Energy Incentive Programs, North Carolina
Updated December 2011
What public-purpose-funded energy efficiency programs are available in my state?
North Carolina has no public purpose-funded energy efficiency programs. The state's utilities budgeted over $85 million for energy efficiency and load management programs in 2010.
What utility energy efficiency programs are available to me?
Duke Energy's Smart $aver® Incentives program offers prescriptive rebates for a wide variety of energy-efficient electrical equipment, including lighting, heating and cooling equipment, chillers, motors, pumps, variable frequency drives, process and food service equipment. Their custom incentives program provides cash incentives for non-prescriptive measures that demonstrably reduce electricity consumption and demand, e.g., thermal improvements to roof and wall insulation, efficient window upgrades, energy management systems, HVAC tune-ups, energy-saving process upgrades and retro-commissioning. An independent measurement and verification check-up is required for payment and usually occurs within a few months of installation. Incentive levels vary depending on the calculated energy savings, but cannot exceed 50% of the incremental measure cost. Projects may combine both prescriptive and custom measures.
Progress Energy offers its Energy Efficiency for Business program for both retrofit and new construction applications. Prescriptive rebates for efficient equipment include lighting, HVAC, refrigeration, and premium efficiency motors. A custom option provides for whole building measures and equipment not on the prescriptive list, with remuneration of $0.08 per first-year kWh saved (up to 75% of the incremental measure cost) for retrofit and individual measure new construction applications. For whole-building new construction applications, the rebate is either $0.09/kWh or $0.14/kWh (for projects showing at least 10% and 20% savings relative to code, respectively). In addition, generous financial incentives are available for energy-efficient design or building simulation modeling in new construction projects. Feasibility studies for existing facilities are subsidized at up to 50% of cost. Pre-approval applications are required for some elements of the program and encouraged for all.
PSNC Energy provides a $0.05/therm rate discount to LEED-certified buildings on its High Efficiency Small General Service (Rate 127) gas tariff.
What load management/demand response options are available to me?
Duke Energy offers several load management programs:
The PowerShare program provides financial incentives for reducing energy consumption levels during peak use periods. Customers may choose from a variety of curtailment options, including voluntary and mandatory load drops. There are also options to participate with self-generation equipment and to tailor the program for the number of events your site is willing to participate in each year.
The On-Site Generation Service Program targets customers who do not currently own back-up generation but would like to. Duke will install, own, and operate new generators (300 kW or larger) for participants willing to let the company use them in times of grid stress or high wholesale prices. There is a monthly service fee for this rate based on the levelized cost to own and operate the equipment.
Real time pricing is available to Duke Energy's large customers through its NC Hourly Pricing for Incremental Load rate schedule. Customers are notified of the hourly energy prices for the following day and are alternatively credited or charged, based on the hourly price, for usage below or above a pre-determined customer baseline load profile.
Progress Energy's load management programs include the following programs:
The optional real-time pricing tariff is available for up to 85 large customers (demand of 1,000 kW or greater). Participants are notified a day in advance of the hourly energy prices for the following day, and are charged or credited at these rates for any usage above or below a customer baseline load (CBL) that is based on their historical use.
Several available curtailable and dispatchible rate options offer favorable terms for general-use electricity in exchange for dedicated load that customers can reduce at the utility's request.
The PJM Interconnection (PJM), a regional transmission organization (RTO), offers several demand response programs. Two specific programs may be attractive to federal facilities in the PJM footprint:
The Economic Load Response program allows electricity users to provide load reductions in exchange for a payment based on hourly wholesale electricity prices. Participation is fully voluntary. Customers start by submitting load reduction bids through their curtailment service provider (any existing PJM member, such as their utility, a third-party electricity supplier, or a specialty CSP) of at least 100 kW into the day-ahead energy market. Participants whose bids are accepted are paid for their load reductions based upon the day-ahead, hourly electricity market prices (the day-ahead "locational marginal price," or LMP). Reductions are figured based on a customer baseline load (CBL), which is essentially the average load levels for the same hours in four of the facility's previous non-responding days. Regardless of which type of firm it is, the CSP will generally offer to split the revenues with the customer at a pre-determined percentage.
