Growth & Development

Solar Energy in S.C. Rare, Highly Regulated

Senate Bill Would Open Solar Market

By Corey Hutchins
Tuesday, April 9, 2013
It is illegal to buy solar energy in South Carolina from an entity that is not legally deemed a utility. File photo

Take a train through Germany and you’ll see sleek black solar panels along the railroad tracks and dotting the rooftops of hillside barns and houses. Last year, the notoriously gray and overcast western European country generated 22 percent of its energy from renewable sources such as the sun.

Here in sunny South Carolina, solar power is rare. There’s a reason for that.

In this state, it is illegal to buy solar energy from an entity that is not legally deemed a utility. What that means is if a company wants to install a solar panel on the roof of a house or a commercial building and sell electricity to the resident or the business it must be regulated just as if were SCE&G, Duke Energy or another juggernaut in the industry.

In Germany — and other states in the U.S. where solar energy flourishes — that is not the case.

So perhaps it wasn’t a surprise that when lawmakers here introduced a bill to change that, large utility companies in South Carolina pushed back. Utilities here are asking lawmakers to hold off on solar legislation.

In February, a bill that would make it legal to buy solar energy from non-utilities died in a House subcommittee. The lower chamber is dominated by right-wing conservatives generally sympathetic to the will of big corporations and industry. And large utilities here have long sowed the field of legislative campaign coffers with money, on both sides of the aisle.

But proponents of a solar energy future for South Carolina have hopes for a new bill recently introduced in the Senate with bipartisan support. The Energy System Freedom of Ownership Act would allow third-party financiers to operate here without being regulated as a utility. 

Installing a solar panel on the roof of your house or business is expensive, which is why not many do it in South Carolina under the current conditions. But if a third-party company paid for the installation, leased you the panels, and sold you the electricity the panels generated, it could be a feasible model that could benefit both the consumer and the company that financed it. These third-party companies can collect federal tax incentives and deductions for investment in solar power, according to proponents of the new law.

Grant Reeves, senior vice president of The InterTech Group, a large Charleston-based holding company, says third-party solar financing is an attractive business model that he’d like to get in on.

“It seemed like it made a lot of sense to allow individuals to access solar if they would like to because the investment on the front end is more than a lot of people can afford,” he says. “Solar is one of the fastest-growing industries in the country and South Carolina is missing out on that.”

Residential solar financing could be a $5.7 billion industry by 2016, according to Green Tech Media. Several other states already have it.

There are businesses in South Carolina that have installed solar panels themselves, says Hamilton Davis, energy and climate director of the Coastal Conservation League. But they’ve had to individually negotiate with their power company for what return they’ll receive on their power savings, he says.

So Half-Moon Outfitters, which has a solar panel tree in its Columbia parking lot, is likely getting a different percentage rate than Boeing, which has a 10-acre solar field on the roof of its North Charleston production plant.

“There’s no certainty there for the price you’re ultimately going to get from the utility,” Davis says.

Third-party financing for solar power would change that. Not surprisingly, utility companies in South Carolina are asking lawmakers not to move too quickly, and to study the issue more.

“The only opposition that I’m aware of is from utility companies,” says the bill’s sponsor, Sen. Greg Gregory, a Lancaster Republican.
In a statement, SCE&G spokesman Robert Yanity said the utility believes “it would be prudent to ensure that our state’s lawmakers thoroughly understand the implications that any proposed legislation might have for the electric system that all South Carolina residents and businesses rely on.” Because of the complexity of the issue, he said, “South Carolina’s State Regulation of Public Utilities Review Committee voted to authorize its Energy Advisory Council to study and report back on the solar panel leasing issue. We look forward to hearing the results.”

That’s essentially what Gregory says he’s heard from utility lobbyists: Hold off, wait for a report. He doesn’t think it’s necessary.

“I think that ground’s already been plowed in lots of other states,” Gregory says. “In the Northeast, Southwest and the West, this is growing exponentially.”

Yanity says SCE&G is a “strong supporter of solar power,” and pointed to its partnership with Boeing, which SCE&G says is the largest single rooftop solar installation in the Southeast in terms of production capacity.

Grant Reeves of The InterTech Group says the Palmetto State can’t afford to wait. Federal tax credits and incentives run out in 2016, he says, and he’s worried if the Legislature doesn’t act this year the state could lose out on the window to have a third-party financing renewable energy industry.

Right now, The InterTech Group has bids out in Georgia for two solar farm projects, and should know this week whether it got the contracts.

“That’s money that could be invested in South Carolina,” Reeves says. “It will be invested in Georgia.”

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