Student Corner: Solar Powers Economic Development in NC

Community and Economic Development – Blog by UNC School of Government

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Student Corner: Solar Powers Economic Development in NC

By CED Program Interns & Students

Published March 3, 2016

The solar industry in North Carolina has grown exponentially since the state adopted its bold renewable energy policy in 2007. The combination of a 35-percent state tax credit on renewables, including solar, wind, hydroelectric and biomass, and a 30-percent federal tax credit contributed to the creation of over 4,000 jobs and $2 billion in direct investment across the state. North Carolina’s solar market took off. In 2014, $126.7 million in tax credits generated $717.6 million in spending. Last year, North Carolina ranked second in the country in solar construction and fourth in solar investment. At the same time, the cost of solar generation fell dramatically.

Although the NC Renewable Energy Tax Credit, which served as rocket fuel for the solar market, expired at the end of 2015, the Federal Renewable Energy Tax Credit has been extended another five years specifically for solar technologies. Another pivotal piece in North Carolina’s renewable energy policy is the Renewable Energy Portfolio Standard, which requires that 6 percent of electricity sold by investor-owned utilities, such as Duke Energy, be from renewable energy. This standard is set to rise to 12.5 percent solar energy generation by 2021.  Along with the reliability of the sun’s rays, conditions remain attractive for solar investments across the state.

Large corporations such as Apple and Google opened facilities in the state in part due to the the availability of a clean and diversified energy supply. Apple, Facebook and Google highlighted this and other benefits in a letter to the state legislature last year in opposition to proposed change to the state’s utility-scale solar regulations under the Public Utility Regulatory Policies Act (PURPA). Additionally, as clean energy manufacturing gains ground in the U.S., North Carolina is further poised for solar- and renewable-energy based growth.

The economic development benefits of investments in solar energy are felt not just in the urban cores but rural communities across the state. Duke University’s Center on Globalization, Governance & Competitiveness documented these benefits in a 2015 report on the solar economy in North Carolina.

On a local level solar farming offers a unique entry point into the market for communities with large tracts of unused or undevelopable vacant land within the grid. Local governments and land owners can capitalize on otherwise difficult to monetize land and create a stream of revenue without additional investments in infrastructure. Different from roof-installed solar panels, photovoltaic (PV) solar farms are large-scale networks of solar panels that generate roughly one megawatt for each five to seven acres of land. A megawatt of solar in North Carolina conservatively powers around 1,000 homes a year and last year North Carolina installed enough solar capacity to power more than 60,000 homes.   That’s a lot of acres. And large solar developers are eager to build more.

If a local government is currently considering approval of a solar farm, there is a lot to learn but not to be afraid of.

Even as solar continues to boom, town councils should expect to hear legitimate concerns from residents about the visual impact of acres of glass and metal against a rural background, and questions about the effect of solar farms on adjacent property values. Although an appraisal completed by Kirkland Appraisals (hired by Strata Solar) showed no significant impact on the property values of a 47+ acre farm in Siler City, comprehensive research on the subject has not been completed. Concerned citizens in the town of Woodland were mocked in some corners of the internet for outlandish complaints against what would have been the fourth solar farm in the area, but other communities may relate to their concerns about a loss of agricultural character.

Although farm land is not the only viable passive land that could be converted, as exemplified by Massachusetts’ conversion of roadside embankments to solar farms, the large connected acres of farmland are generally more attractive for solar farming. Ultimately, local governments maintain planning and zoning authority and can and should use their regulatory power to ensure that the solar farms are installed and maintained in a manner appropriate for the community. Local governments can also regulate the removal of solar panels and restoration of lands by the developer if and when a contract ends. (Solar farms can be broken down with relative ease and minimal or no damage to the land.)

In brief, if you are a local government official or landowner interested in having a solar farm installed in your community, there are a few things to consider:

Solar developers such as Strata Solar, 02 Energies and Sunpower Corporation will lease the land, finance and install the solar panels and sign a 15-year contract to source the generated solar energy to an investor-utility. Suitable regulation of the land can not only protect the interests of your community but also make your town more attractive to solar developers. Regulations should include everything from special permitting that will enable a smoother zoning process to end-of-life considerations. The North Carolina Solar Center (NCSC) and the North Carolina Sustainable Energy Association (NCSEA) in association with the state, UNC Chapel Hill, NC State and solar industry representatives developed a template solar energy development ordinance that may give local governments guidance as they seek to either regulate solar farming or enable the entry of solar. The template also includes basic guidelines for landowners interested in leasing out their land for this purpose.

Solar farms are a viable option for brownfields and farmlands with low-expectations for yield. Solar is abundant. There is no way we can over-consume it. With thoughtful leadership and policy, the solar boom and the growth in other renewable energy sources can power a much-needed boost in revenue for local governments, as well as the the sustainability of industry in urban and rural centers across North Carolina.

Sarah Odio is a first year Master’s candidate specializing in Economic Development in the UNC Department of City and Regional Planning and is currently a Community Revitalization Fellow with the Development Finance Initiative.