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North Carolina Solar PV Distributed Generation Program FAQs

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What is solar energy?

Solar energy is power that can be harnessed from the sun and converted into other forms of energy such as heat and electricity. Solar thermal energy systems typically use rooftop panels to produce hot water or hot air for heating. Solar photovoltaic systems use photovoltaic cells to convert sunlight directly into electricity.

What is a Photovoltaic (PV) system?

A photovoltaic or solar cell is the basic building block of a PV (solar electric) system. A single PV cell is usually very small and typically produces about one or two watts of power. To boost the energy output of PV cells, they are connected together to form larger units called modules. The modules can then be connected to form even larger units called arrays, which can be interconnected to produce more power. This way, PV systems can be built to meet a variety of electric power needs, large or small.

The balance of system or “BOS” makes up the other components of a photovoltaic system. This includes an inverter to convert the direct-current electricity produced by the modules into alternate-current electricity, wiring, switches and support racks.

What is distributed generation?

Distributed generation is energy created close to where it is used, rather than being produced in large power plants and sent over long distances to customers over power lines. Generating energy at the end point of use eliminates line losses and, thereby, increases efficiency.

How long do PV systems last?

A solar PV system that is designed, installed and maintained properly should last approximately 25 years. While these systems may be capable of producing energy beyond that time, the amount produced may be reduced over time.

What's the difference between PV and other solar energy technologies?

There are four main types of solar energy technologies:

  • Solar PV systems convert sunlight directly to electricity using PV cells made of semiconductor materials. This direct current electricity must be converted to alternating current electricity through an inverter before it can be delivered onto the electrical grid. PV technologies are adaptable to a variety of climates.
  • Solar thermal systems produce electricity from the sun’s heat, rather than light, using reflective devices such as troughs or mirror panels. Solar thermal technologies require excellent solar resources where clouds and rain are rare, such as the southwest United States.
  • Solar water heating systems do not produce electricity, but contain a solar collector that faces the sun and either heats water directly or heats a fluid that, in turn, is used to heat water.
  • Transpired solar collectors (or solar walls) use solar energy to preheat ventilation air for a building.

Why did Duke Energy choose solar PV technology?

Duke Energy is continuing to diversify the mix of fuels we use to generate electricity for our customers by making significant investments in a variety of renewable energy sources to add to our hydroelectric capacity. This includes solar, wind, biomass and landfill gas. We are also pursuing a balanced approach which involves building and operating some of these resources ourselves, as well as entering into agreements with independent project owners to purchase renewable energy.

We selected PV technology for this program to help us evaluate the effects of distributed generation on our system, gain experience in owning and operating renewable energy sources, and encourage development of the solar industry in North Carolina. We also chose solar PV over solar thermal systems because the Southeast does not have adequate solar resources to support solar thermal systems, nor can they effectively be built in a small-scale distributed manner. 

We did not consider solar hot water for this program because it does not produce electricity. Therefore, it would not help in assessing the impacts of significant distributed generation resources operating on our electric system.

Will solar PV systems replace nuclear and coal plants?

Solar PV is a cyclical resource, meaning that it only produces energy when the sun is shining. Cyclical resources cannot replace baseload generation, like coal and nuclear, which operate around the clock. Storage of energy (with batteries or other storage technologies) from cyclical resources does lessen this effect, but adds significant cost. Right now, nuclear and fossil-fueled generation is relatively inexpensive compared with the cost of solar energy.

What are some advantages of solar energy?

One of the main advantages of solar energy is that it is powered by a renewable energy source – the sun. Because solar PV systems burn no fuel and have no moving parts, they are clean and quiet, producing no emissions or greenhouse gases. Power is produced at the site, reducing the need for extensive transmission lines or a complex infrastructure.

What are some disadvantages of solar energy?

Solar energy technologies often have higher upfront costs. Capacity factors also tend to be low. This means that energy is only produced when the sun shines rather than around the clock.

