Dive Brief:

• The South Carolina legislature on Thursday unanimously passed The Energy Freedom Act, a comprehensive solar bill that will lift the state's 2% cap on net metering, among many other pro-solar actions.

• Urgent need for a comprehensive solar strategy has been growing in South Carolina since Duke Energy Carolina customers hit the 2% net metering cap in July and the bill was supported by utilities and solar developers alike as a way to address increased hunger for solar power in the state

• Tension over PURPA contract lengths was the only thing preventing the bill from gaining support from its final opponent Duke Energy last week. An amendment compromising those terms by setting a minimum 10 year contract length and requiring regulatory approval after that, brought the bill back to the Senate for a concurrence vote.

Dive Insight:

As the demand for solar rises with falling prices, legislation that encourages solar deployment is seen as critical to industry and job growth, even in Republican-majority states like South Carolina.

South Carolina Electric and Gas and Dominion Energy trailed closely behind Duke in hitting their total solar generation capacity caps, putting one-to-one rates and consequently jobs and the solar industry, at risk. 

The bill removes the cap and maintains one-to-one net metering policy for another two years, with a provision that directs the commission to come up with a new net metering structure after that, with utility and other stakeholder involvement under a public docket.

Solar growth in South Carolina boomed so quickly in part because of a movement toward greater emphasis on customer choice after the failed expansion of the V.C. Summer nuclear plant, which left SCANA customers on the hook for $3.5 billion.

"The whole state was questioning, 'Well, why does it have to be this way?'" Bret Sowers, vice president of development and strategy for solar developer Southern Current, who worked closely on the bill, told Utility Dive.

"Customers are now saying, 'Hey, I'm stuck with a higher power bill. I want to find another way to offset that power bill,'" and the natural next step in the state was solar, he said.

The original sponsors of the bill in the House and the Senate were Republicans, with bipartisan cosponsors.

"As far as party lines go, we haven't dealt with that at all in South Carolina. It's been a truly bipartisan issue," said Sowers, adding that solar developers in the state spent a lot of time educating lawmakers about the economic benefits of solar. "At the end of the day, you almost have reverse roles, with South Carolina viewing solar as the free market opportunity in energy policy, and that should fit right into a Republican agenda."

The bill also removes the cap on solar leasing, which placed a limit on how many facilities could be leased under a third party ownership model, and adds provisions to ensure community solar programming is addressing low to middle income customers and widening access to the resource. 

Duke ultimately came on board and joined all the other utilities in the states in supporting the bill. "It is the next step in the right direction for solar policy in South Carolina," ​Duke spokesperson Ryan Mosier told Utility Dive in an email.

Solar advocates also praised the Integrated Resource Planning reform part of the bill, which requires utilities to present multiple resource and cost scenarios to regulators when they file their long term resource plans.

"Those change cases can be a variety of different things," said Sowers. "For instance, one of them could be, what does a utility's plan look like for high renewables? What does it look like if there is federal carbon legislation? What does it look like if you retire all of your coal plants over the next 15 years?"

Greater customer control via a "customer bill of rights" is another smaller, but important piece of the bill, Thad Culley, Vote Solar regional director for the Carolinas and Virginia, told Utility Dive. The provision reflects cost causation, or the marginal change in total costs, and requires utilities to provide usage data to customers.

"The rates should err on the side of giving customers the ability to control their bills," said Culley. "So I think this could lead to a more emphasis on time-of-use rates and things like that across the board."