A Look at South Carolina’s Net Metering Rules
September 28, 2022
We know that net metering is an important aspect of solar benefits. And as of over one year ago, the South Carolina state government officially finalized its net metering rules.
So, what’s changed since their implementation? Let’s take a look.
Net Metering: The State’s Basic Changes
At its most basic, net metering is an agreement between utility companies and homeowners who produce their own power via solar panels.
In a state with more than 200 sunny days annually, solar panels are highly likely to produce more energy than a home needs. But rather than let this excess energy go to waste, net metering allows homeowners to sell it to their utility in exchange for solar credits.
In the past, South Carolina homeowners have received a one-to-one credit for their electricity, meaning the state prices the energy produced identically to that of the utility.
For example, if you paid your utility $0.12 per kilowatt-hour (kWh), your excess energy would sell for $0.12 per kWh. Although the one-to-one practice is still in use, the past year’s rules have added a new angle to energy pricing.
[Related: Who Makes the Best Solar Panels?]
The Time-Variable Difference
South Carolina’s Public Service Commission has shifted traditional net metering to a new time-variable approach. This change minimizes public concerns with the process while also allowing homeowners with solar panels to earn credit on excess energy.
The new approach causes the value of excess power to vary depending on the time of day.
When solar power is plentiful, homeowners will receive a smaller credit, but they’ll have fewer payments for any non-solar energy they use. During high-demand periods, the opposite is true. The credit rate will increase, but the cost of energy will increase, too.
Additionally, solar system owners will receive a fixed minimum bill each month that they can’t cover with credit. These actions appear to make net metering fairer, however, many homeowners have expressed that the practice shifts costs to those who can’t afford solar panels.
South Carolina’s Net Metering Cap
The state’s new net metering rules also impose a cap that limits available credit.
One stipulation places the limit at 2% of each utility’s peak electricity demand, as measured over the past five years. Monthly, this cap will limit homeowners’ earnings as a homeowner, although the exact dollar limit will depend on the utility.
[Related: How Going Solar Benefits the Environment and Public Health]
The Future of Net Metering
The future of South Carolina’s net metering rules is unclear.
Since last year’s finalization, these guidelines have satisfied both homeowners with solar who want to earn credits and those without solar who worry about shifting costs.
Legislators expect the policy to remain in effect until May 2029.
[Related: Guide to Federal Solar Power Incentives]
Interested in Going Solar? Contact Freedom Solar
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Give us a call at (800) 504-2337 or complete our contact form for a free consultation.
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