Editorial: Solar power leasing, a good idea with potential

  • Wednesday, April 3, 2013

When you turn on a light switch you expect a dark room to brighten.
But where does that power come from? Well, usually it comes from a coal-fired power plant that adds pollutants to our air and water.
A clean alternative to coal-fired plants is solar energy, but the upfront costs for installation of solar panels, estimated at $20,000 to $30,000 for the average house, keep many homeowners and businesses from going in that direction.
Now there is an alternative that several states, including Colorado and California, are already trying — solar power leasing, which is also called third-party solar energy financing.
This alternative method, which this newspaper believes is a good idea with potential, allows private companies to pay for the installation of solar panels on homes or businesses and lease the equipment.
This is similar to a business leasing a copy machine and paying a monthly fee instead of buying it outright.
Just as the company would pay for the consumables like paper and ink, a homeowner or business with leased solar panels would pay a fee for the power generated by the panels.
And, if the solar panels generate more power than is needed, the utility would buy the excess power.
The problem is, according to state law, only utility companies can sell energy.
Since the early 1970s, utilities in South Carolina— Duke Energy, SCE&G, Santee Cooper and a host of electric cooperatives — have exclusive rights to serve customers within their assigned territories, which makes them essentially monopolies sanctioned by the state.
A bill being reviewed in the state legislature could change that, allowing third-party solar energy financing with a cap of two percent per year.
S.C. House Bill 3425, The Energy System Freedom of Ownership Act, was introduced earlier this year, but stalled in the House.
The Senate companion bill, S 536, was introduced March 19 with 14 bipartisan senators supporting it.
According to the Coastal Conservation League, which is in favor of this bill, South Carolina should allow limited third party electricity sales:
n to provide average utility customers with the freedom and ability to produce their own electricity for little or no upfront cost
n to provide immediate savings for utility customers on their electricity bills
n to protect utility customers from rising electricity rates
n to inject a healthy, yet limited amount of free market competition into the current monopolistic system
South Carolina utilities are calling for study and caution before any legislation is passed to make sure there are no implications on the reliability of the system.
Hamilton Davis, energy and climate director for the Coastal Conservation League, said the bill will not negatively affect the ability of utilities to operate with a profit since alternative energy accounts for less than 1/10 of one percent of energy use in South Carolina.
Even if solar power were to suddenly become wildly popular, the bill caps the maximum solar energy sales at two percent, he stated.
Also, costs for electricity are growing at a rapid rate, increasing 1.4 percent during 2012, according to the U.S. Energy Information Administration (IEA).
The EIA expects U.S. retail residential electricity prices will grow by 1.9 percent in 2013 and by 1.8 percent in 2014.
In light of this growth, the two percent maximum added from solar power will be insignificant.
Another positive aspect of solar power leasing is the fact that it relies on entrepreneurs and local businesses rising up to fill the need. There is no public money at stake, which sweetens the pot even more.
The S.C. Senate is on a break and will resume its session on April 9.
This is year one of a two-year session of the state legislature, so the political process will pause until January 2014 when the session resumes if the bill does not pass the Senate by June.
Anyone interested in signing an online petition to allow solar leasing should visit www.change.org/petitions/lower-our-electric-bills-by-allowing-solar-leasing . To contact your state senator about the bill, visit www.scstatehouse.gov/member.php?chamber=S . To contact your state representative, visit www.scstatehouse.gov/member.php?chamber=H

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