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Duke Energy to invest in mini solar power plants

Can hundreds of rooftop solar panels collectively operate like a central power plant? Duke Energy launches $100 million distributed solar program to find out.

Duke Energy on Thursday said it is seeking bids on a planned $100 million solar energy investment, a program to assess whether distributed rooftop solar panels can collectively function like a virtual power plant.

The utility said that next year it plans to start installing solar electric panels at 850 locations in North Carolina that would be capable of generating 16 megawatts of electricity, or enough to power about 2,600 homes.

Part of a distributed "solar power plant"? SolarCity

Like other utilities, Duke Energy is purchasing electricity from large-scale solar power plants, where hundreds of photovoltaic panels generate tens or hundreds of megawatts of electricity.

Duke's distributed energy plan amounts to a solar power plant, spread out over many locations.

The utility will install, own, and maintain the equipment and get all the electricity the panels generate. Consumers are paid a rental fee for allowing Duke to install the panels on their rooftops or land.

The goal of the program is to measure whether distributed energy can make a significant dent in the overall power generation mix, while offsetting power demand during peak times.

At 16 megawatts for $100 million, it's significantly more expensive than a traditional power plant, but the utility will use the pilot project to gather data, according to a Duke Energy representative. Longer term, thousands of panels on rooftops could be cheaper than building a new power plant, he said.

It's also much smaller: a nuclear power or coal plant can generate between 800 and 1,100 megawatts. One megawatt is enough to run a large retail outlet.

Duke chose North Carolina for the effort because utilities that operate in that state need to generate a fraction of their electricity from renewable sources, a policy called a renewable portfolio standard. It still needs approval from the state's regulatory agencies.

So far, both consumers and businesses have voiced interest in participating in the program, which would have the panels installed by 2010.

"There is an enormous number of people who really believe in renewable energy. It's not just the so-called green crowd," the Duke Energy representative said. "There are a lot of big believers."

Since homeowners or businesses are not paying for the panels, the electricity they generate will go straight into the grid and not offset Duke Energy customers' bills.

Another utility that plans on a similar distributed solar plant design is Southern California Edison, which said earlier this year that it plans to spend $875 million over five years to get electricity from over two square miles of flat commercial rooftops.