Light on NC Solar Industry Focused on Ending Preferences
North Carolina's rapidly-growing solar industry has an unwanted spotlight upon it from a cadre of fiscal conservatives at the General Assembly fixed on ending its preferential tax and energy policy treatments.
"It's very simple: do you believe in subsidizing a special interest off the backs of our taxpayers or not?" Rep. Chris Millis, R-Pender, a fierce critic of the state's solar policies, asked colleagues during a recent debate.
Millis and like-minded Republicans are in a full-court press this year to freeze portions of a 2007 law that are raising over time the percentage of retail sales that electric utilities must originate from renewable energy sources and energy efficiencies, reaching 12.5 percent in 2021.
Freezing the percentage at the current 6 percent has been actively debated in no less than three bills, including one that passed the House this month and another fast-tracked last week through two Senate committees. The maximum amount Duke Energy and other electric power suppliers could charge each residential customer to help them comply with the law also would be kept at $12 annually.
House Majority Leader Mike Hager, R-Rutherford, who has led the charge against the Renewable Energy Portfolio Standard, says a study also is needed to examine whether it should be dismantled or further changed.
"What we want to do is see if that's the right decision looking back eight years later," said Hager, a former Duke Energy plant engineer.
The standard has created a ready-made market for renewables, but critics say it's time for solar to rise or fall on its own. The solar industry says it's not right now to change the mandate, saying industry investors will go elsewhere if they're unsure utilities will need more alternative power.
Capping the standard would say that "changes can be made abruptly, and that investments that those industries have made here in North Carolina are at risk," said John Morrison, chief operating officer with Ecoplexus, which builds and installs solar systems.
Industry advocates attribute the state's solar policies for making North Carolina first in the South and fourth nationwide in completed solar investment, with 450 companies supporting more than 4,000 jobs, according to a report from a center at Duke University.
Joel Olsen, founder of O2energies in Cornelius, has developed 13 solar projects across North Carolina. He expects 300 workers on a pending 28-megawatt project in rural Montgomery County.
The industry "can continue to grow if we let everything run its course," Olsen said. Conservative groups have studies that contend the portfolio standard has led to fewer overall jobs being created in the state.
Residential electric customers currently are basically paying an amount equal to pocket change in their monthly bills to help utilities meet the standard. Businesses and manufacturing plants pay more — and every little bit gets passed on to consumers, Hager said. An RTI International study, however, calculated the portfolio standard is resulting in overall savings on customers' bills in cheaper power.
Solar also was discussed during last week's debate on the House budget, which extended a credit for investing in renewable energy property set to expire at the end of 2015 for another two years. A floor amendment to let the credit expire was defeated.
Annual Department of Revenue reports show tax filers took $127 million in credits processed in the 2014 calendar year based on $718 million in renewable energy spending, compared to just $53.4 million in credits the year before. Duke Energy took nearly half the credits in 2014, a report said.
The RTI study, prepared for the North Carolina Sustainable Energy Association, found renewable energy projects has generated 54 percent more government tax revenues than the credit itself had paid out.
Hager said he's not pushing for changes on behalf for his former employer, saying he just wants low-cost electricity for constituents and industry. Duke Energy hasn't spoken out for or against many provisions being debated, except for the study requirement, which it supports to examine many renewable energy issues, company spokesman Randy Wheeless said.
"All issues should be on the table," Wheeless said by email.
This year's outcomes may rest in the state Senate, which doesn't seem to be of one mind on the portfolio standard.
"There is no consensus," said Senate Rules Committee Chairman Tom Apodaca, R-Henderson.
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