Seeking simpler solar review

A solar energy company says that it's too hard to get OK to connect with utilities

A leading national solar energy company is asking the N.C. Utilities Commission to follow the example of other states and make it easier for private energy companies to produce and sell electricity here.

According to SunEdison, an energy company that has developed more than 100 commercial solar energy projects nationwide, North Carolina has most of the pieces in place for a bright solar energy future. There's ample sunshine. The state's incentive program reimburses businesses up to $2.5 million for renewable energy equipment and labor costs. And eco-friendly businesses are increasingly interested in buying solar electricity.

The solar industry could easily power the equivalent of 50 large stores here, said SunEdison's chief executive, Jigar Shah.

But North Carolina won't realize its solar potential without the backing of the state's big utilities and utility regulators, Shah said. And so far, they say, that support is lacking.

Progress Energy and Duke Energy are opposed to lowering the barriers to entry. The two utilities contend that connecting private power companies to a utility network without rigorous engineering reviews endangers utility workers and could disrupt power reliability for thousands of customers.

Aside from making clean energy, what SunEdison proposes is unusual by North Carolina standards: By becoming an alternative to a utility monopoly, SunEdison is promoting consumer choice within the tightly regulated electric utility sector in North Carolina. Indeed, states where SunEdison is competing with regional utilities for customers, such as California and New Jersey, have been through deregulation.

Backed by state and federal incentives for alternative energy, SunEdison is able to provide electricity at about the same price as the local utility, Shah said. The 20-year contracts are structured with fixed payments, like a home mortgage -- an arrangement that eliminates future rate increases and unpredictable fluctuations in fuel costs -- something no utility can match in a state where rates are regulated.

"What we provide is price predictability," Shah says. "It'll be at or below what the utilities charge currently in North Carolina."

SunEdison installs solar panels on the roof of a commercial customer's property and enters into long-term power contracts, typically for 20 years. In periods when the sun shines, SunEdison's photovoltaic panels can provide up to 100 percent of a commercial customer's power needs, Shah said. The company's customers include Staples, Whole Foods, Guardian Self Storage and other businesses and local governments.

But SunEdison's solar panels have to be connected to the utility's power grid so that at night, or on cloudy days, or during periods of high demand, a SunEdison customer can draw needed electricity from the utility.

And that's the rub, says Shah and environmentalists in North Carolina. They say that negotiating that interconnection can take many months, an investment of time and money that could sink a renewable-energy project.

"The engineering and legal costs of doing this stuff at $200 an hour can mount," said Richard Harkrader, a solar developer active in the N.C. Sustainable Energy Association.

Streamlined for some

Utilities are required to interconnect with smaller power generators, such as SunEdison, under a 1978 federal law. But utilities also have to protect the integrity of their power grids and are given discretion on quality control. An interconnection not only allows an alternative generator to replace utility power, for example, during a power outage, but also lets that generator sell surplus power back to the utility.