Duke Energy has decided to cut its $100 million distributed solar program in North Carolina. According to Earth2Tech, the reasoning isn't cost or even technology: the change was required by the North Carolina Utility Commission after a lengthy review of Duke's proposal.

During the review process, both the Solar Alliance and the Vote Solar Initiative argued that Duke's plan would create a monopoly on solar power in the state of North Carolina Owen Smith, the managing director of regulated renewable energy and carbon strategy at Duke, gave testimony to the Utility Commission stating that the distributed solar program was key to Duke's ability to meet that requirement.

One specific area of concern for the Vote Solar Initiative is that between the distributed solar project and Duke's power purchase agreement with Sun Edison, the company would have enough RECs within a few years to satisfy its legal obligations regarding renewable energy for years to come.

While these are valid concerns, it seems like Duke is being penalized for meeting a new obligation with good business sense. The company was handed legislation requiring it to make very expensive changes to its infrastructure: rather than trying to find ways around it, Duke found a solution that would allow it to go beyond the actual requirements of the legislation and avoid similar upgrades for several years after the projected completion date. This problem, in part is created by the nature of utility regulations — simply put, adding renewable energy generation to a utility operating in a regulated market is so complex that most companies do not even attempt it. Southern California Edison and PG&E have both announced that they would like to move into solar power generation, but both utilities are waiting for regulatory changes.