What should homeowners with solar panels pay for electricity? That's the question lawmakers hope to answer with a pair of dueling bills.
South Carolina's solar sector was one of the nation’s fastest-growing last year, according to industry figures released last week. In just four years, the state has gone from generating essentially no solar power to being named the nation's No. 18 producer.
To the companies that install solar panels, that's proof positive that renewable energy is popular and the state should let more of them onto the grid. And, they say, solar users should keep getting credit for every kilowatt they produce at the same rate they would pay for power from their utilities.
To their opponents, the expansion shows that the solar industry doesn't need the state's help to keep growing. They want solar users to be credited at a lower rate than they are now, arguing that they should still chip in to pay for the transmission lines and power plants they depend on when the sun's not out.
The competing viewpoints will collide this week on the floor of the South Carolina House, where representatives will consider a pair of proposals that will dictate the industry's future.
Both are ostensibly intended to keep solar power growing in South Carolina. But the dueling pieces of legislation have split the House, driving a wedge between two of the chamber's most powerful legislative committees.
The bill supported by the solar companies is being championed by lawmakers on the House Judiciary Committee, including Rep. Peter McCoy, R-Charleston, and Rep. James Smith, a Columbia Democrat who is running for governor.
The alternative is sponsored by lawmakers on the Labor Commerce and Industry Committee, including Rep. Bill Sandifer, R-Seneca, and Rep. Mike Forrester, R-Spartanburg. Both of those lawmakers have a long history of working with the power companies, and for years they've helped select the state's utility regulators who are meant to hold the utilities in check.
Sandifer and Forrester did not return several phone calls seeking comment.
The solar issue needs to be resolved soon. South Carolina is hurtling toward a limit on solar subsidies that the Legislature set in 2014: Once 2 percent of the state's electricity is supplied by solar panels on homes and businesses, the power companies will stop crediting new users at the higher rate.
The first utility expected to hit its cap — a Duke Energy subsidiary in the Upstate — is on track to reach that point in the next few months. South Carolina Electric & Gas expects to reach that mark next year. The net-metering law doesn't apply to state-owned Santee Cooper or the electric cooperatives that buy its power.
Both of the bills would remove the cap on solar-generated power. But they take divergent paths when it comes to how much credit homeowners and businesses get for that electricity.
The proposal backed by the solar industry would essentially leave the credit structure the way it is now, other than a new $250 connection fee for utilities: Homeowners would get one kilowatt-hour of credit for every kilowatt-hour they produce, a process known as net-metering.
That's important because people are often at work while their solar panels are generating electricity and come home when they're not.
The utilities don't like that plan. Duke Energy, for instance, says it supported higher credits to get the solar industry off the ground. But the power company, which sells electricity from the Upstate to the Pee Dee, says homeowners shouldn't be paid more for the power they generate than large-scale solar farms.
"This is not about utilities protecting profits. It's about having a fair system, paying private solar customers the same, competitive price we pay for other solar energy, instead of above-market rates that result in higher costs for all customers," Duke spokesman Ryan Mosier said. "Having others bankroll the lucrative earnings of the rooftop solar industry is not the answer."
SCE&G, for its part, said it thinks the solar industry-backed plan is unfair to electric ratepayers who don't have their own panels. It hasn't taken a position on the alternative plan, saying that lawmakers should follow a process that "would take a look at the needs of all stakeholders and would fairly address cost shifts and the needs of the state."
The Sandifer and Forrester plan suggests that homeowners should only earn the equivalent of the cost that the power companies avoid because of their solar systems. Utilities stand to save money on new power plants and transmission lines, for instance.
Proponents of the "avoided cost" plan say that one-to-one credits force other ratepayers to subsidize the upkeep of the electric grid. Their argument is that solar users still depend on the poles and wires that bring electricity to their homes and the plants that pump it out.
Solar backers say the cost to other ratepayers is exceedingly low. They cite, for instance, a federal Energy Department study that found the impact on electric rates to remain "negligible" as long as solar makes up a fraction of power generation.
They also say that changing South Carolina's solar policy now would imperil a young industry that employs nearly 3,000 workers.
"It's a nascent industry. You've got to have consistency to grow it," said James Koehler, vice president of energy markets and policy for Charleston-based Palmetto, a solar installer. "They would kill it off if they did not give us a clear path forward and stay consistent."
The utility-favored plan doesn't specify how the avoided costs would be calculated. An earlier version of the bill would have ended the net-metering program outright.
Lawmakers opposing the utility-backed legislation blame Sandifer and Forrester for catering to the utilities. They've also criticized them for fast-tracking the bill through the committee process in less than a week.
"Chairman Sandifer's bill was written by utilities, for utilities, and represents an antiquated view of our state's electricity needs," said Rep. Nathan Ballentine, R-Chapin, who previously challenged Sandifer for the top post on the Labor Commerce and Industry Committee. "It's simply an effort by 'big power' to keep profits high and keep competition out."
Duke and SCE&G say they weren't involved in drafting the legislation.
Smith, the Democratic candidate for governor, said additional rooftop solar capacity will limit the need for utilities to build new power stations, like the gas-fired plant that SCANA floated to utility regulators this month.
"The utilities' whole financial model is based on building new power plants, and that may not be in the best interest of our state," Smith said.
The timing of the solar issue dovetails with a fiery debate over the future of South Carolina's energy sector in the wake of the state's failed nuclear project.
Lawmakers have been consumed this year with questions about how to reform utility regulations and how much ratepayers should pay for the abandoned, $9 billion expansion of the V.C. Summer Nuclear Station. The Legislature changed state law to help finance the project, which resulted in a pair of unfinished reactors north of Columbia.
Legislators likewise spurred the state's solar boom by opening the doors to the industry in 2014. That's when the state first required net-metering.
The Solar Energy Industry Association, a trade group, said solar panels now represent more than 500 megawatts of capacity in South Carolina, enough to power over 55,000 homes. That number is expected to double this year.
If the industry projections bear out, the state will end the year with more than 1,100 megawatts of solar capacity — the equivalent of about one nuclear reactor.