When South Carolina’s Distributed Energy Resource Program Act was signed into law in June 2014, Duke Energy, Duke Progress Energy, and SCE&G formulated programs of their own designed to promote the development of distributed energy resources within their service areas in the state. To encourage early adopters, these utilities have introduced a set of rebates, including one for commercial customers that have the space on-site to install rooftop or ground-mounted solar solutions. And now that Third-Party Financing is available in South Carolina for the first time ever, businesses can implement solar projects without upfront costs. To learn more about how you can access the savings that solar energy can provide for your business, read this blog and its downloadable Q&A Document.
This Blog provides insight into what these local utilities can do for you, what solar savings can do for your bottom line, and how you can implement a project with no upfront costs.
If the biggest driver of solar investment for South Carolina businesses has been the appeal of using renewable resources to lower energy costs, then its biggest drawback has been the lengthy wait before seeing a return on that upfront investment.
Savvy businesses, however, are finding such investment to be less of a hurdle than it once was. As technologies improve and more providers enter the market, the cost of photovoltaic (PV) solar installations continues to decrease. Moreover, many third-party financiers and local utilities are supporting investments in alternative power systems by providing financing solutions that can dramatically decrease or eliminate the upfront investment.
In South Carolina, two utilities are expanding solar installations in response to the state’s Distributed Energy Resource Program Act, signed into law in June 2014 to “promote the establishment of a reliable, efficient, and diversified portfolio of distributed energy resource for the State.” Duke Energy (NYSE: DUK) and South Carolina Electric & Gas Co. (SCE&G) are looking to provide options to promote early adoption of these alternative energy generation solutions.
Duke Provides Limited On- and Off-Site Options
Duke Energy and Duke Progress Energy have set aggressive goals for solar investment. The company hopes to grow its renewable footprint in South Carolina from less than 2 megawatts (MW) today to at least 110 MW — and potentially 170 MW — by 2021. To reach this goal, the company is offering programs promoting both utility-scale solar as well as on-site rooftop or ground-mounted installations. Because these investment opportunities are limited, early adoption is crucial for businesses that want to reap the benefits of long-term energy savings starting today.
“The collaborative vision to bring solar to South Carolina is now becoming a reality to the benefit of our customers, communities and the state,” says Clark Gillespy, Duke Energy President – South Carolina. Gillsepy adds, “We see South Carolina becoming a leader in the adoption of new solar.”
The first step in establishing this leadership is a set of rebates, including one for non-residential customers that have the space to install PV panels on-site. For those qualified businesses that install (or have installed since Jan. 1, 2015) new rooftop or ground-mounted solar systems up to 1 MW-ac, Duke is offering a rebate of $1/W-dc. A business customer that installs 500 kW, for example, could earn back $500,000.
In addition, customers that net-meter their systems can take advantage of an additional incentive: A 1:1 retail credit for any excess energy produced from their solar installation through 2025.
However, many parties with the room for installing PV panels find the necessary upfront investment daunting. Those customers may discover solar leasing from a third-party financier a better fit. Solar leasing — now available in South Carolina for the first time ever — is the only option that enables businesses to benefit from both the rebate and net metering savings without any upfront costs for the system.
In addition to customer-sited program, Duke issued a request for proposals (RFP) for 53 MW of utility-scale solar capacity to be in-service in its South Carolina service area by the end of 2016. According to information from Duke, the RFP gives bidders the flexibility to compete for contracts directly with the utility.
For customers without the room for an on-site installation, Duke is seeking up to 5 MW of solar capacity for its Shared Solar Program that is expected to be issued in 2016. This offer would allow multiple customers to subscribe to the output of a specific solar facility (yet to be installed) and share in the economic benefits.
Both the customer-sited and Shared Solar programs help South Carolina customers get the cost savings of solar power generation without the upfront investment in equipment otherwise required.
SCE&G Offers Options for Customer and Community
SCE&G is likewise pursuing a variety of options to meet the needs of customers in central and southern South Carolina. The utility is seeking to add approximately 100 MW of new solar energy to its system by the end of 2020.
“We are excited to add more renewable energy capacity to our system,” says John Raftery, General Manager of Renewable Products/Services and Energy Demand Management for SCE&G. Raftery adds that the company is “committed to providing our customers with additional solar options and to developing renewable energy resources that benefit the entire state.”
SCE&G’s plan includes options for customer-sited systems, community solar and utility-scale investments.
To promote the adoption of solar energy at the customer-sited level, SCE&G has proposed production-based incentive rates for customers who install solar generation on their property. These incentivized amounts are determined by system size and production at a predetermined rate for 10 years.
Customers who install PV panels are able to sell their excess power to the utility for a predetermined amount that is higher than their current rate. Called the “Bill Credit Agreement,” the incentive serves both taxable and tax-exempt entities and the sell-all rates range from 14-22 cents, depending on which SCE&G Tariff supplies your facility.
The Bill Credit Agreement, coupled with a solar lease, provides the customer with a generous payment for the solar energy, with no money required upfront to install the system.
On the utility-scale, SCE&G is aiming to add at least 30 MW of new utility-scale Solar to its system before the end of 2016. Like Duke, the utility is seeking proposals for utility scale systems through a competitive bid process.
For customers without the capability to install solar on-site, a Community Solar program would allow customers, including municipalities and tax-exempt organizations, the opportunity to buy into a solar farm and receive prorated, incentivized production credits based on the farm’s monthly system output.
Incentive to Act Now
These efforts to meet the state’s Distributed Energy Resource Program Act are aggressive by nature in order to entice early adopters. These offers are available on a first-come, first-serve basis, and while additional benefits are likely to be rolled out in the future, the utilities hold the power to decrease the incentive amounts as more solar installations are implemented. As a result, first movers will see the greatest savings from their solar installations. And with availability of third-party financing solutions, those savings have the potential to be great indeed.
“Third-party financing enables businesses to move solar projects forward without capital expenditure or upfront costs,” said Michael Wright, EVP Strategic Marketing of Empower Energies. “This gives those businesses access to significant and predictable savings for decades, starting on day one. Plus, it frees up their budgets for other priorities. This is all available for the very first time in South Carolina right now.”
Over the last decade, the US has seen the opening of a dozen new solar markets. And it is the early incentives that help spur the desired growth. The customers who educate themselves and execute first will be able to access all the incentives and lock-in the greatest savings.
Solar is certainly here to stay in South Carolina, but the incentives used to prime the market will likely be of shorter duration.
Now is the time to apply for this brand new program! Ask Empower Energies how to go about it. Contact Empower by clicking here.
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