The South Carolina House deserves credit for quickly passing legislation to lift a cap on rooftop solar electricity production and to enable residents to be fully compensated for electricity they produce. Now the Senate needs to follow suit, and Gov. Henry McMaster needs to sign the Energy Freedom Act.
The bill, championed by Rep. Peter McCoy, R-Charleston, is a short-term fix that extends for two years “net metering.” That means homeowners with rooftop solar installations get credit for the electricity they produce at the same rate their utility charges. So if a rooftop installation produces $20 worth of electricity in a month, the homeowner gets a $20 credit on his or her bill.
That’s important and just plain fair. But keeping the incentive intact also helps protect about 3,000 jobs in the rooftop solar installation business.
With that issue out of the way, the Public Service Commission would be given two years to come up with regulations for large-scale solar farms to negotiate rates with utilities and for big energy consumers to contract directly with renewable energy providers.
At the end of the two-year period, the PSC would revisit “net metering” and whether to set a cap on rooftop solar production. The Energy Freedom Act also provides for the creation of community solar programs in which lower-income groups can collectively subscribe to renewable energy plans.
The bill also has the support of industrial manufacturers and other major energy users that would benefit from being able to negotiate directly with renewable energy providers.
The legislation rightly clears the most immediate obstacle to the expansion of rooftop systems and sets the state on a course for further integrating solar power into its overall energy budget. Clearly, solar energy has plenty of room to grow in South Carolina. The state gets less than 1 percent of its energy from solar sources, while next-door neighbor North Carolina gets more than 5 percent. South Carolina produces enough solar energy to power about 67,000 homes, and North Carolina produces enough to power about 534,000 homes.
The solar industry also has a demonstrated interest in South Carolina. Charleston-based Palmetto Clean Technology Inc., which sells hardware and software for monitoring solar installations, recently raised $20 million in private equity to expand its operations.
The Energy Freedom Act passed the House unanimously, demonstrating its bipartisan support and broad backing by the solar industry, as well as conservation groups. The legislation is urgent because rooftop net metering is about to hit a 2 percent cap set in 2014, largely because a similar bill was defeated at the last minute last year on a technicality.
“We are running out of time,” Matt Moore of the Palmetto Conservative Solar Coalition said last week after Mr. McCoy’s bill was approved. “The arbitrary cap on solar energy in South Carolina is rapidly approaching and could severely damage the state’s free-market economy.”
Lifting the cap on rooftop solar production is a commonsense way to let homeowners reduce their electricity bills, reduce the state’s reliance on fossil fuel energy production and protect rooftop solar installation jobs while turning over to the PSC some of the technical complications involved in wider solar policies.
Most importantly, South Carolina voters favor solar power and politicians who support renewable energy options. A recent poll found 86 percent of likely voters support the concept of net metering.
The Senate should take those results to heart and send the Energy Freedom Act on to the governor for his signature.
Editor's note: The editorial was revised to reflect the correct data about the amount of solar power produced in South Carolina compared to North Carolina.