N.C. utilities thinking big with solar power
By Bruce Henderson
Charlotte (N.C.) Observer
CHARLOTTE, N.C. — Thousands of panels are soaking up the winter sunshine as Duke Energy launches its solar rooftops program under North Carolina's new green energy law.
For the first time, Duke and Raleigh-based Progress Energy will have to make a smidgen of their electricity this year from the sun.
Energy from other renewable fuels, such as wind, wood wastes and chicken manure, will join the mix in two years. Renewables have to account for 12.5 percent of utility retail sales by 2021.
Renewable-energy mandates like North Carolina's, the first in the Southeast and one of 29 nationwide, won't save consumers money. Duke will add 16 cents a month to residential customers' bills to cover its costs.
Advocates say their value is in prodding utilities and smaller operators to invest in power that pollutes less than the coal that fuels much of the state, leaves no radioactive waste and taps free energy.
Large-scale solar is making its debut across the Piedmont.
Duke's panels are going up atop a Childress Klein Properties industrial building in Charlotte, National Gypsum's wallboard plant in Mount Holly, a Food Lion distribution center in Salisbury and an industrial building in Greensboro. All will be online by April.
Duke will announce more commercial, industrial and residential rooftop sites as the year unfolds. The $50 million program will make 8 megawatts of solar power, enough to supply about 1,300 homes.
Construction is also under way on one of the nation's biggest solar farms, a land-based installation in Davidson County, 50 miles northeast of Charlotte.
Its owner, Maryland-based SunEdison, will sell Duke the 16-megawatt output. The first phase went online Christmas week. SunEdison is also under contract with Progress Energy for a smaller solar farm in Wilmington.
Large-scale solar power hasn't previously gotten traction in the Carolinas, despite abundant sunshine, because it's expensive to produce and operates only about 20 percent of the time.
Solar produced less than 1 percent of the nation's electricity this year and has grown little since the 1990s, the Energy Information Administration says.
Wind power, by contrast, produced about 2 percent of U.S. energy but has nearly doubled since 2007.
Duke probably would not be heavily investing in N.C. solar without the green energy mandate, said renewable energy chief Owen Smith. But the company is warming to the technology.
"Solar is probably the piece of the renewables requirements that we feel like we have the best handle on," Smith said. "We've received (more than 65) solar proposals from various developers, and costs over the last 12 months have declined."
Companies that generate solar power also are growing innovative, he added, in how they site projects and take advantages of tax credits and stimulus money.
Duke can reap federal tax credits for 30 percent of its investment, and accelerated depreciation, whether the utility makes its own solar power or buys it. North Carolina awards tax credits worth 35 percent of the investment and excuses property taxes on 80 percent of the property's value.
Steve Kalland, director of the N.C. Solar Center, said the marketing clout and public profile of the nation's third-largest utility will give solar power new credibility.
"There's also the concept that a rising tide lifts all ships," he said of the effect on smaller solar companies.
Duke expects to have no problem hitting this year's solar-power target of about 9 megawatts.
In addition to its rooftops program and SunEdison agreement, Duke will buy credits — proxies for solar power — from two Asheville-area firms, FLS Energy and Vanir Energy. It also plans to buy solar credits out of the state.
Power tools whirred last week as workers labored under a cold, gray sky to install 2,314 solar panels on a Childress Klein Properties building on Reames Road.
As it did with the three other sites announced so far, Duke leases the rooftop and owns the solar array. Its 532 kilowatts won't power the building, instead connecting directly to the electrical grid.
Childress Klein, a real estate company, hasn't invested directly in solar power because it would take years to recoup the money. But the firm proposed three buildings for Duke's rooftops program to help avoid the need to build more power plants.
"We just decided it would be a good way to get our toe in the water," said Chris Daly, a partner in the company's industrial division.
The sites were picked because of their ready access to the grid and potential for making solar power. Apart from modest leasing fees, the companies who agreed to host the solar arrays say they will benefit from solar power's green aura.
Food Lion, which prides itself on energy efficiency, volunteered as a low-cost way to explore energy alternatives. Among them is whether the supermarket chain could expand use of solar power in its 1,300 stores.
National Gypsum's 400,000-square-foot plant makes recycled-content wallboard from gypsum, a byproduct of pollution controls at Duke's power plants. The solar panels on the roof, said spokeswoman Nancy Spurlock, "just add to the fact that it is a green process."