The Energy Freedom Act — a sweeping piece of legislation approved earlier this year by lawmakers — will revolutionize consumer choice in South Carolina for years to come, the director of an environmental group said Friday.
But to assure its success, Conservation Voters of South Carolina executive director John Tynan said, members of the state’s utility regulation board need to remain shrewd in crafting policy.
“Now what we see is, individuals without restrictions in the next two years put solar on their roofs without worrying where they are in this cap structure. Past those two years, there will be some guardrails around it the Public Service Commission is going to set,” Tynan said.
The act, which McMaster signed into law on May 16, limits the 10-year minimum contract lengths on solar ventures only to projects currently in the pipeline, with future contracts being customized by the commission.
Other key points of the measure include:
• Removal of all solar net metering and leasing caps
• Prohibiting utilities from setting discriminatory rates for solar users
• Preventing utilities from refusing to connect solar projects to the grid
• Allow direct negotiation between companies and renewable energy providers
• Creation of “neighborhood community solar programs” for low and moderate income residents
“It gives a long-term certainty that this industry can and should be investing and growing in the state. At the larger scale, the independent competitors that might be doing solar farms, I think the scales have shifted as a result of the Energy Freedom Act,” Tynan said.
A 2% solar cap was established in 2014 via Act 236, a sweeping measure that looked to diversify the state’s energy portfolio. Under that legislation, South Carolina’s three largest investor-owned utilities — Duke Energy Progress, Duke Energy Carolinas and South Carolina Electric & Gas Co. — were required to make solar net metering available to customers until the number of systems reached 2% of the previous five-year average of peak demand.
And it worked.
A December analysis by San Francisco-based Energy and Environmental Economics found. The firm was retained by the state Office of Regulatory Staff to gauge the impacts of Act 236. A copy of the report was made public through the Regulation of Public Utilities Review Committee.
“Since the passage of Act 236, the penetration of renewable energy in South Carolina has increased dramatically. The Energy Office reports that installed solar capacity in the state rose from just over 5 megawatts (MW) in July 2015 to nearly 470 MW in July 2018, an increase of over 9,000% in three years,” the report found.
That 2% threshold has been met and in some cases exceeded as utility companies see more and more consumers turning toward solar as an energy option.
In 2018, the solar industry was responsible for 2,829 jobs in the state — a 5% increase from the prior year, according to a recent report by The Solar Foundation, a Washington, D.C.-based nonprofit.
More than 67,000 homes are fed by solar power in the state, with 15,995 installations and a total investment of $963 million.
The Energy Freedom Act was borne out of the multi-billion failure of the V.C. Summer Nuclear Generating Station — partly as a way to give customers more control over their purchasing choices but also to allay fears by would-be investors that the state’s energy sector is too unstable.
“We have a solar industry here, but even though price is dropping and demand is increasing, these free-market principles have collided with South Carolina’s monopoly energy regime — the one exception to the fundamental principles of our capitalist system,” South Carolina Solar Business Alliance marketing director Steffanie Dohn told lawmakers in January. “South Carolina needs a competitive energy market to integrate higher levels of solar power to meet environmental goals, to preserve thousands of jobs and address the changing demands of customers.”
With the legislative work done in getting the Energy Freedom Act codified, Tynan’s organization is turning toward the Public Service Commission — whose rulings will determine the state’s long-term solar viability.
“That’s the next key part, because they’re going to make all of these very long-term decisions as it applies to energy competition in the state, energy rates, these kind of negotiation and contract disputes, so the views they bring and whether they lean very utility-friendly, as they have in the past or very solar friendly as some folks would like to see or whether they take a balanced approach,” he said. “I tend to believe and CVSC tends to believe the state does better when people ask probing questions, and govern and lead from the middle.”