As the legislative session ended this week, South Carolina lawmakers approved a sweeping solar energy bill that will keep the state’s rooftop solar industry from collapsing and protect customers who seek to save money by installing sun panels on their homes.
The bill, the result of two years of negotiation between utilities and solar advocates, now needs only Gov. Henry McMaster’s signature to become law. McMaster spokesman Brian Symmes said the governor will sign the bill. The Senate voted for the bill Wednesday and the House approved it Thursday, the final day of the legislative session.
“We had a good deliberative process on some pretty groundbreaking clean energy legislation,’’ said Rebecca Haynes, deputy director of the Conservation Voters of South Carolina. “This saves the rooftop solar industry.’’
This week’s action is significant because it lifts restrictions that threatened to grind the state’s burgeoning rooftop solar industry to a halt. State law capped the amount of rooftop solar allowed in areas served by Dominion Energy and Duke Energy in South Carolina.
The Legislature’s action eliminates those caps, as well as restrictions on solar-leasing programs.
That’s important for homeowners because it means anyone seeking to install rooftop solar can get favorable rates from power companies for the energy they produce. The state Public Service Commission will re-evaluate the rate structure in two years, according to the bill approved by the Legislature
Passage of the bill also means rooftop solar companies can continue offering lease arrangements that make it affordable for people to install solar panels, which otherwise can be expensive to purchase. Lease arrangements allow homeowners to obtain solar panels without putting money down, according to Sunrun, a national rooftop solar company.
South Carolina’s solar industry was virtually non-existent before a 2014 law lifted some of the restrictions on sun power that, at the time, made the state one of the nation’s least friendly places to install solar. After that, solar companies began moving into the state and offering to provide sun panels that previously had been too expensive for many homeowners to afford.
But the state’s 2014 law established limits on how much the industry could grow after power companies raised concerns. The rooftop industry reached caps set by the 2014 law beginning last year.
Utilities long have questioned whether people using solar power would cost them and non-solar customer’s money. They have said non-solar customers might have to subsidize solar customers. Led by Duke Energy, utilities killed legislation in the House last year that would have lifted the limits on solar expansion.
During debate in the Senate this week, Sen. Gerald Malloy, D-Darlington, remained skeptical, questioning whether the legislation would hurt customers.
“Who is getting solar? Is it the average Joe getting it?,’’ Malloy asked. “What does it do to their utility bill?”
Sen. Tom Davis, R-Beaufort, said solar power is good for customers. It gives them freedom to produce some of their own energy to save money, without relying on big utilities that sometimes charge them unfairly, he said
Davis said a recent nuclear construction debacle opened many people’s eyes to the need for renewable energy. SCANA, now a part of Dominion Energy, and partner Santee Cooper quit building two nuclear reactors in Fairfield County two years ago after spending $9 billion and raising customers’ rates.
“It’s an important piece of Legislation,’’ Davis said. “We have historically relied upon an energy production model that has a utility with a territorial monopoly and has not had competition in the energy production sector. What this is , is a small step toward having markets determine what the cost of energy will be to the consumer.’’
Solar panels help homeowners reduce the need for power company energy during the day. Any excess energy they produce is sent to big utilities for use on the energy grid.
Under the existing law, people with solar panels are paid, or credited, the same amount by the power company for producing solar energy that they pay utilities to provide energy at night. The process is called net-metering. Lifting the caps means utilities will continue to offer the same amount, instead of cutting the amount they provide to customers.
The bill approved this week, however, is a compromise. It keeps rooftop solar rates the same for new customers who install solar by June 1, 2021, after which the state Public Service Commission would set the amount homeowners are paid by utilities for the energy they produce. People who install solar on their roofs between now and June 2021 could get favorable rates through mid- 2029, according to the law.
In addition to lifting caps on rooftop solar, the legislation also resolves a dispute between large-scale solar farm developers and Duke Energy over the length of energy contracts. The disagreement had held the bill up for months.
Companies that develop solar farms to supply energy to utilities say they need at least 10 year contracts with a power company so that they can get loans to build the farms. Contracts lock in the rates power companies will pay solar farm developers. But Duke Energy didn’t want to provide 10 year contracts, making it difficult for solar developers to get financing for their projects. The bill guarantees 10 year contracts for some solar developers who already have applied to provide power to utilities. The PSC would ultimately decide on the length of contracts for others.
Not only is solar energy touted as a way to save money for customers, producing power from the sun is considered more friendly to the environment than many major forms of energy.
Unlike coal and natural gas plants whose emissions contribute to global warming or nuclear plants that generate deadly atomic waste, solar doesn’t generate waste or contaminate the air. Both industrial-scale and rooftop solar can reduce utilities’ reliance on traditional forms of energy that hurt the environment, boosters say.
“More solar energy in our state also means less reliance on coal and natural gas, reduced carbon pollution, and cleaner air and water,’’’ the S.C. Coastal Conservation League said in a statement Wednesday evening. “The Conservation League has worked to remove obstacles to solar energy for more than a decade to reduce our dependence on the state’s coal-burning power plants.’’