North Carolina's new net metering policy

If you look at the best solar and renewable energy markets in the U.S., they all have one thing in common: a strong net metering program. Net energy metering – or NEM – allows you to earn credits for any excess solar electricity you send to the grid when your solar panel system generates more than you need. North Carolina has one of the largest solar industries in the United States, ranking fourth in 2022 on SEIA's list of the top solar states by installed megawatt capacity. However, on March 23, 2023, the North Carolina Utilities Commission approved new net metering rules that will lower solar savings for Duke Energy customers.

The changes to net metering in North Carolina are nowhere near as drastic as the recent changes in California but are still anticipated to reduce the average solar shopper's savings by approximately 20 percent. Luckily, residents of North Carolina can lock in current net metering rates through 2026 by deciding to go solar and submitting a completed interconnection application by October 1, 2023. In this article, we'll explain what you need to know about the changes to North Carolina's net metering policy and the steps you need to take now to guarantee the best solar savings.

Do you have solar currently? Were you thinking about going solar soon? You probably have a few questions about how the net metering changes are going to impact you directly. Let's break it down for you:

If you currently have solar…

…nothing is changing—for now. You'll 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 if you were not already on an alternative net metering rate structure. If you are already on an alternative structure, the length of time you will be on the bridge rate is equal to the number of years you were on the alternative net metering rate structure subtracted from 15. There will also be an option to switch to time-of-use (TOU) rates at that time. 

If you are planning on going solar…

… there's no time like the present! If your installer submits your interconnection application by September 30, 2023, you'll be grandfathered into the current net metering plan, which means you'll stay on current rates through September 30, 2027. It is important to note that the approved agreement uses the phrasing "apply for net metering" — to the best of our knowledge, submitting your interconnection application constitutes an application for net metering. In October 2027, you'll be moved to the same bridge rate as current homeowners with solar, or you'll be able to switch to TOU rates. We provide more information on how to lock in current rates below.

If you go solar between October 1, 2023, and September 30, 2027…

…you will not be eligible for the current net metering rates. Homeowners who go solar between October 1, 2023, and September 30, 2027, can choose between the new bridge rate for 15 years (or 15 years minus however many years you have already been on an alternative net metering rate) or TOU rates. Which rate is best for you will depend on the specifics of your system, whether you have battery storage, and other factors (like if you own an electric vehicle!). Starting October 1, 2027, you'll automatically be switched to the new TOU rates.

The proposed bridge rate is subject to caps in participation, measured in megawatts (one megawatt, MW = 1,000 kilowatts, kW). This means that if the cap has already been reached in your utility territory, you'll still be able to install rooftop solar but will only be eligible for the TOU rates or scheduled purchased power:

Total Bridge Rate Capacity

The changes to net metering in North Carolina didn’t happen overnight. The final result comes after years of back and forth between solar advocates and utility company representatives. On March 23, 2023, the North Carolina Utilities Commission (NCUC) issued its final order on the net metering docket, known as "$mart Saver." The original deadline in this order, July 1, 2023, was adjusted to October 1, 2023 out on May 17, 2023 to give Duke Energy more time to develop the online bill calculator that was required as part of this change. For a state with over 8,000 megawatts of solar installed on almost 1,000,000 homes, these new net metering rules will significantly change how current solar customers benefit from net metering.

This new policy goes into effect on October 1, 2023, and applies to electricity customers in Duke Energy service territories, which includes Duke Energy Carolinas and Duke Energy Progress. There is a period of transition time built into the new rules that allow anyone who currently has solar on their home or has a net metering application submitted by the July deadline to take advantage of the current net metering rules through October 2027. Let's dive into how the new changes will impact North Carolina homeowners with solar panel systems:

Higher monthly bills

The new policy establishes monthly minimum bills for all Duke Energy customers participating in net metering. Previously, there was no minimum, and customers with solar could owe $0 on their electric bills some months and even receive credits towards future bills. Under the new net metering rules, the monthly minimum bills will be:

• $22 for Duke Energy Carolinas (DEC) customers

• $28 for Duke Energy Progress (DEP) customers

There are additional non-bypassable charges of $0.36 and $0.44 per kW per month for DEC and DEP, respectively, which will add to the total monthly bill costs as well. (Note: in other states, non-bypassable charges are typically reflected in cents per kWh and are based on how much electricity you use from the grid. North Carolina's new policy bases this instead on how much solar you install, not on how much electricity you use.) 

