Study: Solar benefits outweigh costs in NC – Greensboro – The Business Journal
An independent study published by a nationally known energy consultant asserts that adding 500 megawatts of solar generation in North Carolina would save utility ratepayers about $26 million annually.
It notes the gains from solar projects — such as lower transmission and distribution costs, avoided emissions, lower losses of electricity in transmission. The study calculates that such benefits outweigh the costs by 30 percent to 40 percent.
The study was prepared by Crossborder Energy of Berkley, Calif. and commissioned by the N.C. Sustainable Energy Association.
It evaluated the impact of 400 megawatts of wholesale solar power in North Carolina and 100 megawatts of distributed generation solar.
Real world test
Wholesale solar involves power sold to utilities through power-purchase agreements with solar developers such as Strata Solar of Chapel Hill. Distributed generation solar is solar “behind the meter,” which means solar projects in which the owner uses the power to offset some of its own demand for electricity and sells excess power to the utility through net metering.
“This study confirms what we are experiencing every day as more and more solar projects are being developed in North Carolina with benefits flowing to local communities,” said Ralph Thompson, chairman of the North Carolina Clean Energy Business Alliance.
The findings could get a real-world test before long. Developers are expected to build 370 megawatts of new solar capacity in the state next year — close to the 400 megawatt wholesale figure — according to projections by industry tracker NPD Solarbuzz.
The progress of distributed generation projects are a little harder to track, although anecdotally solar construction companies see net metering projects on the rise in the state.
The study evaluated solar’s potential in the state using publicly available information. That information includes the Integrated Resource Plans filed by Duke Energy Carolinas, Duke Energy Progress and Dominion North Carolina as well as avoided-cost proceedings before the N.C. Utilities Commission and recent rate cases for the three utilities.
It calculated the costs and benefits of solar projects based on a 15-year life of solar installations.
The study calculates that the utilities' current avoided-cost rates — subject to commission approval — will be 4.5 to 5 cents per kilowatt-hour for current projects over that 15-year window. The avoided costs represent the minimum price utilities must pay independent solar developers for the power they produce from any project rated at 5 megawatts or less. Prices for power from larger projects are negotiated, but the avoided costs remain an important factor in the calculations. Only a handful of projects in the state are larger than 5 megawatts, although several more are slated for construction next year.
Crossborder has completed similar studies this year for California and Arizona, which rank first and second nationally for the amount of solar capacity on their state grids. North Carolina currently ranks fifth, but is expected to pass New Jersey by the end of the year to take fourth place.