The Rev. Nelson Johnson found it strange that in recent months, three different people approached him in his professional capacity about an issue that seemingly didn’t have much to do with religion.
They wanted to talk about solar energy.
Several proposed changes in solar energy law await action in the General Assembly’s current …
“Their concern was for black people not to be exploited by the solar initiative,” said Johnson, the pastor of Faith Community Church on Arlington Street with a largely African American congregation. “It was the argument that solar was going to be rapidly developed by people who have the money to install solar.”
Other less-affluent folks, a group made up disproportionately of African Americans, would be part of a dwindling customer base left behind to pay much higher rates for power provided the old-fashioned way from a traditional utility, they argued.
Johnson didn’t see it that way, he said last week, especially after learning that at least one of his visitors was a consultant for Duke Energy.
Greensboro's Faith Community Church and a North Carolina group that advocates for solar energy joined forces today to test state rules for the deployment and financing of such rooftop power systems.
And now his church is the middleman in a frontal assault on statewide rules that make it more difficult for homeowners, small businesses, churches and others to go solar.
It’s the latest chapter in a solar industry saga in which North Carolina soars above other states in many categories of solar deployment linked to large-scale commercial power projects, but paradoxically it lags in dispersing this burgeoning technology onto rooftops throughout its cities and rural areas.
The Arlington Street church’s sin against the established power grid stems from who it wants as a solar partner. Johnson and his congregation want to buy power directly from a nonprofit group that has installed a new, 5.2-kilowatt solar array on the church’s roof — in violation of state rules that only allow Duke Energy and other regulated utilities to sell electricity at retail rates.
No third-party sales
North Carolina remains one of a handful of states with such rules. And the congregation is joining with its nonprofit partner, the Durham-based NC WARN energy activist group, to challenge the rules because they make it harder for a people of limited means to afford rooftop solar arrays — individually owned solar units that usually serve houses and other smaller buildings.
The aim of such so-called third-party sales is to make solar installation easier on the pocketbook — the church’s new system cost about $20,000 — by allowing the buyer to pay for it over time by purchasing the power the solar system produces from the company that installed it.
The Greensboro case likely will unfold before the N.C. Utilities Commission during the next few months, Duke Energy plans on petitioning the Utilities Commission to invalidate the church’s purchase arrangement with NC WARN, company spokesman Randy Wheeless said.
Nevertheless, the utility will go ahead soon to activate the church’s new solar array near downtown Greensboro by connecting it to the statewide power grid with a special metering device, Wheeless said.
“We have an issue with something else, not the church,” Wheeless said.
NC WARN is pursuing the contract with the Greensboro church as a test case before the Utilities Commission, whose members are appointed by the governor. The activist group has said it will simply give the solar equipment to the local congregation if it ultimately loses its appeal. Duke Energy officials cited that as a factor last week in explaining why they are willing to connect the church’s solar array to the grid before the Utilities Commission rules.
Recent publicity at the national level suggested that utilities nationwide have embarked on a campaign to persuade lower-income minority groups that solar power is good for the well-heeled but bad for them, an effort supposedly underwritten at least partly by wealthy conservative activists Charles and David Koch. Duke Energy does not have any such organized effort underway to turn African American and other minority leaders against solar power, Wheeless said.
“There’s no campaign,” he said. “We definitely will talk with anybody about our feelings. ... If you have a mass defection of people who can afford (solar), obviously the fixed costs of the grid would get spread out to a small group of customers.”
Johnson, the Faith Community Church pastor, disagrees. More competition will make solar energy more widely available at better prices, ultimately cutting the cost of electricity for everybody, he said.
Duke Energy is far from confronting any sort of mass defection to solar energy, Wheeless noted, adding that of the utility’s 3.2 million customers in North Carolina, only about 2,300 also have solar equipment. But what Faith Community Church and NC WARN want to do poses risks that can’t be ignored if their precedent were to be approved and spread statewide, he said.
“The way it’s being proposed here, there’s really no consumer protection,” Wheeless said. “You’re unleashing something to where customers may be taken advantage of.”
As a regulated utility, Duke Energy has to serve all comers on equal terms, he said. Taken to its extreme, the NC WARN-Faith Community proposal would allow solar providers to work with only those they favor on terms they dictate, he said.
The larger debate showcases the tug-of-war between established utility practices in North Carolina and new norms made possible by a solar industry that has grown steadily in North Carolina under a series of tax incentives and mandates that stretch back nearly a decade.
Those laws require Duke Energy to steadily increase the percentage of power it generates from solar, wind and other sources of renewable energy to a maximum of 12.5 percent in 2021.
