N.C.’s Legislative Wrangles Over Solar Highlight Role Of States

According to Ivan Urlaub, executive director of the North Carolina Sustainable Energy Association, North Carolina - which has been a renewable energy leader in the Southeast, particularly with regard to solar - is facing a rollback of some of its most successful renewable energy policies.

The most important of these policies, the state’s generous 35% investment tax credit (ITC) - not to be confused with the 30% federal ITC - has been the subject of intensive debate during North Carolina’s long legislative session.

The good news, Urlaub says, is that a provision for a two-year extension has passed the state House of Representatives. The credit is also in the budget as drafted by Gov. Pat McCrory earlier in the year. As passed by the House, the bill provides a two-year extension of the 35% ITC for all of the eligible resources - although the credit for solar larger than 1 MW steps down to 25% in the second year.

The bad news, Urlaub says, is that the Senate’s finance committee just approved another bill (H.B.332) containing several measures considered a detriment to the solar sector: one that would freeze North Carolina’s renewable energy and energy-efficiency portfolio standard (REPS) at 6% and another that would weaken provisions of the standard-offer power purchase agreement (PPA). The key aspect of the modification would reduce the maximum size of projects covered under the standard-offer PPA from 5 MW to 100 kW.

A third provision says that in years when a public utility is not required to add capacity according to its integrated resource plan, it will not be obligated to make capacity payments as part of the avoided cost arrangement.

Moreover, Urlaub says there were some irregularities attending how the bill was handled in committee that may have to be resolved. The issue, as reported by the News & Observer, is over how the finance committee chairman pushed the bill through on a voice vote.

The REPS and standard-offer PPA provisions were added to the bill that passed the Senate finance committee, Urlaub says, due to political considerations in the wake of a successful effort to prevent the elimination of the state’s 80% property tax abatement for solar. Project developers claimed that if the provision was enacted, they would have to take out operating loans to pay the debt service on existing investments.

“Essentially, that would bankrupt some of the fastest-growing and most successful companies in the state overnight,” Urlaub says.

Opposition to eliminating the 80% tax abatement coalesced around this argument, and the provision was dropped. However, issues of avoided cost payment and modifications to the standard-offer PPA were introduced to compensate.

Be that as it may, Urlaub says the maneuvering highlights how a number of independent renewable energy policies are coming under threat at the state level. States are emerging as the key forums for advancing, protecting and even dismantling policies that have supported the growth of state solar sectors. “The big takeaway is if we maintain our suite of policies and other states don’t, it creates an inherent competitive advantage for the industry to base here and grow here,” he says.

The issue has national implications. Apple, Google and Facebook sent state legislators in North Carolina a letter opposing H.B.332. The tech industry giants, writing to the leaders of both houses of the General Assembly under the aegis of nonprofit TechNet, assert their standing as major employers and electricity consumers in North Carolina. They take issue with measures in the bill that would appear to weaken the state’s REPS and standard-offer PPA.

“As global companies providing services to consumers around the world from our operations in the state, a reliable, sustainable electricity supply is critical and requires sourcing power from renewable energy,” the letter says. “In fact, the right and ability to access power from renewable resources is not merely a goal, but an expectation.”


TASC Wants Action On Property Tax Bill For Solar In South Carolina

The Alliance for Solar Choice (TASC), which comprises Demeter Power, Silevo, SolarCity, Solar Universe, Sunrun, Verengo and ZEP Solar, is urging South Carolina’s legislators to take action on a property tax bill to protect a landmark solar act.

The TASC, along with Duke Energy, the Office of Regulatory Staff and other clean energy stakeholders, recently reached a settlement agreement to help bring more solar to South Carolina.

According to the TASC, the settlement agreement represents a significant milestone in the implementation of the legislature’s landmark solar legislation, Act 236, which unanimously passed last year.

However, the TASC says, both this settlement agreement and the success of Act 236 are at risk if the legislature fails to pass S.B.626 - a property tax fix bill - in the few weeks remaining in session.

S.B.626, sponsored by Sen. Greg Gregory, grants a property tax exemption to homeowners who have solar systems on their rooftops. In some counties, the property tax increase for those who invest in home solar could amount to as much as 50% of the rebate - pursuant to the settlement agreement - that Duke will offer its customers.

“Currently, counties in South Carolina do not collect property taxes on residential solar. S.B.626 simply codifies existing practice in the state,” says Tyson Grinstead, senior manager of public policy at Sunrun Inc. “The solar industry can’t count on counties to maintain their current, discretionary practice. We need a permanent solution that businesses can use to set accurate expectations for homeowners. We don’t want homes or businesses to be hit with unexpected tax hikes because they invested in solar.”


Hawaii Enacts 100% Renewable Portfolio Standard

Gov. David Ige, D-Hawaii, signed a bill into law that mandates state utilities to procure 100% of their electricity from renewable energy sources - making Hawaii the first U.S. state to require such a mandate.

H.B.623, “Relating To Renewable Standards,” increases Hawaii’s renewable portfolio standard to 30% by 2020; 70% by 2040; and 100% by 2045. The legislation was introduced in January by Rep. Chris Lee, D-District 51, and chairman of the House Energy and Environmental Protection committee.

“As the most oil-dependent state in the nation, Hawaii spends roughly $5 billion a year on foreign oil to meet its energy needs,” Ige says. “Making the transition to renewable, indigenous resources for power generation will allow us to keep more of that money at home - thereby improving our economy, environment and energy security. I’d like to thank the Senate and House Energy Committee chairs for championing H.B.623 and ensuring that Hawaii remains a national leader in clean energy.”


Loan Programs Office Director Peter Davidson To Step Down

Peter Davidson, executive director for the U.S. Department of Energy’s Loan Programs Office (LPO), is stepping down to return to New York and pursue new opportunities. His successor, Mark McCall, is due to take over this month.

Davidson, who accepted the position in May 2013, is credited with transforming the once-troubled financing program into a success.

In a letter announcing his departure, Davidson wrote the following:

“I am very proud of what LPO has accomplished over the past two years. When I first joined LPO in May 2013, the program was at a crossroads. We had not issued a new loan in more than two years, could not accept any new loan guarantee applications, and many of the projects in our more-than-$30 billion portfolio were still under construction.”

To date, there are 22 clean energy and automotive projects financed by the LPO that are currently operating. The LPO notes that the projects have also already repaid more than $5.4 billion, including more than $1 billion in interest payments to the U.S. Treasury, while nonperforming loans account for less than 3% of the portfolio. S

Policy Watch

N.C.’s Legislative Wrangles Over Solar Highlight Role Of States




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