Turner Padget Insights

Solar Developers, Landowners See Bright Future in South Carolina with New Renewable Energy Law

Posted On June 14, 2019

When the South Carolina Energy Freedom Act was signed into law in May 2019, dark clouds that loomed over the state’s solar industry turned to clear skies for renewable energy growth, promising numerous benefits for homeowners, businesses, landowners and independent power producers.

Rooftop solar is revived

The new law is a ray of hope for the 3,000 solar industry jobs in South Carolina. Many of the rooftop solar installers holding these jobs pulled out of the state or were shuttering their doors because investor-owned utilities such as Duke Energy and South Carolina Electric & Gas (now Dominion Energy) were no longer providing “net metering.” This service allows businesses and homeowners who own rooftop solar arrays to get credit for the excess electricity they produce from their arrays. By the time the new law was signed, South Carolina utilities already had provided customers the maximum amount of net metering required by the old law (2% of average peak electricity demand). Instead of continuing net metering voluntarily, utilities cut the service entirely. While new solar customers still could take advantage of state and federal tax credits, this critical economic driver of rooftop solar ended abruptly. The new law saves solar jobs by requiring utilities to provide net metering until 2021 and mandating that the Public Service Commission regulate net meeting after 2021.

Solar farms get a lift

The outlook is equally sunny for investment in utility-scale solar. The new law provides better terms to independent power producers that build solar farms and sell the energy they generate. This power typically is sold under power purchase agreements to the state’s big three utilities – Duke Power, Dominion Energy and Santee Cooper. The new law regulates these agreements and requires the PSC to approve standard and commercially reasonably terms both for the purchase of this power and for its connection to the grid. Reflecting a major change in state policy, the law also requires utilities to justify the price they pay for electricity generated from solar farms in PSC hearings. This transparency will level the playing field by giving utility-scale developers a clearer picture of the return they will achieve in building a new solar farm.

These measures give greater certainty to the industry and will arm solar developers with less risk when applying for financing to capitalize these expensive construction projects. In that way, the law opens energy markets by ensuring fair market access for developers of utility-scale solar projects.

Ratepayers get a watchdog

In today’s climate of rising energy costs, the renewable energy law is also a step forward for consumers. South Carolina residents paid more for energy per home in 2016 that any other state, combining the sixth highest usage per capita and the 19th highest prices, according to the U.S. Energy information Administration. That is due in part to the rate hikes required to pay for the failed Virgil C. Summer Nuclear Generating Station. The new law protects consumers in South Carolina by creating greater oversight over the construction of new power plants and giving ratepayers a bill of rights that requires utilities to offer pricing designed to lower costs and reduce waste.

Turner Padget attorneys represent solar installers and developers in PSC hearings and in transactions with utilities and landowners. We also provide counsel for landowners being courted by the solar industry. We prepare all the paperwork and review the power purchase agreements between you, developers and the utility.

Renewable energy has many benefits, and the Energy Freedom Act is an important step in tapping into the resources that brighten South Carolinians’ economic future.

R. Taylor Speer is an attorney at Turner Padget, where he focuses on business, commercial and employment litigation. He has extensive trial experience, with a career representing clients in matters common to the formation, growth and dissolution of small to medium-sized businesses. He may be reached at (864) 552-4618 or by email at tspeer@turnerpadget.com.