Solar Battle Continues In North Carolina As Nonprofit Fights Duke Energy

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In one of the remaining four states that explicitly ban third-party solar sales, a small nonprofit is continuing its fight against the nationโ€™s biggest utility over the right to sell solar power to churches and other nonprofits without the utilityโ€™sย 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 theyโ€™d have to pay a utility company, making residential solar more affordable and thus more accessible forย customers.

The energy giantโ€™s lost profits from NC WARNโ€™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 asย $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 anย 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 affordableย 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 Dukeย Energy.

โ€œDuke Energy obviously sought the unprecedented penalty in order to stifle NC WARN in various fights against the corporate behemoth,โ€ wrote NC WARN Executive Director Jim Warren in aย 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 itsย customers.

But without third-party sales, โ€œthereโ€™s no good way for churches, synagogues, town halls or schools to get clean energy if they want it right now because they canโ€™t take the tax credit,โ€ Jason Epstein, Executive Vice President and General Manager of Baker, toldย DeSmog.

He said that beginning with โ€œa model that deals with nonprofitsโ€ would be best, at first, so as not to โ€œopen up the spigot all at once.โ€ Then the state could roll out residential third-party sales once the market isย established.

Solar installers such as Baker would definitely get on board if third-party solar ever becomes legal in North Carolina. โ€œIf thatโ€™s an option available weโ€™d team up with financing teams. Of course,โ€ saidย Epstein.

Bakerโ€™s former โ€œsample purchase and payback modelโ€ (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 theย credit.

Without the state incentive, solar buyers only have the federal credit to work with, and a solar system from Baker now costs over $15,000, according to Bakerโ€™s numbers. Even those who could afford to purchase the panels wouldnโ€™t break even for 18ย years.

โ€œInstead 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,โ€ saidย Epstein.

The expiration of the tax credit โ€œhas affected our sales,โ€ Epstein sad. โ€œI think any solar company in the state would say it has. Our residential and light commercial work is down 40ย percent.โ€

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 stateโ€™s ban on third-partyย sales.

Conflicting Stances On Renewableย 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 theย state.

As a result, Baker โ€œis doing significantly more work in South Carolina,โ€ said Epstein. โ€œIt saddens me because my company is based in Raleigh, Iโ€™ve been here for seven to eight years and employ people who work here. I want to work in Northย Carolina.โ€

However, Epstein said several times that Baker has a good relationship with Dukeย Energy.

Wheeless told DeSmog he wants stakeholders in North Carolina to get together, as they did in South Carolina, to discuss a wide range of solar options, and that just focusing on third-party sales is a nonstarter, something he has said previously to theย media.

Warren said this line is โ€œa recipe for delay. It came [first] at a time where Duke was clearly very concerned about third-party sales. They were spending a lot of money on lobbyists to try to beat back that Energy Freedom Act [of 2015],โ€ which would have legalized third-partyย sales.

Duke also purchased a majority stake in REC Solar last year, which makes money from third-party solar sales in California and Hawaii, states that permit these agreements and where Duke Energy does not directlyย operate.

Despite holding back residential solar in some states, Duke Energy, Wheeless said, is โ€œabsolutelyโ€ concerned about environmental pollution. He said the company has invested $4 billion in wind and solar across 13 states and has โ€œretired about 40 coal units in the past five or six years.โ€ But Duke has replaced these coal plants with natural gas facilities, and natural gas contributes large amounts of methane, a greenhouse gas far more potent than carbon, into theย atmosphere.

Duke wants to build up to 15 new natural gas plants in North and South Carolina alone, and NC WARN is challenging them on this, too. Duke will likely acquire Charlotte-based Piedmont Natural Gas as it hopes to pipe gas 554 miles from West Virginia, through Virginia, and into eastern Northย Carolina.

โ€œWe believe natural gas is going to be the backbone of energy generation going forward,โ€ said Duke President and CEO Lynnย Good.

When DeSmog asked Wheeless about the dangerous methane that comes from natural gas, he had no direct response, only citing Duke Energyโ€™s work with โ€œhog operations to capture that methane and burn it at our own plants, taking out harmfulย emissions.โ€

In contrast, Warren said, โ€œThe people on this planet are in a world of hurt and we need to be expanding solar and cutting emissions as fast as weย can.โ€

Duke Energy plans to invest $3 billion in renewables over the next five years. โ€œWe donโ€™t have an absolute [percent of total output] targetโ€ for renewable energy over those years, said Wheeless, โ€œbut we feel like we know where weโ€™reย going.โ€

Yet Duke does have a target for solar, wind and biomass energy for 2029: โ€œa measly 4 percent,โ€ as Greenpeaceโ€™s Monica Embrey describedย it.

Keeping Up Theย Pressure

Warren and NC WARN have no plans to relent in their campaign against the big polluter, Dukeย Energy.

โ€œItโ€™s hard to say if weโ€™ll win our appeal,โ€ said Warren. โ€œWe feel strongly that this project is in accord with the state constitution, which prohibits monopolies, but also state policy that promotes the expansion of renewableย energyโ€ฆ

โ€œWe want to clarify that Duke doesnโ€™t get to lock off these rooftops and prevent competition, especially when youโ€™ve got an industry that wants to be involved with upfront solar in this state.โ€

Image credit: NCย Warn

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Alex Kotch is an independent investigative journalist based in Brooklyn, NY. His stories about politics, the environment, education and social justice have appeared at AlterNet, DeSmogBlog, Salon, The American Prospect, BillMoyers.com, Truthout, Truthdig, Raw Story, National Memo, Facing South, EcoWatch, Vocativ and The Brooklyn Rail. He has made TV and radio appearances on RT, The Thom Hartmann Show, The Real News Network, Time Warner Cable News and Georgia Public Broadcasting. His research and reporting have been featured in The New York Times, Esquire, The Atlantic, National Journal, Jacobin, Media Matters, and Harvard Political Review, among othersย publications.

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