Net Metering

Note: HB 589, signed in July 2017, included several provisions related to net metering. Among these, each Investor-Owned Utility must file revised net metering rates with the North Carolina Utilities Commission (NCUC). According to HB 589, the rates must be nondiscriminatory and established only after an investigation of the costs and benefits of customer-sited generation. Further, the new rates must ensure that net metering customers pay their full fixed cost of service, which may include fixed monthly energy and demand charges. Until the new rates are in place, customers may enter into a utility's existing net metering tariffs, which are detailed below. Customers who own their systems and are net metering under a utility's existing net metering tariff may opt to remain on those tariffs until January 1, 2027.  

The North Carolina Utilities Commission (NCUC) established net metering rules for the state’s three investor-owned utilities -- Duke Energy, Progress Energy and Dominion North Carolina Power -- in 2005. The NCUC subsequently amended the rules, most recently in 2009. The NCUC will be working to meet the new requirements established by HB 589 of 2017.  

Eligibility and Availability 

Net metering is available to all customers who own and operate systems that generate electricity using solar energy, wind energy, hydropower, ocean or wave energy, biomass resources, combined heat and power (CHP) which uses waste heat derived from eligible renewable resources, or hydrogen derived from eligible renewable resources.* Customers may net meter under any available rate schedule. However, customers that choose to take service under any tariff other than a time-of-use demand (TOUD) tariff must surrender to the utility all renewable energy credits (RECs) associated with the customer’s generation – with no compensation for the customer.

The individual system capacity limit is one megawatt (MW). There is no aggregate capacity limit on net-metered systems. For residential systems up to 20 kilowatts (kW) and non-residential systems up to 100 kW in capacity, utilities may not charge any standby charges or any additional metering charges other than those charged to customers who do not net meter under the applicable rate schedule. For larger systems, utilities are allowed to impose standby charges consistent with approved standby rates applicable to other customer-owned generation.

Net Excess Generation

In general, any customer net excess generation (NEG) during a billing period is carried forward to the following billing period at the utility’s full retail rate, and then surrendered to the utility – with no compensation for the customer – at the beginning of each summer billing season. However, the treatment of generation and NEG for customers on TOU-demand tariffs is more complicated. For these customers, on-peak generation is used to offset on-peak consumption, and off-peak generation is used to offset off-peak consumption. Any remaining on-peak generation is then used to offset off-peak consumption. Off-peak generation may only be used to offset off-peak consumption.

Utilities must file with the NCUC annual reports indicating the number of net-metering applicants and customer-generators, the aggregate capacity of net-metered generation, the size and types of renewable-energy systems, the amounts of on-peak and off-peak generation credited and ultimately granted to the utility, and the reasons for any rejections or removals of customer-generators from a net-metering arrangement.

Community Solar

HB 589 requires Duke Energy Carolinas and Duke Energy Progress to file plans for a community solar program with the NCUC. A community solar facility must have at least five subscribers, with no single subscriber owning more than 40% interest in the project. Unlike customer-sited systems, subscribers to a community solar project will not participate in net metering (i.e. they will not be credited at the retail rate under a utility's existing net metering tariffs or under the new net metering rates that will be determined by the NCUC). Instead, subscribers to a community solar project will be credited at the avoided cost rate for all the electricity produced by their share of the project. Community solar will not be available to retail customers until the NCUC approves the plans submitted by the utilities. 

Solar Leases  

HB 589 authorizes solar leases in the service territory of Duke Energy Progress and Duke Energy Carolinas, and any municipal utility that opted into providing solar leases to its customers. The bill also authorizes the Duke Energy Progress, Duke Energy Carolinas and municipal utilities to offer solar leases to their customers, though any costs associated with the offering cannot be recouped through rates. HB 589 also includes a number of requirements for companies offering solar leases, including necessary contractual provisions between the company and the customer, disclosure requirements, and record-keeping requirements. Before any company can offer solar leases, they must first obtain a specific certificate from the NCUC. 

* In July 2006, the NCUC extended net metering to eligible systems with battery storage. "Gaming” a net-metering arrangement by using battery storage to manipulate a TOU tariff is not allowed.