Doing What They Can: New Regulations and the Decision to Go Solar
A Senate bill adds new incentives for prospective solar customers while the state rolls back old ones. Despite the costs, one couple says they are doing their small part to fight climate disaster.
CEDAR MOUNTAIN — Yes, Greg and Stephanie Thomas like the energy independence, the protection from Cedar Mountain’s frequent power outages, provided by their new, deluxe array of rooftop solar panels and storage batteries.
But, no, they’re not doomsday preppers, looking forward to a solitary life off the grid.
For one thing, they’re too neighborly.
“If you want to charge your phone when the power’s out during the zombie apocalypse, you’re more than welcome,” Stephanie Thomas said.
More to the point, they say, people have to come together to fight the catastrophe they have in mind, global warming. They read the increasingly routine reports about cataclysmic weather events — floods, fires, droughts and heat waves. They listen to scientists who say we should expect more of the same, and worse, in the future.
They are encouraged that, even as the state of North Carolina is rolling back incentives for solar installations, new ones are included in a bill recently passed by the United States Senate.
It’s a small step towards building a power supply free of dependence on carbon-emitting fossil fuels, they say, and so are their solar panels.
They are willing to accept that they will never make their money back on savings from future electric bills.
“Unless you’re 20 and plan to hold on to your house for 40 years,” said Greg Thomas, 60, “You’ll die first.”
They are aware of obstacles such as the limited storage for solar energy and the social and environmental trade-offs of expanding this capacity — mining cobalt for lithium-ion batteries, to name just one.
But investing in sustainable power, building the market, is the only way to clear these hurdles, to build a clean energy system, to not prepare for doomsday, but to take a small role in preventing it.
“Everybody’s learning from this process. We are, Duke (Energy) is, (their installation company) Sugar Hollow Solar is. The more we learn, the better it will be everywhere, the sooner it will become affordable for everyone,” Stephanie Thomas said.
“We have to start somewhere. We have to reduce our dependence on fossil fuels. Because we can do something, we should.”
New — and Disappearing — Incentives
The main benefit to prospective solar customers in the recently passed Inflation Reduction Act is the bolstering and extending of the long-standing federal tax break for installations.
These now stand at 26 percent and were previously scheduled to fall to 22 percent next year before disappearing altogether. The bill restores this incentive for the next 10 years to its previous level of 30 percent, which will knock nearly a third off initial installation costs.
“That’s the really big one,” said Clary Franko, chief operating officer of Sugar Hollow Solar, in Asheville. “It was set to expire at the end of next year.”
Another big incentive is included in a proposed agreement before the North Carolina Utilities Commission reached by solar companies and Charlotte-based Duke, one of the nation’s largest electric utilities and the main supplier of homes and businesses in Transylvania County.
A 60-cent-per-watt rebate from Duke for the cost of solar installation would be available for customers meeting certain criteria and replace the current, lottery-like rebate program. A typical residential array, designed to produce eight kilowatts, for example, would qualify for a rebate of $4,800 on top of the federal tax breaks.
If that’s good news for solar, the law that forced the settlement is not so good, Franko and others said. House Bill 951, passed in 2021, requires the Commission to revisit the state’s policy on net energy metering (NEM), a crucial tool for recouping solar investments in North Carolina since 2005.
Rooftop solar systems usually produce more than enough power in the middle of the day to cover owners’ needs, with the excess flowing back onto the grid. Current policy requires utilities to pay as much for this excess energy as customers are charged for it, about 9.4 cents per kilowatt hour for Duke homeowners and businesses in Transylvania.
Though the Commission hasn’t agreed on a new standard, the proposed settlement calls for this simple rule to be replaced by a complicated formula based on “time of use” — meaning lower repayment rates during daylight hours, when solar production soars and demand dips.
During high-demand mornings and evenings, “when you are pulling power back from the grid, you are paying the market rate, which is probably three times as high,” said Franko said.
That she cannot be more exact about this figure is another problem, she said. Besides adding other discouraging provisions, such as increasing the base monthly fee for connection to the grid, the elements of the proposal “are all so complicated,” she said.
“The new rates are going to be hard to understand and convey to customers really what they are getting into.”
The “Solar Coaster”
Changes in government policy have a history of creating ups and downs in the renewables industry, said Matt Abele, communications director for the non-profit North Carolina Sustainable Energy Association.
“They call it the ‘solar coaster,’ ” he said, and the proposed changes in North Carolina are part of a national trend toward dismantling traditional net metering rules that have helped propel rooftop solar business in recent years. It’s even happened in sun-baked Nevada, Arizona and California, according to a recent blog post on his group’s website.
“NEM, since it helps homeowners reduce their energy bills, is almost constantly under attack from utilities that don’t want to lose that revenue,” the post says.
Other measures, meanwhile, have undermined the state’s once-booming business in the large, third-party installations responsible for most of North Carolina’s solar production. Until a few years ago, the state ranked second in the nation for solar capacity, behind only California.
