Pipeline Plans And Solar Legislation Put NC's Energy Portfolio In Flux

Feb 26, 2018

The proposed Atlantic Coast Pipeline promises to bring huge quantities of cheap natural gas to North Carolina, which could slow growth for solar power.

North Carolina is technically the second largest producer of solar energy in America. N.C. State University Energy Economist Harrison Fell explained the state is capable of running seven percent of the energy grid on solar. But, of course, it's not always sunny.

"In terms of actual generation, only about three percent of our power comes from solar," Fell said. "And so it's still a small sliver of our total generation."

North Carolina's House Bill 589 reduces the length and size of contracts energy utilities need to make with solar producers. Moreover, solar producers are paid based on the rate utilities like Duke Energy would otherwise pay for another fuel source. So, Fell said, as the pipeline makes natural gas cheaper and more plentiful in North Carolina, the value of a renewable energy source to offset it could also drop.

'That could make some of these new projects a little bit less enticing because they're going to potentially get paid at a lower rate," Fell said.

Fell added HB 589 also requires North Carolina to boost the share of renewable energy in its energy portfolio, so the breakdown is still dynamic.

"At the same time, this lower gas is entering the market, solar panel costs continue to fall," he said. "And so you know it's a bit of a race right now between: Will the cost of solar fall fast enough to compensate for some of these less favorable conditions that might come as a result of the pipeline and some of this 589 bill stuff?"

However you slice it,  the cost of energy production is trending downward in North Carolina. If that were the only factor, customers of electricity utilities, like Duke Energy, might have been able to expect cheaper power bills.

"But of course it's not happening in isolation," said Fell. "We've got rate cases going on to help pay for some of the coal ash cleanup, we've got additional solar procurement that Duke Energy has to do, other issues that are also going to effect electricity prices going on at the same time."

Fell outlines North Carolina's dynamic energy portfolio is the latest issue of the N.C. State Economist.