Duke Energy PowerPair Program Approved by NCUC

In March 2023, the North Carolina Utilities Commission (NCUC) rejected a Smart thermostat + solar incentive program proposed jointly by Duke and the solar industry. Instead, they ordered Duke to propose a residential solar + storage pilot program for Commission consideration. In June 2023, Duke filed the proposed PowerPair Solar and Battery Installation Pilot. Following a lengthy stakeholder process, the NCUC issued a final order on January 12, 2024 approving the PowerPair Program. Duke will have until May 10, 2024 to launch the PowerPair Program. The following is a summary of the key highlights of the new program:

What does the PowerPair Program mean for consumers?

Ultimately, this program makes pairing storage with a new solar system more affordable. The average solar battery costs between $400-$750 per kilowatt-hour (kwh), meaning an average solar battery typically costs between $10,000 and $20,000 when you factor in installation costs. Under the new PowerPair Program, eligible consumers could receive up to $9,000 to cover applicable solar and energy storage costs. For example, a homeowner who was to install a new 10 kw solar system, an average sized solar system, the incentives of this program would total $7,600 ($3,600 for a solar incentive + $4,000 for a storage incentive), and individuals in Cohort B would be eligible for ongoing monthly incentives.

Who is eligible for the Duke Energy PowerPair Program?

The following eligibility criteria applies:

• Applicant must be a Duke North Carolina customer (DEC or DEP) and own the home the system is installed at.
• The Duke PowerPair rebate is only for solar+storage projects. There are no solar only incentives for residential customers through Duke Energy.
• The application must be for a new solar system install (no system additions are considered) and the consumer must own or lease the equipment.
• Applicants cannot have reached commercial operation more than 90 days prior to submitting an application and must reach commercial operation within 270 days after receiving a reservation.
• An Interconnection Approval (ICA) must be submitted before an incentive program application.
• The system installer must first register with Duke Energy to participate in the Program.
• The max export to the grid can not exceed 20 kW AC at any time.
• Internet connectivity must be maintained.
• Only certain eligible battery types can participate.

Program Next Steps

• March 1, 2024: Website live
• May 10, 2024 - June 7: Initial PowerPair application open
• July 9, 2024: Customers can begin enrolling an eligible* battery storage system

Program Caps

The following PowerPair Program caps apply:

• 60,000 kW AC of solar total (~7,500 customers at an 8kW AC system size)
• 50/50 split between Cohort A and B availability (30,000 kW AC each)

Two Participant Groups

Duke has proposed the Program offerings be broken down into two “Cohorts” of customers:

• Cohort A (50% of participants) - Must enroll in Duke’s Successor Tariff w/ mandatory TOU rates. Customer retains complete control of the energy storage device and will receive the upfront solar + storage incentive payment only.
• Cohort B (50% of participants) - Must enroll in the Bridge Rate w/ optional TOU rates. Duke assumes control of the energy storage device during called “events” and the customer will receive the upfront incentive payments + monthly battery control incentive.

Incentive Structure

The following incentive structure applies for the PowerPair program:

1. Solar incentive: $0.36/ Watt AC up to 10 kilowatt (kW). This incentive is good for one time, up to a max $3,600.
2. Storage incentive:
   • Cohort A: $400/kWh up to 13.5kWh (one time, max $5,400)
   • Cohort B: $400/kWh up to 13.5kWh (one time, max $5,400) + battery control incentive of $6.50/kW/month (nominal/continuous output). The net battery control incentive system owner receives is $4.61/kW/month.

Cohort B - Battery Control

Duke Energy's PowerPair program has a mandatory battery control for Cohort B. This is described as follows:

• Duke Energy will be allowed to remotely call a “control event” 18 times per winter season (Dec- Mar); up to 9 times per summer season (May- Sept); and up to 9 times in remaining months.
• A Control Event will send a signal to the battery and discharge it within 48 hours.
• Duke will not discharge below a 20% state of charge in the battery.
• Duke Energy also reserves the right for interruption outside of these parameters in the event continuity of service is threatened.

Application Process

• First four weeks of the Program will be a lottery. If first year Program caps are met during this time, projects will be randomly selected or waitlisted.
• If first year program caps are not met during this period, the Program will remain open until the first year caps are met with all additional projects placed on a waitlist.

Tax Reporting

All incentive payments will be reported to the IRS through a Form 1099.

Clawback Provisions

Duke's PowerPair program has the following clawback provisions:

1. Early Termination Fee - An early termination fee will be assessed to any project removed from the Program prior to the term and will be prorated based on the months remaining and the total incentive amount paid.
2. Inoperable equipment charge - This charge will be a monthly proration of the total incentive payment and will be assessed each month following a 90-day grace period. Systems inoperable for 12 months straight after the 90-day grace period will be removed from the Program and have the early termination fee assessed.