The South Carolina Public Service Commission (PSC) has approved a new time-variable net metering tariff intended to more closely align Duke Energy customers' bills with the costs and savings the utility is realizing.
Customers with rooftop solar will continue to receive 1-to-1 credits for surplus electricity they put on the grid, but the rates they pay — and receive — will vary by time of day. When solar power is abundant, customers will receive a smaller credit but also pay less for any electricity they use. Credits will increase during periods of peak demand.
Kate Mixson, a staff attorney for the Southern Environmental Law Center (SELC) in South Carolina, said her firm hopes to use the South Carolina tariff as a model for other states and, eventually, for other distributed energy resources.
While other states move to reduce the value of net metering customers, Duke Energy and clean energy advocates in South Carolina believe they have found a way to preserve full 1-to-1 credits while better aligning customers' bills with the costs and incentives utilities are realizing.
A new time-variable approach to accounting electrical costs and credits, which the South Carolina PSC approved on Wednesday, will still provide net metering customers with credits for the full value of the electricity they generate, but the value of that electricity will vary, with different rates for peak, off-peak, super-off-peak, and critical peak periods. Customers will also pay a monthly minimum bill, according to the terms of a stipulation negotiated last November by Duke Energy, SELC, the North Carolina Sustainable Energy Association, Sunrun, Vote Solar, and other environmental and solar industry groups.
The agreement grandfathers existing customers into the current rate structure until 2025 or 2029, depending on when they installed their rooftop system.
"This is ultimately a win for current and future customers in South Carolina, and will ensure the local rooftop solar market continues to grow," Will Giese, southeast regional director at the Solar Energy Industries Association, said in a statement.
Duke Energy spokesperson Randy Wheeless also expressed appreciation for the commission's decision, and he acknowledged "the considerable stakeholder involvement that led to the compromise offered in this case."
The rate structure will reward customers for saving or generating electricity during peak demand hours. The savings customers realize by installing a rooftop system will only decrease by about 10% compared with the current rate structure, according to Mixson. Additional provisions of the stipulation agreement that the South Carolina PSC is still reviewing could result in increased savings for customers with rooftop solar and smart thermostats, Mixson said.
"We think this more fairly values the benefits of solar to the system because it is actually looking at how rooftop solar can help reduce peak demand, and compensate solar customers accordingly," she said.
Mixson said the agreement is intended to both comply with South Carolina's Energy Freedom Act of 2019 and to prevent conflict from arising between Duke Energy and the state's solar installers, conflict that other states have seen. But long term, she said, the new agreement could serve as a model for Duke Energy's North Carolina customers — and for future distributed resources, such as EVs and batteries.
"We think moving South Carolina toward the next phase of net metering is important now because it will enable customers to continue to install rooftop solar, which reduces the demand on Duke's system," Mixson said. "But also, because this uses time-of-use rates that align with the utility system peaks, it could help to establish a foundation for other distributed resources in the future ... More clean energy resources can only be a good thing, especially when it's helping customers save on their electric bills."