PJM's emergency "capacity" program allows demand resources to participate in PJM's Reliability Pricing Model (RPM) forward capacity market via a CSP. Participants pledge to either reduce their load by a specified amount (guaranteed load drop, GLD), or to a specific kW level (known as firm service level, FSL), within one or two hours of an event notification. Load reductions are mandatory and may occur up to ten times per year, lasting up to six hours per event. Penalties for non-compliance are substantial. Remuneration is based on the results of the annual RPM capacity auctions in various PJM regions. Remuneration levels for the 2012-13 and 2013-14 PJM years (which begin June 1, 2012 and June 1, 2013, respectively) in PJM's southern reach (including North Carolina) are as low as $6,000 per MW in 2012-13 and $10,000 in 2013-2014, compared to roughly $40,000 in 2011-12. Participants are also eligible to receive energy payments for actual reductions, though, if and when the program is called.
In both programs, participants can provide load reductions either through curtailing electricity use or operating on-site generation consistent with local environmental regulations and permits.
What distributed energy resource options are available to me?
The Database of State Incentives for Renewables and Efficiency (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following programs may be of interest to federal customers.
The NC GreenPower Production Incentive offers payments per kWh produced to producers of electricity from solar, wind, biomass, and small (< 10 MW) hydropower installations. NC GreenPower, an independent non-profit created by numerous stakeholders (including some of the state's electric utilities) to promote renewable generation throughout North Carolina, issues periodic RFPs based on voluntary consumer demand for renewable electricity in the state, but owners of small (sub-5 and-10 kW, respectively) PV and wind systems can apply at any time via an expedited application process. Remuneration rates vary by technology and time, but as of December, 2011 were $0.14/kWh for small PV-generated electricity and $0.13/kWh for small wind (including both the participating utility's power purchase and NC GreenPower's payment for the renewable energy credits). For larger systems, NC GreenPower expects prices, which are set by competitive bid, to lie below these levels based on its current donations profile.
Duke Energy's Standard Purchase Offer for RECs, following North Carolina's renewable portfolio standard, remunerates owners of renewable generation connected to Duke's grid for the systems' RECs. Prices are in the range of $30/SREC for solar output (of at least 35 MWh/year) and $6/REC (minimum 50 MWh) for the output of other renewable systems. Contracts are for between 5 and 15 years.
Progress Energy's Sunsense program offers $0.18/kWh for 20 years for the electrical output from rooftop PV systems of 10-250 kW (DC) and $0.20/kWh for renewable energy credits (RECs) for ten years for the thermal energy output of rooftop-mounted solar water heating systems.
Through the Green Power Switch Generation Partners Program, TVA will purchase the output of a solar photovoltaic, wind, biomass, or small hydropower installation of up to 50 kW for ten years. (Note that the maximum installation size for new projects under the Generation Partners Program has been reduced from 200 kW to 50 kW. Larger systems may qualify for the Renewable Standard Offer (see below)). The remuneration rates are $0.12/kWh above the retail rate for solar installations and $0.03/kWh above the retail rate for the other renewables. Purchases must be brokered by a participating power distributor (generally, utilities that purchase TVA power), and TVA retains all rights to any RECs generated by the project.
TVA's Renewable Standard Offer program provides power purchase plans of up to 20 years to developers of renewable projects (biomass combustion, biomass gasification, methane recovery, wind and solar) greater than 50 kW and up to 20 MW in size. Rates paid, which average about 5.5¢/kWh, are based on seasonal time-of-day averages. The energy seller must provide TVA with project financing and interconnection agreements as well as metering installation plans, and must sign over title to RECs and other environmental attributes generated by the system. The program has a production limit of 100 MW total, with no more than 50% of the total coming from any one renewable technology.
North Carolina offers a 35% state investment tax credit for renewable installations. While federal customers do not pay taxes and thus cannot utilize the incentive directly, contractors that develop renewable projects at federal sites with power purchase agreements may be able to take advantage of the credit and share the benefit with their federal customers.
Are there energy efficiency programs sponsored by the state government?
The North Carolina Energy Division offers a variety of energy efficiency initiatives, but none is currently available to federal facilities.
What additional opportunities are available to me?
Federal customers whose utilities have area-wide supply contracts through GSA (such as Dominion and Duke) may be able to take advantage of 3rd-party financed energy efficiency projects called utility energy services contracts (UESCs). Information is available on GSA's Energy Center of Expertise Library Page. Federal facilities should contact their account executive to determine the level of each utility's participation.
PJM (see above in the demand response section) now allows energy efficiency projects to participate in its forward capacity markets, based on its Reliability Pricing Model (RPM). To be eligible, EE projects must reduce load continuously by at least 100 kW during peak summer hours, and not be dispatchable. This load reduction can be bid into PJM's annual (for three years in advance) and "residual" (nearer-term) capacity auctions, and if selected will receive the auction clearing price. Interested customers can participate through energy service companies conducting ESPCs or utilities executing UESCs at their sites.