Source: Energy News Network

When regulators allowed Duke Energy to lower bill credits to homes with rooftop solar, critics warned the solar industry would suffer a major loss. 

A year after the new rates took effect, available data show those detractors had a point, with new household solar connections in Duke territory on pace to drop about 40% compared to 2023. 

Yet the reason for the dip is multifaceted — ranging from steep interest rates to the loss of a popular rebate program — and seems to have had little impact on longtime installers in the state.

Indeed, many say they’re optimistic about the future of home solar, partly because of new Duke incentives for home batteries that are already having an impact. Their push now is to extend and expand them.  

“We believe this is a strong way forward to support our utility grid and the ability of homeowners to produce and use their own energy,” said Brandon Pendry, communications specialist at Southern Energy Management, an installer based in Raleigh. 

A complex truce on net metering

Most homes that go solar stay connected to the utility grid, drawing electricity at night and providing surplus power on sunny days. The question is what bargain these solar owners strike with their utility for this give and take, known as net metering.  

The arrangement for Duke’s North Carolina customers was long straightforward: they bought the electrons they needed at the retail rate and sold excess ones back at the same rate. Like all customers, they faced a minimum bill charge for the company’s fixed grid costs, such as poles and wires.

But this approach has downsides for a for-profit utility like Duke, whose business model depends on buying or producing electrons at one cost and selling them for a higher one. Like many utilities around the country, Duke had sought for years to impose more costs on solar customers and credit them less for their contributions to the grid. 

A major campaign contributor in the state legislature with an army of lobbyists, Duke helped write and pass two laws, one in 2017 and another in 2021, requiring an end to retail net metering by 2027. 

Seeking to avoid the bruising battles over net metering seen in California and other states, some North Carolina solar installers and clean energy advocacy nonprofits sought – and achieved – compromise with Duke instead. 

Under the deal, new solar customers can choose a “time of use” rate, in which they’re rewarded more for electrons they add to the grid, and charged more for those they subtract, during times of heavy demand. Alternatively, until the start of 2027, customers can select a “bridge rate,” in which they get a one-to-one exchange for electrons taken from and given to the grid. 

While sophisticated customers might conceivably squeeze out substantial benefits of solar with the time-of-use rates, installers pushed the bridge rate for its simplicity and certainty, which they deem nearly as good as the old net metering rate.

“All in all, I think residential solar installers are feeling excited about where the industry is going right now,” said Matt Abele, the executive director of the North Carolina Sustainable Energy Association.

Industry cross currents 

But the dip in sales since the complex truce took effect is undeniable. Abele’s group tracked a huge spike in solar projects registered with state regulators in September 2023, just before the new net metering rates were implemented, followed by a steep drop off that bottomed out last December.  

Different metrics supplied by Duke — solar connections rather than registrations — show new solar rooftop customers on pace to number about 5,300 in 2024, compared to about 9,100 in 2023 and 10,200 in 2022. The number also falls well short of Duke’s own predictions for new residential solar customers for this year of 11,400. 

Yet the installers contacted for this article were largely unfazed. Reached before the devastation of Hurricane Helene, Clary Franko, chief operating officer at Asheville’s Sugar Hollow Solar, predicted sales this year would be lower than last, but not by a huge amount. “Hooray for the bridge rate!” she said. 

Executives at Yes Solar Solutions, based in Cary, agreed. “In residential, the net metering bridge rate has kind of kept things intact,” said Stew Miller, president of the company. “I think everybody’s doing as well as to be expected.” 

And Pendry at Southern Energy Management said his company had more potential customers this year than the year before.  

“Looking back at our previous 12-month period, we saw high interest from homeowners who wanted to lock into the legacy net metering program,” he said. “Moving into this last 12-month period, we have seen slightly more interest in solar overall.” 

The disconnect between these companies’ optimism and the decline in sales may reflect that fewer installers are doing business now in North Carolina, with 40 companies registering new systems in the state in August versus 57 last September, according to the North Carolina Sustainable Energy Association. 

Indeed, established rooftop solar companies say part of their business model now includes cleaning up after so-called bad actors, who installed panels incorrectly or incompletely during the heady days of the early 2020’s.

“There were so many systems that were put in in our area that we’re having to redo,” said Dave Hollister, president of Asheville-based Sundance Solar Systems. “It’s been a significant problem in our community.”

Still, Danille Dupre, head of communications with EnergySage, a nonprofit that helps connect vetted solar companies with customers, says her group “hasn’t seen any decrease in the number of active vetted installers working in the state,” adding, “anecdotally speaking, we, too, have heard installers being optimistic.”

It’s also true that the most successful companies are used to the “solar coaster,” the ebb and flow of sales based on policies as well as market conditions. Installations rose sharply immediately after the pandemic, when Duke was still offering rebates, the old net metering rates were in effect, and interest rates were low. That all changed. 

“As usual, we have all these cross currents in the industry,” said Hollister. “I can say that probably the biggest chilling effect was the interest rate hikes.” 

‘An incredible program’

There’s another key factor fueling hope among solar installers: Power Pair, a battery incentive program implemented this spring that was the final puzzle piece in the net metering compromise with Duke. 

For adding a home battery, Duke customers can get a rebate on both it and their solar array. Combined with a 30% federal tax credit, the cash back could cut the cost of an average $40,500 system down to less than $20,000. 

Power Pair participants subscribed to the simpler bridge rate allow Duke to remotely manage their battery and earn an extra $37 a month on average. Enrollees in the more complicated time-of-use rate plan, on the other hand, don’t get monthly incentives but do retain full control of their systems. 

Installers say the incentive is a huge hit, with the great majority of their customers now choosing the bridge rate and buying a battery along with solar panels.

“It’s gotten us to a place where we always thought we would be,” said Miller of Yes Solar, “in that many, if not most, solar systems now include some element of storage.”

The battery inducement drove interest in solar overall, said Bryce Bruncati, director of residential sales with 8M Solar. A whopping 95% of its customers are now installing batteries with their solar systems, as opposed to about a quarter before. “The Power Pair program has been a big success,” he said. 

The uptick in batteries occurred statewide, according to Dupre. “Specifically, 69% of North Carolina homeowners who went solar with EnergySage in Q3 2024 included battery storage,” she said in an email, “compared to just 8% in Q3 2023.”

Still, Power Pair is just a pilot program, set to end when each Duke utility reaches a capacity of 30,000 kilowatts. Duke reports about 2,000 participants as of early September. According to the company’s website, the utility serving the Asheville area and the eastern part of the state is 64% full, and the one serving central North Carolina is 79% full.

For the solar industry and its advocates, then, the priorities looking forward are several. Extend Power Pair, and count on market forces to make batteries and rooftop solar economically attractive even when the bridge rate expires in 2027. At the same time, expand the incentives to include small businesses and nonprofits, currently under new net metering rates.

“Power Pair has been an incredible program,” said Sugar Hollow’s Franko. Extending it to the commercial sector would make a huge difference, she said, “opening the door for new types of industries that probably aren’t thinking about this because sustainability isn’t their goal, but reliability would be.”

Home rooftop solar dips in N.C. after Duke Energy reduces payments, but many installers unfazed is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

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