columbia Rep. James Smith, a Democratic candidate for governor who introduced the legislation. Smith said Duke had taken the lead because SCE&G has been heavily criticized over the nuclear fiasco.
""The utilities aren't for my bill,'' Smith said. "They are doing everything they can to fight my bill, including telling a lot of lies, talking about things that aren't true.''
At issue Thursday was the fallout from a 2014 South Carolina law that temporarily eased restrictions on the solar industry.
The law made it easier for businesses to lease solar panels to property owners who could not afford the high upfront cost of buying panels. Solar panels can cost as much as $20,000 to install on a rooftop. The law also guaranteed homeowners favorable electric rates once the panels were installed. It was intended to jump-start the industry.
But the law also included a 2 percent cap on solar expansion. The cap, or limit established in 2014, has nearly been reached as solar has grown more popular in South Carolina. The 2-percent solar cap is based on a company's total peak energy demand.
If the Senate concurs with Thursday's House vote, the cap will be lifted. By removing the cap, the state will continue to allow people interested in investing in rooftop solar panels to produce energy without excessive charges by utilities, said Tyson Grinstead, an official with solar company Sunrun. If the cap is reached, customers producing solar energy would not be guaranteed protection from utility charges, he said.
Utilities are leery of solar expansion, arguing that their customers who don’t use solar are paying for those who do use sun power. They favor keeping some limit on solar expansion.
Subsidies by non-solar users of solar users dominated debate Thursday. As part of the bill that passed, SCE&G and Duke would be barred from charging non-solar customers for any losses they incur by those who use solar power. Duke is expected to lose about $1 million annually in electricity sales to people who produce their own solar power, Smith said. The company would have to eat those costs or charge stockholders, instead of customers, he said.
SCE&G declined comment Thursday, but Duke Energy issued a statement after the vote, saying the House's action would hurt customers.
"We are disappointed in today's vote,'' Duke Energy spokeman Ryan Mosier said in an email. "As was discussed throughout the debate, this bill continues to subsidize the solar industry and is bad for customers.''
Spartanburg Republican Rep. Mike Forrester, a utility supporter, urged the Legislature to slow down and study the issue before taking major steps to aid the solar industry.
The House considered two bills Thursday: one that would rein in the solar industry and another that would help it expand.
The bill to keep tighter controls on the solar industry, pushed by Forrester and state Rep. Bill Sandifer, R-Oconee, would have allowed utilities to pay customers less for excess power generated by their panels. That's a key way solar customers lower their power bills.
Despite efforts by Sandifer and Forrester, the bill ultimately failed. Sandifer, also a utility industry supporter, received $69,000 in campaign contributions from electric utilities and their employees from 2005 to 2017.
The failure of the Forrester-Sandifer bill left legislators with the bill pushed by Democrat Smith to eliminate the 2 percent cap. After initially siding with Forrester and Sandifer, many House members ultimately backed Smith and a bi-partisan group of lawmakers who spoke for the legislation.
Smith has said the state must eliminate the cap to save solar jobs and help the industry grow. Solar companies that have moved into the state since 2014 have begun offering deals that help people pay for solar panels. Since the 2014 law passed, about 3,000 solar jobs have been added in South Carolina. About 4,000 homeowners have signed up for rooftop solar panels under lease or financing arrangements.
Previous legislative efforts to further boost the solar industry since the 2014 law passed have failed. But solar became a bigger player in the Legislature this year following the failure of the multi-billion dollar V.C. Summer nuclear project.
SCE&G residential customers, who are charged $27 a month on average for the bungled nuclear project, pay the country’s highest monthly power bills, federal statistics show. Other forms of energy, such as solar and wind, have been touted as a way to help offset the state’s reliance on traditional forms of energy such as coal and nuclear.
South Carolina once was one of the least friendly states for solar energy in the country. But after The State reported on the obstacles to solar power, the Legislature approved a bill in 2014 loosening limits on solar expansion.
One marginal victory for power companies in the bill that passed Thursday focused on excess energy produced by homes that make power from solar panels. Now, people who produce excess solar power can sell it back to the utilities for the same price they buy power from the utilities. That works out to about 13 cents per kilowatt hour.
Under compromise language in Smith's bill, the power companies could pay people less than homeowners are paying power companies for electricity. That would be about 5 cents per kilowatt hour.
But Smith and Grinstead said the bill protects solar-producing homeowners by not allowing power companies to charge them for producing power for their own use.
The victory for Smith's bill also is notable because one of the state's most influential business groups, the S.C. Chamber of Commerce, had sided with utilities.