The problem in South Carolina? Solar power has largely remained the province of utilities, large businesses and a few wealthy homeowners. The biggest solar project in the state, at Boeing’s plant in North Charleston, for instance, makes up about 65 percent of the entire state’s solar capacity, which tops out around 4 megawatts. Santee Cooper’s largest solar project, located in Myrtle Beach just south of The Sun News, can generate about a third of a megawatt. Compare that to the 26,000 megawatts produced in the state from all energy sources and it becomes clear that the sun isn’t exactly a major part of South Carolina’s energy solution.
Enter third-party solar installers. These businesses work on a rental model in which they lease solar panels to homeowners or churches or schools, rather than selling them outright. In return, the owners can use the solar power generated on top of their roofs, a tradeoff that usually results in lower power bills, enough to cover the rent for the panels. Any extra power generated is sold to the conventional utility.
It’s an innovative business model that would allow nonprofits and homeowners of regular means to afford the often prohibitively expensive solar panels. And it’s a business model that’s working in other states. One study estimated that this solar leasing model will quadruple the residential solar business to a $5.7 billion market by 2016. But companies that have attempted to re-create the idea in South Carolina have run into stiff resistance and as a result have largely abandoned the state.
The powerful state utilities have cried foul, saying that any company attempting to do such work would need to be regulated as a utility, a long, complicated process that effectively prevents these solar businesses from working in South Carolina.
State utilities like Santee Cooper and SCE&G apparently don’t like this threat to their traditional business model. They complain that they could receive less revenue while still being required to provide a backup source of power at night or when it’s rainy, as well as pay for the infrastructure of power lines and meters.
It’s hard to see this complaint, however, as much more than a way to cover the real concern that their electricity services, now in effect state-authorized monopolies, might be opened to real competition, though not even very strong competition. The legislation would limit solar installations to 2 percent of a utility’s peak energy demand, a concession that would minimize the effect on utilities’ bottom lines. On Thursday, Hembree was a bit mystified as to why utilities are fighting the proposal.
“I’m not sure why, because it’s not going to have much of an impact,” he said.
Utilities need to get out of the way and allow solar power to make more inroads in South Carolina, allow consumers the chance to lower their electricity bills, and allow a bit of free market competition in the industry.
Will solar power ever be a major part of South Carolina’s energy plan? Perhaps not. We don’t see traditional power plants disappearing anytime soon. But the sun could and should play a bigger part than it is now. And the legislature has the power to make sure it has that opportunity.