Duke Energy rates will skyrocket after June 15!
For Duke Energy customers in North Carolina, your rates are scheduled to go up more than 40% over the next few years, and savings with solar are going to be cut in July, 2023!
Duke Energy Carolinas is scheduled to raise the cost of your electricity 17% this year and nearly 16% by 2026, after a 9.6% increase last year, resulting in a combined 42% rate increase over the next two years!
To make matters worse, Duke Energy Carolinas and Duke Energy Progress have made solar more expensive after June 15, 2023! The current model of full-retail net metering (100% credit for the electricity you sell) will end after June 15, 2023. Homeowners will have a Bridge Plan option until January 1, 2027, which is expected to offer about 10% less than full retail net metering. After January 1, 2027, billing will change to Time of Use and the only net metering plan will be Solar Choice rate, which will offer 40%-50% of current savings with solar.
Over the next two years, Duke Energy Carolinas will raise your cost for electricity at least 32.7% after a nearly 10% increase over the last 12 months. That means an average $200 monthly bill in 2021 is $219 this year, will be $256 next year, and $297 by 2026, assuming there will be no other increases. This is the landlord raising your rent.
Part of the backstory: from January 2022 to January 2023, the national average cost of natural gas rose an astounding 26%. Because most utility companies have switched from burning coal to burning natural gas to produce electricity, the cost of electricity went up 12.9% during the same period:
Electricity rates are approved by state regulatory commissions based on budget requests submitted by the utilities, so many utility companies are now requesting sharp rate increases to recoup losses from these increased costs. In other words, the utility companies must please their shareholders, and will pass the cost of doing business to you, the consumer.
In fact, Duke Energy Carolinas will raise your rates 17% by January 1, 2024, to compensate for increased operating costs from rising natural gas prices.
This sharp hike follows the 9.6% rate increase in 2022.
These rate increases coincide with a separate increase of 15.7% by 2026 to cover grid infrastructure improvement costs.
That means two separate rate increases at the same time, resulting in an overall rate increase of about 32.7% by 2024. However, inflation remains high, natural gas prices remain high, and it is likely Duke Energy will continue to raise rates to compensate for high operating costs.
And finally, Duke Energy is moving to a Time of Use (SGS-TOUE) model billing for all customers over the next few years, which will mean about a 50% increase for high demand periods of use, such as summer afternoons, when air conditioners are running constantly. Current rates are $0.13/kWh for Duke Energy Progress off-peak hours; $0.22/kWh for Duke Energy Progress peak hours; $0.10/kWh for Duke Energy Carolinas off-peak hours; and $0.21/kWh for Duke Energy Carolinas peak hours. With the proposed rate increases, all TOU rates will increase.
Solar panels can only generate electricity when the sun is out, so solar power works best with a good net metering agreement with your utility company. We design your system to produce as much energy over the course of a year that you are expected to use, and the panels overproduce during the day, sending the excess to the grid. Your utility company gives you credit for the energy you give them, and you use those credits to offset the cost of the energy you use from the grid when the panels are not producing what you need.
Currently, Duke Energy offers one kilowatt credit for each kilowatt of electricity you send to the grid, which means each kilowatt of electricity you use can be fully offset by one credit.
Beginning July 1, 2023, Duke Energy Carolinas and Duke Energy Progress will end 1:1 net metering (or full-retail net metering), and June 15 is the deadline to sign up for 1:1 net metering before it is retired.
After full-retail net metering is retired, Duke customers can choose between the temporary Bridge Rate plan or the Residential Solar Choice plan.
The Bridge Rate plan is only available until 2027 provides a transition between full-retail net metering and the only net metering option available after 2027: Residential Solar Choice.
Mandatory costs
First, the two new solar programs both have added costs that cannot be offset by solar, called “nonbypassable fees”.
-There will be a required minimum monthly bill of $22 for Duke Energy Carolinas customers and $28 per month for Duke Energy Progress customers, regardless of how many credits you accrue. -There is a mandatory cost recovery charge for Duke’s demand-side energy programs such as the Residential $mart Saver Energy Efficiency program; this fee is based on system size, with a proposed rate of $0.36/kW for Duke Energy Carolinas customers and $0.44 for Duke Energy Progress customers.
-Currently, the only fee is the grid access fee; this will change to apply only to homeowners with a 15kW size system or larger, at a rate of $2.05/kW for Duke Energy Carolinas and $1.50/kW for Duke Energy Progress. For example, a Duke Energy Carolinas customer with a 16kW system will pay $32.80 more per month.
Savings with Solar
Full-retail net metering: The current net metering program provides a full rate credit for each kWh of electricity to sell to Duke Energy and the only monthly fee is for grid access. That means if your system produces as much energy as you consume in a given month, the credits zero out the cost of the energy you receive from the grid, because you offset that electricity with the excess you sold to Duke Energy. The deadline to enroll in this program is June 15, 2023.
Bridge Plan: The Bridge Plan is only available for homeowners who sign up between July 1, 2023 and January 1, 2027; at that point, all net metering will switch to the Solar Choice Rate. Under the Bridge Plan, the flat rate of cost for electricity remains the same (instead of switching to the Time of Use (TOU) rate schedule. There is a non-bypassable charge of $0.28/kW for this plan, so the size of the system will determine the monthly bill. The bridge rate is 10% smaller than the fixed rate and will be available to around 5,000 Duke Energy customers in 2024.
Solar Choice rate: This will be the new net metering program, and requires that homeowners with solar switch to the Time of Use (TOU) model of billing, which means some billing rates will be twice what they are now (peak times are estimated to be $0.21/kWh, as compared to $0.11/kWh now). With the rate change and mandatory fees, a current average $300 summer bill will be roughly $170/month, not including the 32.7% rate increase expected between now and 2026, which will be more dramatic under a TOU billing model.
Full-retail net metering: The current net metering program provides a full rate credit for each kWh of electricity to sell to Duke Energy and the only monthly fee is for grid access. That means if your system produces as much energy as you consume in a given month, the credits zero out the cost of the energy you receive from the grid, because you offset that electricity with the excess you sold to Duke Energy. The deadline to enroll in this program is June 15, 2023.
Bridge Plan: The Bridge Plan is only available for homeowners who sign up between July 1, 2023 and January 1, 2027; at that point, all net metering will switch to the Solar Choice Rate. Under the Bridge Plan, the flat rate of cost for electricity remains the same (instead of switching to the Time of Use (TOU) rate schedule. There is a non-bypassable charge of $0.28/kW for this plan, so the size of the system will determine the monthly bill. The bridge rate is 10% smaller than the fixed rate and will be available to around 5,000 Duke Energy customers in 2024.
Solar Choice rate: This will be the new net metering program, and requires that homeowners with solar switch to the Time of Use (TOU) model of billing, which means some billing rates will be twice what they are now (peak times are estimated to be $0.21/kWh, as compared to $0.11/kWh now). With the rate change and mandatory fees, a current average $300 summer bill will be roughly $170/month, not including the 32.7% rate increase expected between now and 2026, which will be more dramatic under a TOU billing model.
I hope this is informative and helpful for homeowners thinking about solar. If you have any questions about net metering or solar panels for your home, feel free to contact me, I'm here to help!
Jamie Duncan is an energy consultant operating virtually nationwide. Please click the button to learn more or set up a virtual appointment to discuss solar for your home.
#solar #solarenergy #whysolar #whatissolar #lkn #lakenorman #charlottenc #clt #cornelius #huntersville #davidson #denvernc #mooresville #troutman #denvercolorado #austintexas #houstontexas #dallastexas #littletoncolorado #greenvillesc #goldencolorado