Solar Financing in North Carolina

72 Pages Posted: 10 Feb 2017

Date Written: February 10, 2017

Abstract

Clean, renewable energy is an essential component of a modern energy policy. Rooftop solar photovoltaic systems constitute an important part of a state’s clean energy portfolio. But rooftop solar photovoltaic systems are too expensive for most individuals and small businesses to buy outright. Instead, they must be financed. One of the main methods used in other states for financing rooftop solar PV systems is the power purchase agreement. Under a typical power purchase agreement, a third-party financer installs a solar PV system on a property owner’s rooftop and sells the electricity generated by the system to the property owner. The price for the electricity is usually lower than the price charged by the property owner’s public utility. But the North Carolina Utilities Commission has prohibited the use of power purchase agreements in North Carolina. According to the Utilities Commission, the sale of electricity by a third-party financer under a power purchase agreement violates the competitive monopoly granted under state law to the public utility.

This prohibition against power purchase agreements will slow the spread of rooftop solar PV systems in North Carolina. In addition to the detrimental environmental effects this will have, there are also equitable effects. Without power purchase agreements, only the wealthy are able to afford the economic and environmental benefits of solar ownership. This Article contends that power purchase agreements do not implicate the traditional justifications for regulation by the Utilities Commission, and are therefore outside the Commission’s authority to prohibit. The Article also offers both a legislative and a judicial solution to the current prohibition against power purchase agreements in North Carolina.

Suggested Citation

Haile, Andrew J., Solar Financing in North Carolina (February 10, 2017). Elon University Law Legal Studies Research Paper No. 2915146, Available at SSRN: https://ssrn.com/abstract=2915146 or http://dx.doi.org/10.2139/ssrn.2915146

Andrew J. Haile (Contact Author)

Elon University School of Law ( email )

201 N. Greene Street
Greensboro, NC 27401
United States

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