2021 State Energy Conference: How North Carolina Utilities & Solar Developers Found Common Ground

In 2007 and the years immediately following, North Carolina utilities, solar developers, policy makers, and regulators collaborated to create a combination of state policies and incentives which propelled North Carolina to the second leading solar generation state. By 2016, this success was having "unintended consequences" - including a waiting list for utility connection to the grid of more than 500 solar projects and a crowded queue that was often complicated by conflicting, confusing, and changing utility rules.

In fall 2020, utilities, solar developers, and regulators again collaborated to tackle some of the most thorny interconnection issues and get the solar development process back on a better track. One session at the recent State Energy Conference featured several speakers - including Leyline's Rebecca Chilton - on the results of this interconnection queue resolution and what it signals in terms of future development in solar and other technologies and how to work with other stakeholders in the state.

Leyline Renewable Capital lends money to project developers facing interconnection costs or other pre-construction costs. Rebecca gave insights into how developers - and their financing partners - found themselves suddenly faced with enormous costs, unexpected delays, and added uncertainty in the interconnection process, and how those risks slowed the willingness of investors to get behind North Carolina solar projects.

An example of the interconnection muddle that 2020's collaborative process aimed to resolve was the imbalanced impacts of the utilities' previous "first-come, first-served, first-pays" approach to interconnection. If a grid substation upgrade was needed to interconnect multiple solar projects, the cost of the upgrade was unfairly shouldered by the first developer to be ready for interconnection (the head of the queue bearing the full cost of the next upgrade needed). The stakeholders who sat down last October instead drew on other jurisdictions' experience with this problem and devised a process of "clustering" projects by time and readiness and spreading the cost of studying and building substation upgrades across the cluster. Obviously, this next year will be where the rubber of theory meets the road of practical implementation, but participants in the process feel it is a good start to resolving one of the biggest obstacles to North Carolina continuing to lead on solar nationally.

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