Beginning in 2024, Duke Energy will offer a “tariffed on-bill” energy efficiency program to customers in North Carolina that supporters say will be one of the first-of-its-kind for an investor-owned utility.
The program will provide customers with access to upgraded heating and cooling appliances, home retrofits like insulation and air sealing, heat pump water heaters, and HVAC duct repair or replacement. The improvements will be paid for through a charge on the customer’s bill.
“Tariffed on-bill programs have dramatically increased access to energy efficiency upgrades and demand-side management resources across the country in electric cooperative territories, but investor-owned utilities have been slow to adopt them,” Shelley Hudson Robbins, project director at the nonprofit Clean Energy Group, said in a statement.
The North Carolina Utilities Commission issued an order in August approving the program for Duke Energy Progress and Duke Energy Carolinas, and the utility on Oct. 1 began implementing new rates to cover implementation.
The North Carolina Sustainable Energy Association, Clean Energy Group, Southern Environmental Law Center and Southern Alliance for Clean Energy say the “innovative” program will help customers, including low-to-moderate income residents, access efficiency upgrades and utility savings while also helping Duke to meet carbon reduction goals.
“This is a monumental decision by the North Carolina Utilities Commission – as it stands to potentially help thousands of families across North Carolina,” said Daniel Pate, energy program manager at the N.C. Sustainable Energy Association. “Today, we’re excited to finally see a program designed to address the barrier of the upfront costs of residential energy efficiency.”
The process of making home upgrades begins with the utility reaching out to customers who likely have the greatest opportunity to benefit from energy efficiency, Casey Fields, Duke’s strategy and collaborations manager, said in an email. However, almost any customer with 12 months of usage data may participate.
Customers are asked to complete an enrollment form and schedule a home audit, Fields said. Duke will then model the customer’s projected energy savings, calculate available efficiency incentives and conduct a cost benefit analysis to make sure estimated benefits outweigh costs.
“If a customer accepts the proposal, then Duke Energy will schedule a vetted local trade ally to complete the installations,” Fields said. “A quality assurance check of the improvements will be conducted, and for certain improvements (like HVAC) semi-annual maintenance plans will be set up.”
It takes about a month for customers to see monthly charges about 30 days after efficiency upgrades are complete. If the customer moves out of their home, then the new customer will be notified by Duke Energy of the monthly charge, Fields said.
The program provides three major sets of benefits, said Fields: upfront cost reductions for efficiency upgrades, improvements to home comfort, and savings on customer bills.
“A major barrier to customers are the upfront costs needed to get this kind of work complete,” Fields said. “Being able to charge a portion of that cost monthly on their electric bill may remove the barrier of having to gather all the cash together upfront.”
Rebates available through the Inflation Reduction Act may help Duke to offer the program to more customers, Fields said.
Correction: A previous version of this story erred in its description of customer bill impacts. Annual bill savings are estimated.