Decreased savings

Homeowners will see a decrease in long-term savings under the new net metering rules. DEC customers will see an estimated 19 percent decrease in 20-year savings, while DEP customers will see an estimated 17 percent reduction in 20-year savings. Overall, you could miss out on as much as $10,000 in savings over the lifetime of your solar system. 

Increased payback period

The payback period, or the amount of time it takes you to break even on your solar investment, will increase by an estimated 20 percent under the new net metering rules. For the average DEC and DEP customer, this means it will take two to three years longer for your electric bill savings to outweigh the cost of your solar panel system.

Different electricity rates

All net metering customers will eventually be switched to time-of-use (TOU) or critical peak pricing (CPP) rates. Instead of being charged a flat rate for the electricity you pull from the grid (and being compensated at that same rate for the electricity you send to the grid), your electricity will be priced based on how much your utility company is paying for wholesale electricity at that time. This means that your electricity rates will be subject to fluctuations depending on the time of day, day of the week, and month of the year.

Impacts on larger-scale solar

The new rules also add a grid access fee for solar projects larger than 15 kW. The fees are $1.50/kW-month for DEP and $2.05/kW-month for DEC. For reference, a typical residential solar system in North Carolina is 12 kW on the EnergySage Marketplace, meaning these fees likely won't apply to you. But if you're considering solar for your business (which EnergySage can help you with), these fees could add up quickly.

If you've been thinking about going solar, now is the perfect time to get started! By choosing a solar installer and having them submit your net metering application before October 1, 2023, you can lock in three years of better solar net metering rates. Here are the five key steps to get started today:

1. ASAP: decide if you should go solar and get quotes

2. June/July 2023: choose an installer and sign your contract

3. July/August 2023: schedule your site visit

4. October 1, 2023: submit your interconnection application

5. The sooner the better: install your solar energy system

1. Decide if you should go solar and get quotes

The first step to locking in current solar savings is to decide if your home is a good fit for solar. Most important are the specifics of your roof, such as its shading, age, size, material, angle, and orientation. Nine times out of ten, you'll end up saving money by going solar, so as long as your home isn't constantly in the shade, going solar is a great idea!

Next, gather installer quotes so you can compare them for factors like cost, equipment, and reputation – fortunately, the free EnergySage Marketplace makes this easy by collecting quotes for you from our network of vetted installers. To lock in current net metering rates in North Carolina, we recommend having your quotes in hand as soon as possible (our installers usually return quotes within a day of your request).

2. Choose an installer and sign your contract

Now that you have quotes, it's time to choose the best installer for you. EnergySage's mission is to help you decide with confidence: our team of expert Energy Advisors can walk you through your quotes and answer all your questions – for free! Once you've selected an installer, you'll need to sign a contract, and the name on the signed contract must match the name on your utility bill. We recommend signing your contract by early to mid-June to ensure your installer has enough time to prepare and submit all required documentation before the October 1st cutoff date.

3. Schedule a site visit

After signing your contract, you'll need to schedule a site visit with your installer – these can be conducted either in person or virtually (depending on your installer). During this step, an engineer (not a salesperson) will ensure your home is ready for your new solar energy system. They'll check your roof and the electrical panel and decide if any update needs to be made before you go solar. 

Based on the site visit, your installer will create a single-line diagram, or SLD (a basic electrical drawing of the system), and a scope of work packet. The date of your site visit is a bit more flexible (especially if it's virtual), but we recommend completing it by mid-June in case any last-minute changes are needed.