How much electricity does a photovoltaic (PV) system generate?

That depends on the size of the system. Duke Energy’s solar program has 10 megawatts of capacity and is expected to produce 15,000 megawatt-hours of energy each year. A 2-kilowatt residential system can produce about 3000 kilowatt-hours of energy per year, or about one quarter of what a typical residential customer would consume in a year.

Where will the solar facilities be located?

Typical sites would include the roofs of large commercial or industrial buildings, groceries and residential rooftops. In addition, some ground-mounted solar installations could be located on existing Duke Energy properties.

Who can participate in Duke Energy’s solar program?

Due to exceptionally high interest in the program, we’ve reached our limit for applicants.

Will it cost me anything to participate in the program?

No, participating customers will not incur any direct costs associated with the program’s solar generation facilities.

How much will this program cost the average North Carolina residential customer (who does not participate by putting solar panels on their roof)?

Over the life of the program, the cost to the average North Carolina residential customer will not exceed 8 cents per month. The estimated cost to commercial customers is 42 cents per month and $4.25 per month for industrial customers.

How do I know if I have enough sunlight for solar panels?

A site evaluation will determine if there is enough sunlight for solar panels. Typically, south-facing roofs with no shading are preferred.

How much space will the solar panels require?

That depends on the capacity of the system and the type of panel. A 2-kilowatt residential system using crystalline panels would require about 200 square feet of roof space. A crystalline ground-mounted system would require five or more acres per megawatt.

Who will install and maintain the solar PV system?

Duke Energy will install and maintain the solar PV system for the life of the lease.

Do I have to sign a contract to keep the solar panels for a specific period of time?

Yes, the solar program requires the property owner or landlord to sign a 25-year lease.

How will I know if I’ve been selected for the program?

You will be notified via e-mail by a Duke Energy representative if your site is prequalified for consideration. Through a process of elimination, Duke Energy will determine which sites are best suited for the program.

Will I be able to decide where the solar panels will be placed (roof or ground)?

If you are prequalified for a site visit, Duke Energy will work with you to determine the best location for a solar system.  

What happens if I move or sell my property?

The lease will be transferred to the new owner. 

Can I purchase the solar PV system after the program ends?

The property owner may purchase the system for a negotiated price at the end of the 25-year lease.

What happens if the solar panels or my home or business is damaged?

As the owner of the solar panels, Duke Energy would make a decision on the appropriate action, depending on the cause and severity of the damage. If the home or business is damaged due to the solar panels, Duke Energy will repair damage that is attributed to the system.

Is this program the same as net metering?

No. Net metering offers customers the opportunity to produce energy from generating units that they own and operate, and then sell their excess power to Duke Energy. Under the N.C. Solar PV Distributed Generation program, Duke Energy would own, operate and maintain the generating units, as well as the power produced.

Why doesn’t Duke just buy renewable generation from a third party?

Duke Energy’s renewable energy strategy involves a balance between arrangements with third parties and investments in generation assets that we own and maintain. By owning the solar PV facilities, we will gain expertise in owning and operating renewable solar generation. This will also allow the flexibility to build or purchase renewable generation (as we did with SunEdison) when a need arises in the future.

Will the program include installations in South Carolina or other states served by Duke Energy?

While there are no plans to expand this specific solar program to other states, we anticipate offering alternative renewable energy programs in other states served by Duke Energy. The North Carolina solar program is an initial step to what we hope will be the widespread use of solar distributed generation on our entire system.

How much of Duke Energy’s North Carolina Renewable and Energy Efficiency Portfolio Standard (REPS) requirement does this program satisfy?

The solar program will help Duke Energy satisfy a significant portion of the company’s near-term solar requirement under the North Carolina Renewable and Energy Efficiency Portfolio Standard (REPS), which requires the utility to satisfy 12.5 percent of its customers’ power needs with renewables or energy efficiency by 2021. Investor-owned utilities, such as Duke Energy, must also meet incremental requirements in earlier years.