N.C. ranked second in solar
About 115 megawatts of new solar capacity were added to the North Carolina power grid in the second quarter of 2016. In September of 2015 North Carolina reached one gigawatt of solar energy.
“The ranking is a reflection of how North Carolina has become a national leader in the solar industry, and there are many factors that have led to that,” said Steve Wall, a policy research associate at the UNC Institute for the Environment.
Wall credits the growth of solar energy in the state to policy initiatives like tax credits and Senate Bill 3, or the Renewable Energy and Energy Efficiency Portfolio Standard.
SB 3, passed in 2007, set regulatory standards for renewable energy generation in North Carolina power companies.
Wall said the bill originally required these utilities to generate three percent of their energy through renewable sources such as solar, wind, biomass and hydropower. The regulation was set to increase over time, stabilizing in 2021 at 12.5 percent renewable energy generation.
Jon Sanders, director of regulatory studies at the right-leaning John Locke Foundation, said North Carolina is the only southeastern state with such legislation.
Solar power in North Carolina has also grown due to generous tax incentives, he said.
“Up until last year, the incentives in North Carolina basically helped get investors in solar federal and state guarantees of essentially 100 percent of their investment,” Sanders said.
Power companies that utilized solar power were able to receive a 30 percent federal investment credit and a 35 percent state investment credit. Sanders said combined with the benefits of state and federal depreciation, these incentives were extremely attractive to investors.
However, the policy expired in 2015 and has not yet been renewed.
“Unfortunately, even though solar is continuing to grow, we’ve allowed the tax credits to expire in North Carolina, meaning that even though we’re second in the nation for solar, we’re really not hitting our full potential where we could be,” said Rachel Weber, the climate and energy organizer at Environment North Carolina.
Wall said the state legislature has also discussed freezing or repealing SB 3.
The lack of tax incentives and the potential reverse of SB 3 could have negative effects on N.C.’s solar industry, he said.
“If Senate Bill 3 gets repealed, that could be a game changer,” Wall said.
He said future small solar projects could be hindered by these changes. The sustainability of the current solar growth in North Carolina is also in question.
“There will probably be some more bigger projects, and the smaller projects may not happen,” Wall said. “At some point, there will be peak solar, so to speak, where things will level off or plateau rather than increasing like we’re seeing so far.”
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