Just as more wind-harnessing turbines are popping up in Southern California and Texas, more solar panels will soon dot North Carolina. In mid-September, Duke Energy announced it is investing $500 million in the acquisition and construction of new solar farms in rural parts of the state (where land is cheap), including the largest such farm east of the Mississippi. It has also penned contracts with existing solar farms to use some of their energy.
The deal is, in part, the company complying with a state mandate from 2007 that requires 12.5 percent of a public utility's energy portfolio to come from renewable sources, such as solar and wind, by 2021. And as with the majority of decisions made by a for-profit company, part of the deal is also driven by profit.
Duke's coal and nuclear plants, where a vast majority of energy is still sourced, are aging, and maintenance is getting more expensive as the years roll by. More stringent environmental regulations make coal especially a more expensive resource, says Steve Kalland, executive director of the Clean Energy Technology Center at North Carolina State University in Raleigh. Not to mention all the bad PR Duke has gotten in recent years over its mishandling of coal ash.
As a result, Duke will continue to shutter more coal-burning plants, replacing them with natural-gas plants and, to some extent, solar-energy farms.
Kalland says this marks the beginning of a new era for the company.
"This is a significant and real amount of energy that is now being generated from solar. It is still a very small amount of energy relative to [Duke's] entire portfolio ... but we're seeing a wholesale shift in the way Duke generates energy on a lot of fronts."
Solar energy wasn't profitable when the technology was in its infancy. Even when the state mandate that required renewables went into affect, just seven years ago, the technology was much less advanced and more expensive than it is today. But as the technology continues to improve and costs continue to go down, companies are beginning buy into it.
"Once you've got it [a large-scale solar farm] built, because there are no fuel costs associated with it you pretty much have a fixed cost for your energy production for the lifespan of a system, or for about 30 to 40 years," Kalland says.
North Carolina leads the country in such large-scale solar farms, but Kalland wishes more North Carolinians would invest in smaller-scale projects, like rooftop panels. But even he admits such projects face significant hurdles. Duke has been less than supportive of smaller-scale projects ("fewer electrons being sold, therefore they don't have as much of an opportunity to generate revenue"), and a tax credit that incentivized home owners to build and use solar panels is set to expire in December 2015.
He doesn't anticipate any noticeable initial impacts on air quality from Duke's new solar farms, nor does he think rate payers will see larger bills. If anything, he says relying on more renewables will reduce costs in the long run. "Every journey starts somewhere, and we're starting to take steps. Not baby steps, but real steps."
