How Net Metering Works in North Carolina
January 24, 2024
According to the Solar Energy Industries Association (SEIA), North Carolina currently ranks 4th in the nation in solar installation capacity, just behind Florida, California, and Texas. This is a meteoric rise from the 15th position it held in 2022. So, what is driving the rapid adoption of solar power in North Carolina?
Solar energy, once considered a costly venture, has now become significantly more affordable, with the cost of solar panels nearly halving in recent years. In addition, federal tax incentives up to 30%, courtesy of the renewed Inflation Reduction Act and North Carolina solar incentives like the Property Tax Abatement for Solar Electric Systems1, are making residential solar more accessible than ever in North Carolina.
On top of the wealth of incentives and rebates, the state also offers a generous net metering program of up to one megawatt of energy – enough to power not only a residential solar system but also many large-scale projects as well.
Let’s take a look at how you can harness the power of the sun to save on utility bills and gain grid independence.
Net Metering Basics
Net metering, as it sounds, is a calculation of your solar system’s power used against what may be surplus and sent back to the local electrical grid.
How does this work? The energy generation of your solar panels hinges on the amount of available sunlight – in North Carolina, that means a hefty 213 sunny days a year. With this abundance of sunlight, solar photovoltaic (PV) systems usually hit their peak production around midday, leaving a surplus of solar generated power.
Through net metering programs with your local electricity utility, this surplus solar power can earn you credits that offset your electricity bill and save you money in the long run, as well as contribute to greener energy use!
Essentially, the net metering process looks like this:
- The electricity utility measures your surplus solar generation using a revenue grade meter that supports bidirectional monitoring.
- Credits from surplus solar energy are subtracted from your monthly electricity bill.
- For months where solar generation is higher than your consumption, the difference is rolled over to the following month.
Does North Carolina Allow Net Metering?
Yes, North Carolina not only allows net metering but also has a generous cap on system generation. This allows you to “sell” excess energy back to the grid in exchange for lowering your future electric bills! For example, if you have a rooftop solar system, it will likely generate more electricity than is needed during the day. If you are part of a net metered program, the electricity meter will provide a credit against the electricity consumed in the evening.
There are a few stipulations unique to North Carolina’s net metering programs. Rather than rolling over infinitely, accumulated solar credit balances do expire in this state.
North Carolina can also accommodate leased solar systems, which can participate in net metering at a lower rate.
Which Electricity Utilities Offer Net Metering in North Carolina?
Solar customers of Duke Energy Progress and Duke Energy Carolinas are able to enroll in a Bridge Rate Plan or the Residential Solar Choice Plan.
It is important to note the structures for compensating solar energy in North Carolina can differ greatly across municipalities and cooperative utility territories. Use the Southern Environmental Law Center’s Rates of Solar web tool3 to get current information on what your electricity utility offers.
The current infrastructure for net metering will hold until 2027, when the NC Utilities Commission is set to revisit net metering rate structures in regulated utility territories.
2023 Changes to North Carolina’s Net Metering Policies
There have recently been some changes in Duke Energy’s net metering plan, which went into effect in July of 2023.2
Since 2000, the state of North Carolina has offered full retail net metering. This means that any excess energy that your solar system generates is credited back to your utility bill at the utility’s full retail rate of electricity, and at the end of a billing period, any net excess generation (NEG) credits a solar customer holds must be surrendered to the electricity company without compensation. With full retail net metering, Duke Energy’s customers in North Carolina were able to eliminate almost their entire electricity bill and recoup their investment in solar in around ten years.
What Changes Were Made to Duke Energy’s Net Metering Program?
From July 1, 2023, customers of Duke Energy Carolinas and Duke Energy Progress will no longer be able to benefit from full-retail net metering. They will instead have the option to choose either the temporary Bridge Rate plan or the Residential Solar Choice plan.
The Bridge Rate Plan
Effective from October 1, 2023, the Bridge Rate plan functions as an interim solution between the current net metering plan and the forthcoming Residential Solar Choice plan. Post-2027, the Residential Solar Choice will become the sole option for homeowners who opt for solar energy.
Residential Solar Choice
Residential Solar Choice is the program that Bridge Rate will transition to in 2027, which will replace the existing net metering system. The program includes an upfront rebate program for those eligible, monthly netting of electricity imports and exports, and time-of-use rates (TOU) to incentivize electricity management. The latter involves changing electricity rates during peak times of the day.
It’s important to note that there are several key differences among net metering, the Bridge Rate, and the Residential Solar Choice plan. These differences include the obligatory time of use rates (TOU)5, additional charges, and minimum monthly bill requirements.
What This Means for North Carolina Solar Customers
If you currently have solar in North Carolina, you’ll be able to stay on your existing net metering plan through October 1, 2027, after which you will be moved to a Bridge Rate for the following 15 years. There will also be an option to switch to time-of-use (TOU) rates at that time under the Residential Solar Choice program.4
Is Going Solar in North Carolina Still Worth It?
Solar is a worthy investment with or without a net metering program. Adopting renewable energy in your home means independence from fluctuating electricity prices, backup power on demand (if you have solar storage), and a lower carbon footprint.
North Carolina’s generous incentive and rebate plans that the state offers, from the Property Tax Abatement for Solar Electric Systems to supporting loans like the Piedmont Electric Member Corporation Renewable6 and Solar Energy Loan Program, make going solar an easier choice than ever.
On top of generous rebates, tax incentives, and loans, a solid net metering policy in a state with abundant sunshine gives solar panel owners full retail credit for any excess electricity they export back to the grid.
Be most powerful with Freedom Solar Power. Let our local team of energy consultants guide you on the net metering and incentives programs available in your area. Contact us today for a free consultation.