North Carolina governor Patrick McCrory signed a one-year extension of the state’s renewable energy investment tax credit last week, a move that will encourage more solar development within the state, which is now 4th in the nation for installed solar capacity. The law will now expire on January 1, 2017, unless it is extended again.
“Renewable energy is an important part of an all-of-the-above energy policy that produces clean power, creates jobs, and generates revenue in communities that need it most,” McCrory said in a statement at the bill signing ceremony. A study for the North Carolina Sustainable Energy Association shows that every dollar paid out by the tax credit program has resulted in $1.93 of benefit for the state and local governments.
North Carolina Is A Leader In Solar Energy
North Carolina is actually a leader in solar energy. 13 times more solar was installed in 2014 than in 2010 according to the Solar Energy Industries Association, a report in ThinkProgress notes. But most of that boom has come in the utility-scale market, which moved from 26 megawatts of capacity in 2010 to 390 megawatts in 2014. By comparison, the residential market has languished, only going from 0.3 to 4.3 megawatts during that time period.
That is primarily because North Carolina is one of only 4 states that still provides 100% monopoly status to its utility companies by prohibiting third-party sales. That means a homeowner can buy a solar panel system and pay for it upfront but is prohibited from entering into a lease or purchase agreement with a third party like SolarCity.
Third-party power purchase agreements are what are powering a boom in solar power around the country. Large companies like SolarCity have the leverage with lenders to borrow money at favorable rates. Many banks think individual requests to borrow money for a home solar system are like personal loans. They often want 12% interest for folks with good credit and things go up from there. (Note that some banks and organizations are now offering more attractive solar loans, such as Admiral’s Bank, Mosaic, and Dividend Solar.)
Not surprisingly, Governor McCrory worked for the state’s largest utility company, Duke Energy, for 30 years before entering politics. Unlike Pacific Gas & Electric in California, which has established itself as one of the most progressive utilities in the country, Duke Energy has earned a reputation as a hard-nosed opponent of residential solar power in North Carolina and every other state where it does business.