- It is undisputed that backup generation is an integral, inseparable aspect of solar facilities
- The North Carolina Utilities Commission treats solar facilities as if they are low-cost sources by treating their necessary backup generation and storage needs as independent from them
- The danger in failing to account for those costs is to bring on expensive, unreliable power to the grid and raise rates on customers under the pretense that solar is the least-cost option
Imagine a car without an engine. It doesn’t need expensive gasoline. It can reach fairly high speeds — if it’s going down a steep and long enough grade. Now imagine buying this car without an engine, hoping for nature to provide enough downhill descents, and boasting of having no fuel costs. Then imagine making other people pay for your engine, fuel, and related expenses as you purchase only the body of the vehicle.
This scenario is essentially the deal that the North Carolina Utilities Commission has handed Duke and its ratepayers with respect to solar facilities. Ratepayers are told the facilities are inexpensive and have no fuel costs, but they work only when nature provides them enough sunlight and require backup generation all the rest of the time. Even so, those backup sources are treated as if they were independent from — not an integral part of — the solar facilities.
Solar and wind are not dispatchable, so they need backup generation
Solar and wind are not dispatchable resources, which means that they are unable to produce or adjust their output (i.e., be dispatched) in order to meet changes in electricity demand. For that reason, backup generation is a critical and indivisible aspect of solar and wind facilities.
This fact is not even disputed by those who advocate for renewables. A post on the Massachusetts Institute of Technology (MIT) Climate Portal explained that a grid dominated by wind and solar would “raise the price of electricity.” MIT economist Richard Schmalensee explained that under coal, natural gas, and nuclear, we can “match[] electricity supply and demand moment-to-moment,” but not so with intermittent solar and wind, under which “[y]ou get what you get when nature gives it to you.” In other words, the renewables need backup generation to switch on and off as needed to approximate reliability:
Even if energy storage becomes more affordable, running an electric grid entirely on solar and wind is always going to be more complicated than what we have now, Schmalensee says. For that reason, we may need climate-friendly energy sources we can turn on and off at will—whether that’s coal or gas plants fitted with carbon capture technology, or something new like small nuclear plants. The more of these backup sources we have, the more we can rely on low-cost solar and wind energy at their peak generation times.
As Schmalensee says, “That’s just a more complicated system, and it’s not going to be cheaper.”
Not being dispatchable means that solar and wind cannot be considered reliable. A 2022 study of solar and wind facilities’ effective load carrying capabilities conducted by Astrapé Consulting for Duke Energy Corporation stated this in its introductory summary: “Because solar and wind are intermittent resources, a solar or wind facility’s ability to provide reliable capacity when it is needed is different from that of a fully dispatchable resource such as a gas-fired turbine, which can be called upon in any hour to produce energy, notwithstanding unit outages.”
Without backup generation, solar and wind are essentially unreliable — unable to adjust output according to moment-by-moment changes in demand. This moment-by-moment dispatchability is key to a reliable grid because electricity is consumed as it is produced. Since these renewables don’t have dispatchability, they require being backed up with something that does — usually a combustion turbine natural gas plant and storage.
Backup generation inescapably adds to system costs
A January 2026 report from Bank of America Institute (BOAI) contrasted the reliability of nuclear power plants with other sources of electricity, leading to an important observation about system costs from unreliability:
Nuclear power plants are highly dependable, producing power 93% of the time, on average, versus just 57% for natural gas and 40% for coal (Exhibit 8). Renewable sources like wind and solar are more variable, generating power 35% and 25% of the time, respectively. …
[T]echnologies with lower values struggle to provide steady power. Nuclear power plants deliver consistent output, while solar and wind fluctuate significantly (Exhibit 9). To compensate for these swings, renewable sources require either a backup source (such as natural gas or coal) or energy storage solutions like lithium-ion batteries.
From there, the BOAI report then made a key observation: “Industry research suggests that, after accounting for efficiency, storage needs, transmission costs, and other broad system costs, nuclear power plants are one of the least expensive sources of energy.”
MIT’s Schmalensee acknowledges that there’s no way to make “a completely wind- and solar-powered grid” price-competitive with “the out-of-pocket costs of fossil fuels.” His answer would be to make coal and gas expense-competitive by essentially imposing a “carbon tax” — that is, raise the cost of coal and gas artificially by “incorporat[ing] the damage caused to the planet and humanity by filling up the atmosphere with carbon dioxide.”
The NCUC’s answer, however, is not to account for what the BOAI report called the “efficiency, storage needs, transmission costs and other broad system costs” with respect to pricing solar facilities while nevertheless imposing those costs across ratepayer bills. The danger in failing to account for those costs is to bring on expensive, unreliable power to the grid and raise rates on customers under the pretense of it being least-cost.
On March 16, 2026, the ranking members of the North Carolina Joint Legislative Energy Policy Commission sent a letter to Deputy Secretary James Danly of the U.S. Department of Energy (DOE) to request aid in determining solar facilities’ costs. Committee chair Sen. Tim Moffitt, R-Henderson, and vice chair Sen. Buck Newton, R-Wilson, wrote:
We write to request DOE’s technical perspective on an issue state regulators increasingly confront when evaluating utility-scale solar and solar-plus-storage projects: the persistent exclusion of material system costs that are directly caused by these resources but routinely socialized across the broader grid.
Among the “consequential costs” of a solar project that are “foreseeable, recurring, and essential for reliability,” wrote Moffitt and Newton, are “firming resources” (backup generation sources) and their operations and maintenance (which are made worse from cycling on and off in backing up the project), “grid upgrades driven primarily by intermittency rather than load growth,” and “battery replacement costs” over the solar project’s lifecycle.
They requested guidance from the DOE in “evaluating these costs explicitly — rather than implicitly or system-wide” to help the NCUC “make prudent, technology-neutral, least-cost determinations consistent with statutory reliability obligations.”
Conclusion
A solar facility without backup generation would be like a car without an engine. Its costs should reflect this reality. Why don’t they? The next brief on this subject will examine this issue further.
