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By Ucilia Wang

Duke Energy (NYSE:DUK) said it won a concession from the North Carolina Utilities Commission Wednesday and would now go forward with the $50 million project to install 10 megawatts worth of solar energy systems on the rooftops and grounds homes, malls, warehouse, schools, etc.

"We finally have a solar program!" said Duke spokesman Dave Scanzoni.

The Charlotte, N.C.-based utility has good reason to be pleased. The project caused Duke a serious headache when the utilities commission approved the project last December but added conditions that would limit the utility's ability to recover the project's costs. The commission said it imposed the conditions because the proposed cost by the utility was higher than what could be achieved by an independent power project developer.

Duke said the decision would force it to violate federal accounting rules governing how it could take advantage of a federal solar investment tax credit.

That wasn't the only setback. The project actually began as a $100 million, 20-megawatt proposal announced in June last year. Duke had to cut it in half after some of its commercial customers and consumer advocates criticized the project for being too expensive and unnecessary to meet the state's renewable energy mandate

The project is unusual because up until now, utilities have typically signed power purchase agreements with companies who then bear the responsibility of constructing, owning and operating the systems. Duke plans to own and operate the systems. Southern California Edison also has started a similar project.

On Wednesday, the commission agreed to eliminate a language in its December decision that questioned whether Duke was prudent in deciding to build the project itself when the project could be done at a lesser cost, the commission said. That language could've penalized Duke later when it seeks to recover costs by raising rates.

Duke will spend the next several months scouting out locations for installing the solar energy systems, Scanzoni said. The utility hasn't decided whether to hire one or multiple companies to carry out the project, but it's more likely to get more than one vendor in order to experiment with different types of solar technologies, Scanzoni said.

Installation would start before the end of the year and be completed by the end of 2010, Scanzoni said.

Source: Sunny News for Duke as $50M Solar Project Moves Forward