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Around the nation, big utility companies are successfully lobbying lawmakers and regulators to restrict individual and corporate access to solar power, denying people significant savings on electricity bills and the opportunity to take part in the growing green energy economy.

Big utility companies are successfully lobbying lawmakers and regulators to restrict individual and corporate access to solar power. Photo credit: Shutterstock
Big utility companies are successfully lobbying lawmakers and regulators to restrict individual and corporate access to solar power. Photo credit: Shutterstock

In third-party solar financing, a non-utility company installs solar panels on a customer’s property at little or no up-front cost, sometimes selling the solar energy back to the customer at rates typically lower than a utility would charge.

Duke Energy, the largest utility in the U.S., has so far succeeded in keeping third-party solar illegal in North Carolina, but conservative and liberal factions alike are trying to change that, in different ways.

At least four states—Florida, Kentucky, Oklahoma and North Carolina—currently ban third-party sales of solar energy. Twenty states have murky laws and in the remaining 26, companies are allowed to install solar panels on customers’ roofs and sell energy generated from these panels to the customer. But major electric utilities that burn coal or natural gas are ill-equipped to change their business models to accommodate renewables, which explains their frequent opposition to state initiatives that expand solar access.

“When you get fully disrupted, you’ve got to find a new model,” Zach Lyman of the energy consulting firm Reluminati told Rolling Stone. “But utilities are not designed to move to new models; they never were. So they play an obstructionist role.”

Utility monopolies are threatened by rooftop solar for three main reasons:

  • The more rooftop solar installations, the fewer new power plants are built by utilities, which are able to finance these building projects by raising rates on customers and in some states they have a guaranteed rate of return on their investments.
  • Customers with solar panels buy less energy from the grid, operated by the utilities.
  • Utilities often have to pay owners of home solar installations for the surplus energy their panels return to the grid.

While purchasing utility-scale solar farms to increase its profits, Duke Energy—the most powerful political entity in North Carolina—has actively campaigned against solar policies that benefit individuals.

Duke Energy has claimed that rooftop solar hurts the poor by causing rate increases and has even targeted black leaders with this misleading message.

The company opposed the Energy Freedom Act, a bipartisan bill to legalize third-party solar. Although that bill, sponsored by Republican state Rep. John Szoka, died in committee last year, future legislative attempts could face similar opposition from Duke Energy.

Meanwhile, Duke Energy purchased a majority stake in California-based REC Solar, which operates solar projects and sells the energy to commercial customers in other states where third-party sales are legal.

A Conservative Push for Solar Freedom

Rep. Szoka hopes to pass something similar to the Energy Freedom Act next year. Seventy-nine percent of North Carolinians support third-party solar sales, but at least some in the legislature prefer to ignore the citizens’ preference. North Carolina lawmakers have also allowed the state’s solar tax credit to expire.

Rep. Szoka, a mortgage lender, was stationed at the largest military installation in the country, Fort Bragg, during his career as a Lieutenant Colonel in the U.S. Army. Now representing a district that surrounds the city of Fayetteville and includes Fort Bragg, Szoka first spoke of the military’s energy consumption when explaining why he proposed the bill.

Third-party solar sales to the military would save money while increasing energy security, Rep. Szoka argued, noting that on-site power generation would decrease the military’s dependence on the electric grid, which is vulnerable to attacks. Rep. Szoka also says his bill would help the military base to fulfill a Department of Defense mandate that facilities get 25 percent of their energy from renewable sources by 2025.

The state representative says there’s a strong free-market argument for third-party solar. “What made America great is free enterprise,” he says. “We need to unleash entrepreneurs in our state to do what they do best.”

He also cites private property rights, ratepayer savings and job creation as compelling reasons to legalize third-party solar.

Rep. Szoka’s 2015 bill to legalize third-party contracts had wide support from major corporations with business in the state including Wal-Mart, Target, Volvo and Macy’s. These and other businesses wrote a letter to all state legislators, saying that power purchase agreements (third-party sales) would allow them to avoid major up-front expenditures, the risks of operating solar arrays and fluctuating energy rates.

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