Empowering Western NC and Upstate SC with Solar Since 1995

Salutations Readers. As the direction of clean energy in NC will be critically impacted by the outcomes of several pending legislative issues, we would like to focus this blog  on the current legislative landscape for renewables in North Carolina.There are 3 areas of pending legislation that could really change things for North Carolinians: The Renewable Energy Investment Tax Credit, The effort to repeal the Renewable Energy Portfolio Standards, and The Energy Freedom Act.

According to the Solar Energy Industry Association, last year North Carolina is in second place, behind California, for new solar project installations in the United States. It is believed that 2014 had 22,995 people employed directly in clean energy jobs. This includes jobs in geothermal, biomass, wind, energy efficiency, solar, and hydro-power sectors. This figure does not include the many indirect jobs. Renewable Energy offers a sustainable, healthy and viable way forward for our state. It will take education, effort and citizen participation to keep our state renewable energy friendly. Policies like the Renewable Energy Investment Tax Credit and the REPS have created a favorable environment for the growth and success of renewables. We’d like to see North Carolina take the lead in installed solar, we think you would too.

We’d like to give a shout out to NCSEA – the North Carolina Solar Energy Association for all of their amazing and relentless work on behalf of solar for North Carolina. They always have the most current information on all things solar. Check them out. Also, NC WARN is on the frontlines of keeping us informed on issues and giving us ways to take action. In this issue of our newsletter, rather than moving to the “Action You Can Take” section, you’ll find the action you can take in each update.

The Renewable Energy Tax Investment Credit

The North Carolina Renewable Energy Investment Tax Credit was established in 1999 and has been renewed in 5 year increments since. Currently, the tax credit will expire on 12/31/2015. The credit can be taken against both personal and corporate income tax. The credit amount is 35% of the eligible installation costs up to 50% of a taxpayer’s tax liability. The commercial credit is limited to $2.5 million per installation and must be taken in five equal annual installments. Click this link here to see what resources are eligible for the tax credits as well as more details about the tax credits.

As of this week, the Senate has delayed the rollout of the proposed budget but it is anticipated later this week. The Senate is considering the House budget (HB97) which includes a 2 year extension of the tax credit.

At this point in time, the most helpful thing you can do is to contact your Senators (now- don’t put this off) and let them know that you want them to support an extension of the Renewable Energy Investment Tax Credit. If you are unsure of your Senators, or how to best contact them, use this link . This is a great campaign to involve friends and family in as well.

Renewable Energy Portfolio Standards

The growth of NC’s solar industry was spurred significantly in 2007 when NC passed Senate Bill 3 and adopted a Renewable Energy and Energy Efficiency Portfolio Standard (REPS.) This bill mandated that  Utilities generate 12.5% of their energy through renewable resources. The North Carolina General Assembly prioritized the use of solar electric/thermal and swine and poultry waste with “set-asides” for each. The solar industry met its targeted set-aside of at least 0.07% in 2012 much more quickly and cost-effectively than could have been predicted, and has led to significant economic impact and job creation in our state.

House Bill 332, Energy Policy Amendments, would stall the standards at 6 percent. Initially introduced to address cost recovery for natural gas utilities, the REPS amendment was added later. The North Carolina Sustainable Energy Association (NCSEA) and the national group Advanced Energy Economy (AEE) oppose the proposed changes to REPS. Several AEE member companies working in North Carolina’s nascent but growing solar market issued statements against the “job-killing” legislation. “H332 is unfair to the entire ecosystem of local businesses who supply solar in N.C. This bill threatens many of the 23,000 jobs and the $4.8 billion in annual revenue that have been created in N.C. thanks to the REPS,” said Melanie Santiago-Mosier, director of government affairs for SunEdison. “It would disqualify many solar projects from longstanding benefits that make clean, renewable energy valuable for owners, on grounds that are arbitrary and capricious. Changing the rules of the road like this is anti-business and anti-consumer.”

The bill passed in the House and was sent to the Senate in late April. Language on reforming the REPS contained in H332 also exists in HB 760, the state’s omnibus regulatory reform bill, which is currently making its way through the state Senate. A third bill with the same language (HB 681) failed in the state House in late April.

NCSEA’s Legislative Weekly reported on Friday, June 12, that there was no movement that week on these bills. Time is of the essence to reach out to your Representatives asking them to oppose House Bill 332 and any energy policies that put our clean energy future at a stall.

The Energy Freedom Act – Third Party Sales

The Energy Freedom Act, introduced in March as House Bill 245, would allow third-party sales of electricity. Currently, NC is one of five states that prohibit the sale of electricity by any other entity than the Utility company. Adoption of this Bill would introduce market competition to the current utility monopoly by allowing solar leasing options by renewable energy companies.

The leasing model has been very popular in states like California where companies like Solar City and Sungevity have been very active. According to GTM Research, two out of three new residential solar installations in the US were third-party owned in 2013. Leasing has expanded the penetration of solar significantly in mid to lower income households as it eliminates the upfront costs of purchasing.  Customers enter into a long-term contract and ownership is maintained by the solar company. While this model has undeniably led to more widespread adoption of solar energy systems, the benefits and disadvantages need to be weighed carefully against direct ownership itself. For customers who can take advantage of tax incentives and have the financial resources or financing to purchase the system themselves, direct purchase may offer greater financial savings.

However, as pointed out in a recent blog by NCSEA entitled “In NC, Everyone Can Win with Third-Party Sales of Electricity” leasing would be a boon to our military facilities and university system. Government institutions, non- profit organizations, faith communities, and others that can’t directly benefit from tax credits may find that a leasing contract offers an opportunity to bring clean energy generation to their facilities.  Large corporations such as Wal-Mart, Target, Lowes and Family Dollar support the legislation, and interestingly, Duke Energy Renewables, the unregulated arm of Duke Energy, recently made a major investment in REC Solar, a leading third-party solar company.

NCSEA reports that action has been taken on this legislation these past few weeks, but support for this bill is growing every day.  Call Your Legislator and ask them to support House Bill 245 today.

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