Solar War Continues in North Carolina: Nonprofit vs. Duke Energy
In one of the remaining four states that explicitly ban third-party solar sales, a small nonprofit is continuing its fight against the nation’s biggest utility over the right to sell solar power to churches and other nonprofits without the utility’s involvement.
North Carolina Waste Awareness and Reduction Network (NC WARN), a 28-year-old environmental nonprofit with an annual budget of around $1.1 million, is fighting Duke Energy, a massive energy company that raked in $23.5 billion in revenue in 2015 and is valued at $54.4 billion.
Last year, the nonprofit wanted to clarify state law regarding third-party sales, so it picked a fight with the utility Goliath to spark a test case. NC WARN installed solar panels on the roof of a Greensboro church for free and started selling the energy back to the church at significantly lower rates than Duke Energy would charge. In typical power purchase agreements, customers pay the owner of the solar array less per watt than they’d have to pay a utility company, making residential solar more affordable and thus more accessible for customers.
The energy giant’s lost profits from NC WARN’s arrangement with Faith Community Church are minuscule, yet Duke Energy asked the North Carolina Utilities Commission last October to fine NC WARN up to $1,000 per day for selling energy to the church. At that time, it would have cost the nonprofit as much as $120,000.
On April 15, the utilities commission fined NC WARN $200 per day, amounting to roughly $60,000 and the nonprofit suspended its sales of solar electricity to the non-denominational, largely African-American church pending an appeal.
NC WARN will donate the solar array to the church if a final decision deems its actions illegal. But the group still has another chance to convince the commission to side with its vision for affordable renewables.
NC WARN argues in its appeal filed on May 16 that it is neither acting as a public utility, which would violate North Carolina law, nor competing with Duke Energy.
“Duke Energy obviously sought the unprecedented penalty in order to stifle NC WARN in various fights against the corporate behemoth,” wrote NC WARN Executive Director Jim Warren in a statement.
A Solar Company Operating in a Hostile State
Duke Energy Communications Manager Randy Wheeless cited Raleigh-based Baker Renewable Energy as an example of a company that operates legally, offering solar financing plans without selling the energy back to its customers.
But without third-party sales, “There’s no good way for churches, synagogues, town halls or schools to get clean energy if they want it right now because they can’t take the tax credit,” Jason Epstein, executive vice president and general manager of Baker, told DeSmog.
He said that beginning with “a model that deals with nonprofits” would be best, at first, so as not to “open up the spigot all at once.” Then the state could roll out residential third-party sales once the market is established.
Solar installers such as Baker would definitely get on board if third-party solar ever becomes legal in North Carolina. “If that’s an option available we’d team up with financing teams. Of course,” said Epstein.
Baker’s former “sample purchase and payback model” (archived here) included a state incentive for residents and businesses to purchase solar panels, a 35 percent tax write-off, which the North Carolina legislature let expire in 2015. Duke Energy failed to take a position on the measure, despite receiving a letter from Baker and other energy companies begging the energy giant to support the credit.
Without the state incentive, solar buyers only have the federal credit to work with and a solar system from Baker now costs more than $15,000, according to Baker’s numbers. Even those who could afford to purchase the panels wouldn’t break even for 18 years.
“Instead of selling $21,000 systems, the market has shifted towards people with greater means who can afford $60,000 systems that offer a quicker return on investment,” said Epstein.
The expiration of the tax credit “has affected our sales,” Epstein sad. “I think any solar company in the state would say it has. Our residential and light commercial work is down 40 percent.”
Wheeless said that Duke Energy has approximately 4,000 customers who use rooftop solar. But while North Carolina currently ranks third in the nation in installed solar capacity, 93 percent of that capacity comes from utility-scale operations due to the state’s ban on third-party sales.
Conflicting Stances on Renewable Energy
While Duke Energy has fought third-party solar sales in North Carolina and in Florida, it has taken different stances on the practice in other states. In South Carolina, for example, the company actually took part in a compromise agreement that expanded residential solar in the state.
As a result, Baker “is doing significantly more work in South Carolina,” said Epstein. “It saddens me because my company is based in Raleigh, I’ve been here for seven to eight years and employ people who work here. I want to work in North Carolina.”
However, Epstein said several times that Baker has a good relationship with Duke Energy.
