South Carolina Public Service Commission delivers a blow to the solar power industry, slashing solar tariffs to the lost rate in the US.
On November 15 the South Carolina Public Service Commission gave an alarming request to solar industry experts following a very long time of discussion with respect to how the state sets the rate paid to solar facilities. The Energy Freedom Act requires the Commission to level the competition between customary utilities and the sunlight based industry. This time the Commission favored utilities to keep the imposing business model the norm.
This decision undermines the Energy Freedom Act and will have a lasting and devastating effect on the solar industry’s ability to operate in South Carolina.
“We are deeply disappointed by the South Carolina Public Service Commission’s decision to slash rates paid to solar developers. The decision is in direct conflict with what we fought so hard for — fair and transparent solar rates that bring more competition to South Carolina’s monopoly energy sector. This decision sets off a chain reaction that will have lasting effects on the South Carolina market and the industry expects to challenge this decision.â€
Abigail Ross Hopper, President and CEO of the Solar Energy Industries Association
“At a time when neighboring states like Georgia, Florida, North Carolina and Virginia are forging ahead with significant amounts of new solar development, it is disheartening that South Carolina will cease taking advantage of the economic and clean energy benefits that come with additional solar investments. This is clearly not what the General Assembly had in mind when they unanimously adopted the Energy Freedom Act just six short months ago.â€
Bret Sowers, Principal and VP of Southern Current and President of the South Carolina Solar Business Alliance
The decision will establish the lowest solar tariff rates in the nation and one of the most limited agreement terms in the Southeast. The rate is so low that owning and operating a new solar project will become unfeasible in the Dominion territory. Thus, there is a risk that future solar development in Dominion territory could stop, leaving hundreds of millions of taxable investment on the sidelines.
The new Commission-approved rates in Dominion South Carolina are $21.43 per megawatt-hour (MWh) for a 10-year contract. By comparison, investor-owned utilities operating in South Carolina offer different rates and terms for large-scale solar projects in other states.
In Virginia, Dominion Energy recently executed a 20-year solar contract for about $40/MWh. In North Carolina, Duke Energy recently procured solar for $38/MWh with a 20-year contract through their Competitive Procurement of Renewable Energy Program and earlier this year, Georgia Power executed 30-year solar contracts at an average price of $36/MWh.
This week NextEra Energy Resources started operations at the 74.9MW Shaw Creek Solar Energy Center in Aiken, powering customers in South Carolina. Meanwhile, in August, Cypress Creek Renewables and Cubico Sustainable Investments commissioned the 106MW Palmetto Plains PV installation, South Carolina’s largest solar project in operation.
The solar industry plans to fight this seemingly egregious decision in South Carolina and SEIA is working with its member companies to plan next steps.
