Dominion Energy and the South Carolina solar industry are at odds over how much money homeowners and businesses should pay for the utility after installing panels and creating their own electricity.
The two sides are expected to face off at a hearing before the SC Public Service Commission in late February, which will decide how much the company can charge new solar customers in its service territory, which covers areas around Charleston, Columbia , Beaufort, Orangeburg and Aiken.
Dominion, which acquired South Carolina Electric & Gas in early 2019, is proposing several changes that would increase the monthly costs that solar customers pay to connect to the dealership’s power grid.
The energy giant, based in Richmond, Virginia, also wants to change the way solar customers are credited for the excess energy they produce and returned to their lines.
These changes will not immediately affect Dominion’s approximately 11,200 current solar customers. They will be able to maintain their current pricing agreement until 2025 or 2029, depending on when they first installed their panels.
However, this will affect any Dominion customer who installs new solar panels after June 1.
Keller Kissam, president of electrical operations for Dominion in South Carolina, said the utility supports the expansion of solar energy across the state. But the changes, he said, are necessary to ensure that this market segment is paying its fair share for the maintenance and operation of Dominion’s electrical system.
“That is the crux of the matter,” said Kissam last week.
Power play?
Some of the companies that make money by installing panels in homes and businesses in South Carolina are backing down. They describe the proposed changes as an awkward attempt to kill the industry and contain competition. The additional fees Dominion wants to add, they said, will make it difficult to convince homeowners and companies to invest in solar energy in the future.
One of the main reasons for choosing solar energy as an alternative energy source is to reduce electricity bills. The decision comes down to mathematics. Home and business owners generally expect the economy to help them pay their initial installation costs.
That financial calculation could be disorganized if Dominion gets what he wants, several advocacy groups and solar companies told the Public Service Commission.
“We are deeply disappointed that Dominion continues to advocate for policies that harm domestic solar energy and takes away decision-making so people can choose their own power,” said Tyson Grinstead, director of policies for Southeast Sunrun, a company California-based publicly traded company that provides rooftop solar power to homeowners in more than 20 states. “We expect the Public Service Commission to consider the benefits of customer choice and domestic solar energy in its decision on Dominion’s anti-solar proposal.”
According to the proposed pricing structure, the fixed cost that Dominion charges solar customers would increase significantly. For homeowners who buy or rent solar panels, the monthly cost would increase from $ 9 to $ 19. The charge for businesses would increase to $ 32.50.
The company also wants to add a “solar subscription” fee that would be calculated based on the number and size of the solar panels that customers install.
Under this proposal, homeowners would pay an additional $ 5.40 for each kilowatt of energy that their panels are capable of producing. The companies would see their prices rise by $ 6.50 per kilowatt.
On average, a residential solar panel in the U.S. can generate about 5 kilowatts, according to previous reports by the Solar Energy Industries Association. This means that these owners would pay an extra $ 27 per month under the subscription fee.
Alder Energy, a Charleston-based company that installs panels for companies, called the fee plan and the way Dominion wants to credit solar customers “outrageous”, “disastrous” and “industry destructive”.
Alder CEO Donald Zimmerman told PSC that most commercial or industrial customers want to recover their investment in their panels in less than eight years. But with the new charges Dominion is seeking, the payback period would be much longer, he said.
“Only one conclusion can be drawn: Dominion intends to punish companies that want to generate their own electricity,” Zimmerman told the commission in a written statement.
Balancing act
The dispute between Dominion and the solar companies stems from a 2019 law passed by the SC Legislature.
This law suspended the number of advanced users who could install panels in South Carolina. It also required PSC regulators to review the business relationship between for-profit utilities in the state and their solar customers.
As part of this review, lawmakers instructed the commission to make sure that any increase in the use of solar energy does not push costs further for other public service contributors.
Kissam, the Dominion executive, said that is exactly what the company is trying to address now. The extra revenue he is asking for is needed to ensure that solar customers contribute to the costs of maintaining power lines, utility poles and generating stations, he said.
The money will also help cover other expenses, such as a new Dominion group created to help manage the fluctuating amounts of electricity that flow into the grid each day from small roof panels and large arrays on an industrial scale. The more solar energy connected to the Dominion system, the more difficult and expensive it becomes to balance the electricity supply, Kissam said.
“Solar is a good thing to have in our system. It’s good. I appreciate it,” said Kissam. “But understand: my job is to coordinate this in our system in a safe and reliable way. That’s what this is about.”
Supporters of solar energy agree that state law required the PSC to determine how to allocate costs fairly between solar and non-solar customers. They also point out that lawmakers intended with this bill to expand the use of solar energy on roofs and increase the market for renewable energy. That won’t happen if Dominion gets what he wants, they said.
The commission is due to issue its decision on April 5.