By R. Taylor Speer
With the unanimous passing of the Energy Freedom Act in the South Carolina House of Representatives in February, our state is closer to a watershed moment for clean energy. As tide and temperature rise, the Senate now votes whether to protect 3,000 solar jobs in South Carolina; give ratepayers a bill of rights; and require utilities to plan for and report on introducing renewable energy onto their grids.
Lawmakers were not intended to get their hands dirty. As the two-percent net-metering cap loomed, stakeholders of Act 236 (“A236”) – the state’s first renewable energy law – convened again years later to draft a second compromise bill for the General Assembly. Notwithstanding good intentions and hard work, negotiations impassed without the necessary follow-up to A236. The players were ready to act though, and after one of the first ever hearings before the newly-formed energy caucus in Columbia, the Energy Freedom Act (“H3659”) passed the House and is currently on the Senate floor.
The importance of H3659 is best understood in context. Utilities in South Carolina exchange regulation for guaranteed profit. Solar can hardly compete in such a unique market without A236. The law requires utilities to provide net-metering, which measures generation from rooftop solar, just as traditional meters measure consumption. This data provides the basis for utilities to pay for the surplus energy homeowners and businesses generate from rooftop arrays. Without this two-way street, solar cannot be scaled because it is too expensive for the average owner. The law also provides certainty for developers of large-scale solar by implementing standards for the connection of solar farms to the grid. Without these important standards, capital investments in big solar projects – the same ones that measurably reduce carbon – are too risky so the money dries up.
Just as A236 gives solar a fighting chance in a regulated monopoly, it also caps growth. The mandate after all was a compromise between industry, commerce and the environment – a tall order. Duke Energy already hit these caps and SCE&G (soon to be Dominion Energy) will follow in next month. H3659 lifts these restrictions, just in time, by eliminating the net-metering cap until 2021 and requiring important grid-connection standards for even higher capacity solar farms. Importantly, H3659 will also provide better terms to utility-scale developers because the bill forces utilities to report on how they calculate the price they pay to purchase energy from solar farms and other renewable sources. This way the bill ensures that clean energy remains competitive in a market that is not otherwise constrained by traditional supply and demand.
Most Greenville ratepayers are Duke Energy customers and therefore did not feel the sting of the VC Summer fiasco directly. H3659 addresses it statewide by allowing the Public Service Commission to require an independent audit of big utility projects like the construction of new plants. Important for clean energy, the bill requires utilities to report to the Public Service Commission how they are working with renewables and energy efficiency solutions and how they plan to incorporate their value onto the grid. Our utilities have been reluctant to comment publicly on the elephant in the room. This bill forces them to consider and communicate with regulators about the relative costs and efficacy of emerging renewable technologies, including battery storage. While all the focus seems to be on net-metering, this sleeper mandate could be a heavy hitter for a long term policy shift towards clean energy in South Carolina.
The future of clean energy in South Carolina hangs on the Senate’s consideration of H3659. It needs to pass. Please contact your legislatures to support this important law. If successful, lawmakers move to work on other important energy issues in the state. South Carolina needs to provide nonprofits and municipalities the same incentives that taxable entities like residents and businesses take advantage of while implementing renewable energy into their portfolios. And maybe, just maybe, the General Assembly will follow the lead of many other states and mandate a minimum clean generation requirement for South Carolina.
Taylor Speer is a lawyer at Turner Padget Graham and Laney, where he co-chairs the firm’s energy practice and serves Greenville residents on the Energy and Buildings subcommittee of the Green Ribbon Advisory Committee.