Solar's Future In NC Hangs In Balance Over Tax Credit

Aug 25, 2015

A solar farm near Chapel Hill.
Credit Dave DeWitt / WUNC

Solar installation companies are calling on Duke Energy and the General Assembly to continue a tax cut they say is key to their future.

When combined with a 30 percent federal tax break, the state’s 35 percent tax credit has propelled North Carolina to become one of the top four states in the country for installed solar capacity, behind only California, Arizona, and New Jersey.

That credit is set to end in December. The state House budget includes an extension; the Senate does not.

“The tax credit, especially over the last five years, has really played a big part in making sure a lot of projects happen, a lot of capital gets spent, and a lot of improvement happens to the grid,” says Jason Epstein, the Executive Vice President of Baker Renewable Energy in Raleigh.

Baker Renewable Energy is one of four solar installation companies that wrote an open letter to Duke Energy, asking the company to use its influence to convince lawmakers to extend the tax credit.

“Our industry has worked hard to make solar affordable for more North Carolina residents and business owners, and we’ve been very successful,” reads the letter. “We have all but lost the ability to commit to finishing many system installations by year’s end – and we are only eight months into this tax year. This has never happened before and threatens millions of dollars of lost revenue for solar companies like ours.”

Duke Energy responded to the letter, saying it will not get involved in the debate over extending a solar tax credit.

“The tax credit for solar has been going on for a number of years,” says Randy Wheeless, a spokesman for Duke Energy. “We’ve benefited from that, but eventually it does have to end. So if the General Assembly thinks that should be this year, so be it. If not, we can live with that, too.”

Duke Energy has invested in its own solar installations, to the tune of $500 million in North Carolina alone, and has been the single largest beneficiary of the state tax credit. But in recent years the company has also gone before the State Utilities Commission in an effort to cut the rate it pays for solar electricity, and it has come out against third-party sales and net metering, two policies that could grow the industry even more.

The solar industry currently supports about 6,500 jobs in the state.

“All of those jobs are in jeopardy with the planned expiration of the tax credit at the end of this year,” says Kathy Miller, co-founder and CEO of Yes! Solar Solutions in Cary.

At a press conference earlier today, faith leaders also spoke out in favor of extending the tax credit.

Rev. Richard Edens, Senior Pastor of the United Church of Chapel Hill, calls for an extension to the solar tax credit.
Credit Dave DeWitt

“Extending tax credits for solar installation is an opportunity to care for creation by reducing our carbon footprint,” said Reverend Richard Edens, Senior Pastor of the United Church of Chapel Hill.

His congregation donated about $250,000 to install enough solar panels on the roof of the church to produce around 50 percent of the building’s electricity needs.

The state House and Senate are currently debating the tax credit as part of budget negotiations. A final budget isn’t expected for several weeks.