• Solar Test Case Heads to North Carolina Supreme Court
  • January 10, 2018 | Authors: James A. Orr; Tracey K. Ledbetter; Margaret L. Flatt
  • Law Firm: Eversheds Sutherland (US) LLP - Atlanta Office
  • The North Carolina Waste Awareness and Reduction Network (NC WARN), a Durham, North Carolina based activist group, has filed an appeal of a North Carolina Court of Appeals decision upholding the North Carolina Utilities Commission’s ruling that third-party sales of solar-generated electricity violate state law.

    As previously reported, NC WARN is prosecuting this admitted “test case” to determine whether third-party sales of solar-generated electricity qualifies the third-party seller as a “public utility” under North Carolina law. NC WARN installed a solar photovoltaic system on the roof of a church in Greensboro, North Carolina, in 2015. NC WARN, which owned the rooftop solar installation, then sold energy generated by the rooftop panels to the church. NC WARN argued that this arrangement constituted providing funding (a service) rather than just selling electricity to a church. This funding mechanism would supposedly allow the church to avoid the up-front cost of installing a solar photovoltaic system while also creating a revenue stream that would allow NC WARN to install similar systems for other customers.

    NC WARN filed a petition seeking a declaratory ruling that it was not a public utility under the relevant state law. The Commission received comments from various utilities and advocacy groups regarding the legality of third-party sales such as those by NC WARN.

    The Commission ultimately denied NC WARN’s petition, concluding that under state statutory and case law, the NC WARN program constituted service to the public and was thus impermissible. The Commission noted that state law does not allow a third party to compete with the incumbent power company in its exclusive franchise territory.

    NC WARN appealed the Commission’s decision to the North Carolina Court of Appeals, which denied the appeal in a 2-1 opinion. Like the Commission, the North Carolina Court of Appeals concluded that NC WARN was acting as a “public utility” by operating its system of solar panels for the church on the church’s property.

    NC WARN filed an appeal with the North Carolina Supreme Court on November 16, 2017. NC WARN repeated its argument that its arrangement with the Greensboro church constitutes “supplying financing for the up-front cost and maintenance” of the solar energy system, rather than the sale of energy to the church.