Commentary

Hopeful sign: Business and environmental interests coming together on solar power

Spencer Nelson, a senior at UNC Chapel Hill and Chair of the Renewable Energy Committee in Student Government, recently authored the following essay highlighting some hopeful news on the renewable energy front:

Solar powerWin-win legislation would promote solar energy through market forces
By Spencer Nelson

Both business interests and environmental advocates are enthusiastic about two bills currently making their way through the North Carolina General Assembly that would help to sustain the growth of the state’s clean energy industry and provide more energy options to North Carolinians.

House Bill 245, “The Energy Freedom Act,” would allow the purchase of electricity from sources other than the local public utility, beginning the process of electricity deregulation in North Carolina. Currently, North Carolina is one of only five states that still have a complete ban on “third party sales” and it’s holding back the growth of renewables.

Third party sales simplify and reduce the price of renewable energy, especially solar. Residents or companies that want to buy solar energy enter a purchase agreement with a solar company like SolarCity. The solar company owns the panels and takes care of financing, while the consumer pays a monthly fee for energy from the solar panels. This bill allows cheap renewable energy without consumers worrying about taking out loans to buy panels or performing maintenance on their system, leaving the tricky aspects of solar energy to professionals.

In addition to helping North Carolina solar consumers, the Energy Freedom Act would have many positive effects on the economy. Even with strict controls on energy markets, North Carolina was second nationally in solar installations in 2014, with 397MW of new capacity. Allowing the third party sales model here would invite new entrants into the clean energy sphere and encourage additional clean energy research. Third party sales are the preferred method for many companies, and represent 90% of solar installations in New Jersey, and over 60% of installations in California, Arizona and Colorado.

A coalition of 10 large companies with operations in North Carolina including Target, Cargill, Walmart and Lowe’s wrote a letter in support of the bill, saying “The availability of competitive renewable energy choices is also a key factor for many of us when we choose where to do business. While regulated utilities can and sometimes do offer attractive clean energy options, we believe that choice and competition in the renewable energy sector is as important as it is in the many other aspects of our businesses.”

The North Carolina clean energy industry currently has 22,300 full time employees at 1,200 firms, with annual revenue of $4.8 billion. The number of clean tech jobs has grown by 25% in the past two years. Clearly this is a rapidly growing part of the NC economy, and H245 would foster further industry growth and attract companies from the western US that specialize in third party markets.

The other bill progressing through the legislature is Senate Bill 447. This proposal would extend the state Renewable Energy Investment Tax Credit (ITC), which currently is set to expire on December 31 of this year until December 31 2020 (2018 for solar installations greater than 1 MW). The credit is 35% off the cost of the renewable energy property, and greatly increases the affordability of solar power. Additionally, it would allow the UNC system, nonprofits and the military to finally invest in renewable energy. Because these groups are not taxed they have been unable to access affordable renewable energy. The Energy Freedom Act would allow them to access tax credits through the third party.

Previous studies have shown that every $1 of the ITC utilized returned $1.93 to state and local governments. For that reason, the state ITC of 35% should be extended. The combined influence of the state and federal ITCs (a total of 65% reduction in project cost) have figured heavily in catapulting North Carolina to its current ranking as the second most “solar state” in the U.S. Even if the Energy Freedom Act becomes law, therefore, it’s critical that the state ITC not be allowed to expire lest the state see a dramatic slowdown in the pace of solar installations. Let’s hope lawmakers see the wisdom of allowing it to continue to fuel economic growth.

One Comment


  1. LayintheSmakDown

    April 4, 2015 at 9:17 am

    I think that is a great idea to allow de-regulation. We should let the people choose if they want their power from coal or solar. Those who want the more expensive power should be able to choose it while those of us who are fine with coal power should be able to stay there. This would be a wonderful replacement for that government intrusion that requires all of us to buy expensive power even though we don’t want it.

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