Duke Energy has been doing that by investing in large-scale solar farms and buying power under long-term contracts with the developers of such farms. Several solar farms exist in the Triad region, but other parts of the state have many more.
Duke generates about 6 percent of its power from renewable sources nowadays, primarily solar, and is on track to hit 9 percent in about two years, Wheeless said.
Current laws also provide generous tax incentives for people who install solar energy systems on their roofs, but they still leave the cost of solar power a stretch for many people, even though prices for the required photo-voltaic panels have been dropping steadily in recent years.
Meanwhile, in the past five years, North Carolina has emerged as the South’s No. 1 producer of electricity from solar power. Last year alone, businesses and individuals across the state installed 397 megawatts of solar electric power, second in the nation behind California. At least 177 companies work in various parts of North Carolina’s solar industry, employing about 5,600 people.
“That’s across the board, from mom-and-pop solar installers to large manufacturing companies,” said Sean Gallagher, the vice president of state affairs for the Solar Energy Industries Association, a national trade group.
‘Sense of pride’
At the local level, it’s a rewarding business to pursue because it provides a service that benefits both people and the environment, said Doug Granger, the owner of DG Solar of Greensboro.
“When we get down from a roof for the last time on an installation, we all have a sense of pride in the work because we’ve done something good for the customer, for the environment and for our long-term energy supplies,” said Granger, whose company deals both in solar electric systems and solar-powered water heaters for homes and pools.
But some industry advocates say business could be even better for such companies as Granger’s if North Carolina relaxed its prohibition on third-party sales of electricity, such as the agreement between NC WARN and the Greensboro church.
Both the trade group’s Gallagher and Brian Lips of the Raleigh-based N.C. Clean Energy Technology Center noted that the state stands out because so much of its sun-powered electricity comes from large-scale solar farms that sell their power to Duke Energy and other regulated utilities.
“Almost all the capacity that we see in North Carolina is at the utility-scale level,” Lips said. “Most of these are owned by big solar developers that sell their electricity to the utility.
“Many of these facilities are on the order of 5,000 kilowatts,” he said, about 1,000 times larger than the array perched atop Faith Community Church’s roof near downtown.
Proponents see the promise of solar energy as liberating consumers from the monopoly grip that large utilities such as Duke Energy have on electricity. Distributing solar panels widely on rooftops across the state could drastically cut the need to keep building massive power plants that spread pollution, said Jim Warren, NC WARN’s executive director.
Decarbonizing the state
Duke Energy’s business model revolves instead, Warren said, around paying lip service to solar energy but emphasizing the construction of more fossil-fuel plants that build a case for rate increases to line corporate coffers.
“Their model is build plants, raise rates and amass corporate influence over regulators and officeholders,” Warren said.
The utility invests most heavily in fossil-fuel plants when more emphasis on rooftop solar, as well as solar farms and wind energy, “could help us decarbonize this state at a really critical time,” he said.
Wheeless counters that the utility has spent $4 billion on solar power in North Carolina and elsewhere since 2007 and that it plans to spend $3 billion more on solar projects in the next five years. The utility already buys solar power from about 600 providers across North Carolina, he said.
Solar power is great, he, said, but right now it costs more to produce than traditional sources and it only operates “about 20 percent of the time at full power.”
“You need (traditional) plants because we are using power overnight and when its cloudy or raining,” solar panels aren’t producing power, Wheeless said.
Similarly, buildings with solar panels need to be linked to the larger grid that provides power to them when the sun isn’t shining, he said. Duke Energy sells energy to solar-powered homes and businesses at those times and buys the excess whenever the solar-energy system produces more electricity than its building needs.
The state mainly encourages rooftop solar systems with a generous tax break. The tax incentive allows those who add solar power to a home or other building to deduct as much as 35 percent of a system’s cost from their taxes, and the federal government allows 30 percent as well.
Granger said the first thing he wants to know about a prospective customer is whether their roof gets enough sun, but the second is whether the person pays taxes because the tax break makes the purchase much more feasible.
“If you don’t have a tax bill, you’re not going to get that benefit,” he said.
At tax-exempt Faith Community Church, Johnson and his congregation can’t reap any benefit from that type of payback. But they do need to watch the budget and they know the NC WARN deal is a good one on the bottom line, Johnson said.
“We’ve worked out a contract, we know what we’ll be paying and it’s less than what we’re paying now,” he said. “And it will make a small contribution to reducing the carbon footprint.”
Johnson was pleased to learn that Duke Energy plans to install equipment soon to activate the solar array atop the church. He wished that already had been accomplished, he said, because it was an especially sunny afternoon.
“The Lord is blessing us,” he said. “But right now we don’t have a cup to put it in.”