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Duke halves its $100 million plan for solar panels

A state hearing today follows criticism of the original plan as too aggressive, expensive.

By Bruce Henderson
bhenderson@charlotteobserver.com

Duke Energy has cut in half its $100 million plan to place solar-electric panels on hundreds of N.C. rooftops after consumer advocates for the state Utilities Commission called the proposal too aggressive and expensive.

The commission will hold a hearing today on the plan, which Duke altered in a filing late Monday. Customers could see smaller electricity rate increases to pay for solar power if the commission agrees to the modified plan.

Under a 2007 state law, Duke has to use renewable energy sources to generate 12.5 percent of its retail sales by 2021. Solar power has to be a small but growing part of that mix, beginning in 2010.

Under Duke's original proposal, the utility would generate 16 megawatts of electricity by installing solar photovoltaic panels on up to 850 roof and ground sites, most of them at commercial or institutional buildings. The power, enough to supply about 2,600 homes, would feed into the larger power grid.

The Utilities Commission's Public Staff, which represents consumers, objected.

Duke doesn't need the full rooftop plan to meet its solar-power obligations through 2014, the staff said. Duke has already contracted to buy 16 megawatts from a SunEdison solar farm to be built in Davidson County.

The size of the original proposal could also have handicapped development of cheaper forms of renewable energy, the staff said. Duke could “bank” excess solar credits for future years, it said, but miss the chance to generate power more cheaply if solar costs come down as expected.

Industrial electricity customers, and retailer Wal-Mart and grocery chain Kroger, also objected to Duke's plan, saying it would raise their electric rates. Solar advocacy groups complained that it left out non-utility solar power producers, although Duke says it has asked for proposals from solar producers.

Under Duke's revised proposal, said spokeswoman Paige Sheehan, it will spend $50 million over two years to generate eight megawatts from up to 425 solar sites. The reduced plan will also lower expected costs to consumers.

Renewable energy, especially solar, costs more to produce than conventional power produced by coal-fired or nuclear plants. State law allows some of those extra costs – initially up to $10 a year for residential customers – to be passed on to ratepayers.

Duke's original solar-roof plan would have added 34 cents a month to the average residential electric bill, Sheehan said. The smaller version, coupled with changes to state and federal tax credits that benefit Duke, will shrink that to eight cents a month. Commercial customers will pay 42 cents more; industries, $4.25 a month.

The Southern Alliance for Clean Energy, which has fought Duke's expansion of its Cliffside coal plant, said it was disappointed that the solar initiative had been pared.

“While costs continue to come down and the performance of this technology goes up, there has never been a better time for North Carolina to embrace this important renewable energy option,” executive director Stephen Smith said in a statement.

Duke Energy has cut in half its $100 million plan to place solar-electric panels on hundreds of N.C. rooftops after consumer advocates for the state Utilities Commission called the proposal too aggressive and expensive.

The commission will hold a hearing today on the plan, which Duke altered in a filing late Monday. Customers could see smaller electricity rate increases to pay for solar power if the commission agrees to the modified plan.

Under a 2007 state law, Duke has to use renewable energy sources to generate 12.5 percent of its retail sales by 2021. Solar power has to be a small but growing part of that mix, beginning in 2010.

Under Duke's original proposal, the utility would generate 16 megawatts of electricity by installing solar photovoltaic panels on up to 850 roof and ground sites, most of them at commercial or institutional buildings. The power, enough to supply about 2,600 homes, would feed into the larger power grid.

The Utilities Commission's Public Staff, which represents consumers, objected.

Duke doesn't need the full rooftop plan to meet its solar-power obligations through 2014, the staff said. Duke has already contracted to buy 16 megawatts from a SunEdison solar farm to be built in Davidson County.

The size of the original proposal could also have handicapped development of cheaper forms of renewable energy, the staff said. Duke could “bank” excess solar credits for future years, it said, but miss the chance to generate power more cheaply if solar costs come down as expected.

Industrial electricity customers, and retailer Wal-Mart and grocery chain Kroger, also objected to Duke's plan, saying it would raise their electric rates. Solar advocacy groups complained that it left out non-utility solar power producers, although Duke says it has asked for proposals from solar producers.

Under Duke's revised proposal, said spokeswoman Paige Sheehan, it will spend $50 million over two years to generate eight megawatts from up to 425 solar sites. The reduced plan will also lower expected costs to consumers.

Renewable energy, especially solar, costs more to produce than conventional power produced by coal-fired or nuclear plants. State law allows some of those extra costs – initially up to $10 a year for residential customers – to be passed on to ratepayers.

Duke's original solar-roof plan would have added 34 cents a month to the average residential electric bill, Sheehan said. The smaller version, coupled with changes to state and federal tax credits that benefit Duke, will shrink that to eight cents a month. Commercial customers will pay 42 cents more; industries, $4.25 a month.

The Southern Alliance for Clean Energy, which has fought Duke's expansion of its Cliffside coal plant, said it was disappointed that the solar initiative had been pared.

“While costs continue to come down and the performance of this technology goes up, there has never been a better time for North Carolina to embrace this important renewable energy option,” executive director Stephen Smith said in a statement.

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This affects comments on all stories.

Cancel OK

The Charlotte Observer welcomes your comments on news of the day. The more voices engaged in conversation, the better for us all, but do keep it civil. Please refrain from profanity, obscenity, spam, name-calling or attacking others for their views.

Have a news tip? You can send it to a local news editor; email local@charlotteobserver.com to send us your tip - or - consider joining the Public Insight Network and become a source for The Charlotte Observer.

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