Solar Makes NC Cleantech Shine, But Tax Credit Expiry Clouds Future
While biotech and software are the sectors commonly associated with North Carolina innovation, cleantech has quietly emerged as its own economic bright spot.
North Carolina’s renewable energy capacity now totals more than 1 gigawatt, making it the fourth state to cross that threshold. Much of the growth has come from solar installations. North Carolina’s 396.6 megawatts of solar installations in 2014 was second only to sunny California, according to the Solar Energy Installations Association.
Solar’s growth in North Carolina is bolstered by two forces: state policies that incentivized renewable energy projects and the rapid price decline of photovoltaic panels, explains a Pew Trusts report. North Carolina remains the only Southeastern state with a renewable energy portfolio standard, a requirement that utilities obtain a certain percentage of their power generation from renewable sources. Solar projects benefit from a 35 percent state tax credit that make new solar installations more attractive investments. Clean energy projects generated more than $2.6 billion in revenue between 2007 to 2013, compared against $135.2 million in state incentives offered for such projects in that period, according to the North Carolina Sustainable Energy Association.
But some in the solar industry now wonder how the loss of government incentives will affect solar’s growth. North Carolina lawmakers did not extend the state’s renewable energy tax credit, set to expire at the end of 2015. Renewable energy projects will also see a reduction in the federal tax credit, which will drop from 30 percent to 10 percent at the end of 2016.
“We don’t know what that’s going to mean,” says Ivan Urlaub, executive director of the NCSEA. “We do know that residential scale and small commercial scale clean energy systems of all types and sizes were eligible for our tax credit and not necessarily eligible for federal incentives, and we’ve seen marked and consistent growth across all of those tech areas … we attribute that to the [state] tax credit.”
Urlaub says much of the growth in solar installations have come from residential and commercial builders taking the initiative to include more solar in their construction. Duke Energy (NYSE: DUK), a longtime target of environmental groups critical of the utility’s coal-fired power generation, has also embraced solar. The Charlotte, NC-based company now operates 21 solar farms—10 in North Carolina—producing more than 150 megawatts of power. Duke’s new solar construction includes a 65 megawatt project in Warsaw, NC, that will become the largest solar farm east of the Mississippi River.
Duke sees growing renewable energy demand from some of its largest customers—technology companies now making reducing carbon footprints part of corporate sustainability initiatives. Apple’s (NASDAQ: AAPL) 20 megawatt solar farm alongside its data center in Maiden, NC, offsets its Duke power consumption. Amazon (NASDAQ: AMZN) is building … Next Page »