Create free market for solar energy

April 5, 2014 by  
Filed under Green Energy News

A bill that would generate competition for electric utilities by opening South Carolina to solar leasing companies should be written as broadly as possible to give more people the opportunity to access solar energy.

The bill drew early praise from legislators, utilities and pro-solar groups, but then took some heat from solar companies who said it gave a distinct advantage to major utilities such as Duke Energy. The objections have come largely from out of state “rooftop” solar companies that lease solar panels to homeowners. Those concerns merit a close watching.

If a bill that is designed to create competition is to be effective it cannot create advantages for any segment of the market. That includes the regulated utilities.

The objection advocates raised is that the bill in essence would have allowed Duke to create a monopoly on rooftop solar before other companies are allowed to enter the market. Advocates say the bill would have given utilities a chance to opt in to the solar program; if they did they would have been required to power 1 percent of their capacity via solar energy and only then would solar leasing companies have been allowed to enter the market, Bryan Miller, president of the Alliance for Solar Choice, said in an interview.

Advocates of the bill said on Wednesday that an amendment to the bill addresses those concerns and would ensure that utility investments in solar are in line with the competitive free market, according to a report by Greenville News reporter Nathaniel Cary. The proposal passed the Senate Judiciary Committee by a 19-1 vote.

A free-market where leasing companies are on equal footing with existing companies would potentially offer consumers a greater benefit, especially at a time when utility rates are increasing for a variety of reasons.

Under the bill, companies would have to seek approval from the state’s Office of Regulatory Services before they could begin leasing solar panels in South Carolina, according to the report. Although that is not necessarily the case in other states, it’s not an unreasonable compromise. In addition, utilities such as Duke would compete on even footing with the leasing companies because they would have to create a nonregulated business arm that would have to compete for business, Bruce Wood, a Greenville-based solar advocate and owner of SunStore Solar, said in the newspaper report.

Rooftop solar leasing companies let private citizens access solar energy that otherwise could be cost-prohibitive. Under the business model, companies put solar panels on a consumer’s roof, and then lease the panels to them while charging them for the electricity they generate, usually for a price that’s less than traditional utilities charge, Miller said.

Solar power will not on its own meet the power needs of this state. However, the expansion of solar — and other forms of renewable energy — should be encouraged. The more electricity that individuals can generate on their own, especially during peak energy use periods such as the hottest of South Carolina’s dog days, the less investment utilities would have to make in expensive energy plants needed to boost production during periods of peak use.

Also, the more options consumers have, the lower prices generally are as businesses vie for customers. The most difficult problem with the way electricity is provided now is that utilities enjoy a monopoly. The consumers’ interests are supposed to be protected by regulatory agencies such as the Public Service Commission.

South Carolina ratepayers know all too well about the trend in electricity rates. Duke Energy has raised its residential electricity rates by nearly 30 percent over the last five years. Much of that cost has been the result of meeting increased federal environmental regulation; some of it has come as the utility has added capacity. Additional capacity from direct competition for residential users could mitigate both of those pressures on rates.

As lawmakers move this bill forward they need to ensure the interests of existing utilities are not protected at the expense of free enterprise, especially given the advantages that the free market can create for consumers.

These are issues that need to be openly discussed, and proposals in South Carolina should be compared to what is working and what is not working in other states. Certainly lawmakers should err on the side of encouraging solar leasing companies to compete in a free market in South Carolina and should not give economic advantage to existing electricity providers.

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