Under a ruling by the North Carolina Utilities Commission, Raleigh, N.C., Duke Energy, Charlotte, N.C., is ineligible to recover its full costs for its $50-million solar rooftops initiative. Duke claims that under the ruling it may violate federal tax law, which could cost Duke more than $250 million in tax credits for solar and other renewable energy projects.

"That's just a risk that we can't take as a company," says Keith Trent, Duke's chief strategy and policy officer. "Unless the terms are revised, we don't really see a pathway that would work for us in pursuing this program."

Duke proposed installing solar arrays on up to 400 rooftops, from commercial buildings to homes. The panels would produce 8MW of electricity, enough to supply about 1,300 homes. According to Duke, this would be the nation's second utility trial of solar distributed generation. In addition, the solar-rooftops program would go a long way in helping the company meet the state portfolio standard, requiring utilities to obtain an increasing percentage of their power from renewable energy sources. Duke is also looking to buy electricity produced by larger, ground-based solar arrays.