4. Submit your interconnection application

While your installer will be the one to submit your interconnection application, you'll need to be involved in the process. In North Carolina, this includes:

• A $200 nonrefundable application processing fee

• The single-line diagram created by your installer

• Proof of insurance liability coverage

• A report of proposed construction filed with the North Carolina Utilities Commission 

Double-check that your property address and name are the same on every document. Your installer needs to submit this full application before October 1st at 5 pm EST.

5. Install your solar energy system

Your installer has successfully submitted your interconnection application on time – now what's the next step? There are several tasks your installer will be completing at this point, including acquiring a building permit, obtaining equipment, completing the installation itself, and receiving permission to operate. You'll need to decide how you want to finance your system – either with cash or with one of the many great solar loan products available. The sooner you get your system set up, the better: once your system is installed and interconnected, you're ready to start saving with your new solar energy system while being compensated for what you export to the grid!

The benefits that differentiate EnergySage are more important now than ever. Here's why millions of people look to EnergySage for support going solar:

• Quick, simple quote comparison: EnergySage takes the guesswork out of going solar. We gather custom solar quotes for your home from reputable installers in your area, presenting the data transparently online so you can compare your options from the comfort of your couch. And the best part? It's entirely free for you to use!

• Expertise: we have a team of unbiased solar experts who consistently update our site based on the latest, verifiable information about net metering changes and the state of the North Carolina solar industry.

• Energy Advisors: when you get quotes through the EnergySage Marketplace, we'll connect you with an independent Energy Advisor who can walk you through your quotes and answer your questions – without pushy sales tactics.

• Transparency: we provide transparency around our quotes and pricing so you can make the decision that fits your needs at the right price. 

• Consumer protection: we pre-vet all of the installers in our Marketplace before we let them join, so you won't have to worry about any fly-by-night installers when you get quotes through us. 

EnergySage also helps connect you with qualified installers to ensure you get the right price for the right system for your home. As more people look to install solar before the October 1st deadline, there are increased risks to solar shoppers. Make sure to look out for the following: 

• Misinformation: if your installer is telling you information about net metering changes in North Carolina that doesn't align with what you're reading on EnergySage or other trusted sources, they may be trying to mislead you, or they may not understand the complexities of the situation.

• Aggressive sales tactics: installing solar is a big financial decision – you should feel ready and confident making this decision, not pushed into it. Don't feel pressured! Get all of the information you need so you understand just how much time you have to make your decision. 

• Extremely high prices: in most industries, prices spike when demand surges. It’s reasonable to expect that will be true in the North Carolina solar market too. If you receive multiple quotes and one seems abnormally high, the installer could be trying to take advantage of your urgency to go solar before the deadline in October.

• Bad actors: there's a potential for installers to take your deposit and signed contract with no intention of ever installing your system; this is why it's more important than ever to choose an installer with a proven track record. 

What is the difference between the net metering changes in North Carolina and California?

The changes to net metering in North Carolina will not have as large of an impact on solar savings as the California changes. The estimated solar savings loss for North Carolina solar owners is approximately 20 percent, while the newly implemented California policy lowered savings by up to 60 percent. However, before the deadline (which has already passed), California solar shoppers could lock in current net metering rates for up to 20 years, while the North Carolina transition period is only through September 30, 2027.

Has the NCUC approved the $mart Saver net metering policy changes?

Yes, as of March 23, 2023, the North Carolina Utilities Commission has approved the $mart Saver net metering plan.

How long until the North Carolina net metering changes go into effect?

The net metering changes in North Carolina will go into effect as of October 1, 2023. Current customers and anyone who submit a net metering application before that date will have until October 1, 2027, to take advantage of the current net metering rules.

Installing a solar energy system can feel overwhelming, but EnergySage is here to make it simple. Get free quotes through the EnergySage Marketplace, and compare quotes from only prescreened, reputable solar installers. If you have any questions along the way, we'll provide you with tools and resources and access to a free Energy Advisor to walk you through the process so you can go solar with confidence.