It has since slipped to fourth — with solar accounting for slightly more than 7 percent of its energy needs — partly because of earlier rule changes.
There was the 2015 elimination of a generous rebate on state taxes for both residential and industrial solar installations. A 2017 bill led to the reduction of the maximum size of these installations, lower rates of compensation and shorter contracts for the utilities’ purchase of the energy produced.
“The combination of all of those factors made it very uneconomical to continue to develop projects here in the state of North Carolina,” Abele said.
Other states, meanwhile, have made it easier to sell solar power directly to large companies mandated to reduce carbon emissions, said Ben Catt, chief executive officer of large-scale solar provider Pine Gate Renewables of Asheville.
“We do far more outside of North Carolina than we do inside North Carolina,” he said.
He understands that Duke is a publicly traded company that needs to maximize revenue and calls solar policy a “nuanced issue.”
Randy Wheeless, a Duke Energy spokesman, pointed to the state’s high ranking for solar production as evidence the industry is thriving here. So is the growth in the number of Duke customers in the state with rooftop panels since 2017, from 6,000 to 32,000.
Besides buying solar from large providers, the utility has embarked on its own projects to promote solar, including a 25-acre farm of panels on the former site of a Buncombe County landfill and a large storage facility in Asheville, he wrote in an email.
The new proposed net metering settlement, he wrote, simply takes into account the reality that solar production peaks when demand is low.
The changes in the reimbursement policy, he wrote, would “allow Duke Energy to pay rates for excess solar in line with what the value is at the time.”
The Upsides
Finally, Wheeless pointed out that the Sustainable Energy Association and other advocacy groups have backed the proposed agreement.
That’s true, Abele said, and though his group fought to preserve net metering, he sees upsides to both the settlement and legislation that led to it.
The 2021 act, for example, requires Duke to reduce carbon emissions by 70 percent by 2030 and achieve carbon neutrality by 2050.
That has triggered more competing plans before the Utilities Commission. Duke’s proposal relies too heavily on expensive investments such as small nuclear plants — investments that can be rewarded by higher rates from the Commission — and not enough on wind and solar, according to several filings by opponents of the plan.
Still, Abele said, the law “was the result of a lot of negotiation and there was some language that was very positive.”
Even proposed changes to metering would encourage habits crucial to the long-term advancement of solar feasibility, including the use of energy-sucking appliances and the charging of electric vehicles during the day, when rates are low and solar production peaks.
According to a calculation tool (screenshot below) on the group’s website, the proposed metering rates allow an average-sized residential solar array to create about $900 in annual savings on bills from Duke Energy Carolinas, the subsidiary that serves Transylvania.
And if the Thomases never expect to see a full return on their investment, most solar customers can, Franko said.
The Thomases spent about $63,000 on their battery pack and array of panels, which can produce as much as 12 kilowatts. Typical installations are about a third smaller and, without batteries, cost less than $30,000, Franko said. Customers who install systems before the end of this year will receive the current net metering rate until the start of 2027.
Along with other incentives, these help customers cover the cost of their installations long before the end of their 25-year lifetime, Franko said.
“The return on investment is, I believe, between 10 and 13 years for most customers who just add solar, not batteries.”
Researching “Every Angle”
Such calculations depend heavily on location, Franko said. Though online tools are available, she said, only a site visit from a technician can accurately predict output based on factors such as terrain, tree cover and local weather.
The Thomases live in a heavily wooded neighborhood. On the side of a mountain. In a temperate rainforest.
“We were probably on the hairy edge of this being advisable to do,” Greg Thomas said.
But at 2 p.m. on a hazy afternoon last week a quick check of his cell phone app told him his panels were generating 11.3 kilowatts, powering lights and air conditioning and pouring 7.8 kilowatts onto the grid — a rate that would cut 73 cents per hour off the Thomases’ electric bill.
If the net metering incentive goes away, as scheduled, they have options to store more of this excess. He and his wife currently keep their sleek bank of Tesla batteries charged at 80 percent to serve as a substitute for a top-of-the line propane-powered generator that would likely cost about $10,000. They also say the system will retain 60 percent of its value if they decide to sell their home.
Keeping more of these batteries’ capacity in reserve would allow them to absorb more of midday power. Same for their new electric Rivian pickup truck.
When Greg Thomas, a technology salesman, talks about these nuances it’s clear he just plain likes this stuff.
“You can just put in capital letters — GEEK,” he said of himself. But Stephanie Thomas, 53, the guest experience coordinator at Lake Toxaway’s Earthshine Lodge, has a more charitable view.
“He’s just a super-curious human,” she said. For every major purchase they make, every big decision, she said, he researches “every angle.”
Which means they know solar technology and policy. They know the expense of investing in it. They know the broader cost of failing to try to advance the industry.
“We don’t have children to leave this planet to, but we do have young people we care about, and we're leaving this planet to them,” Stephanie Thomas said.
“The least we can do is leave it heading in a better direction.”
Email: brevardnewsbeat@gmail.com