Clean, green energy policy

North Carolina’s utilities are delivering energy that is reliable, increasingly cleaner and relatively cheap in comparison to other states. And in recent years, energy is becoming a larger economic driver that employs our citizens in every county.

Innovation and free-market competition do not occur as they would in other markets. Most states across the country are served by monopoly providers, meaning there is little incentive or ability to seek innovative ways to create electricity. Yet many states are incorporating more renewable-energy resources and energy-efficiency solutions into their energy mix via new policies and regulations that work for the utilities and the consumers.

Home to the nation’s largest utility, North Carolina’s highly regulated electricity market has made great strides in the past five years in terms of increased clean-energy choices and overwhelming public support of customers. The state’s clean-energy policies, such as the Renewable Energy and Energy Efficiency Portfolio Standard (REPS law), clean-energy-friendly tax policies, and energy-saving building codes, have created business opportunities, reduced energy prices, and driven private investment and jobs in every region of our state.

In recent years, the state’s clean-energy industry has grown — even at the height of the recession. As of summer 2012, there were more than 1,100 clean-energy companies employing more than 15,200 (full-time equivalent) workers and generating $3.7 billion in annual revenues, by conservative estimates.

North Carolina’s energy sources are becoming cleaner and more diverse. The state is now home to abundant innovations, of which there are: 2,800 solar; 1,250 geothermal; 60 hydroelectric; 50 biomass and 20 wind-energy projects; and 770 LEED and 770 ENERGY STAR-certified buildings. Success stories abound, from the mountains to the coast.

Maintaining N.C’s clean-energy policies

North Carolina offers several tax credits for renewable-energy projects. Our state’s renewable-energy income-tax credits have been responsible for at least $252 million in direct investment in North Carolina from 2007 to 2011, including at least $135 million in 2011 alone, according to the N.C. Department of Revenue (see figure 1). The direct benefits of these projects plus additional job creation and indirect investments dwarf the cost of the credits ($21.7 million, five-year total) — offering a prime example of investing state dollars to greatly benefit our economy and communities across our state. 
As the state tax code is currently written, our state’s renewable-energy income-tax credits will remain in place until the end of 2015. There is, however, talk of comprehensive state tax-code reform, and legislators may evaluate the renewable-energy tax credits (and many others) for immediate repeal. The North Carolina Sustainable Energy Association strongly believes the credits are a key driver of the clean-energy industry’s success story and will work against early elimination.

Enacted in 2007, North Carolina’s REPS law ensures our electric utilities will meet 12.5 percent of our state’s electricity demand with renewable-energy resources and energy-conservation programs by 2021. The REPS law has been extremely successful and is coming in well under budget and far ahead of schedule in most cases, according to the N.C. Utilities Commission and our utilities. (see figure 2)

NCSEA was one of the lead advocates and negotiators of this legislation in 2006 and 2007 and continues to work in partnership with the utilities and regulators on its successful implementation.

NCSEA strongly believes the REPS law has also been a key driver of the clean-energy industry’s success story and will work to see that it is not negatively altered. However, some legislators continue to question the need for such a policy.

Giving customers more choices

In 2007, the REPS law opened the door to allowing limited market competition in North Carolina’s monopoly electricity market. Now we must ask: Should it serve as a foundation or a ceiling for our state’s clean-energy industry’s success or electricity customers’ access to clean-energy choices? As utility companies become increasingly familiar with conservation and clean-energy options and as technological and business innovations drive down costs, utilities will find themselves in a position to exceed the 12.5-percent clean-energy requirement. NCSEA strongly believes that giving consumers more choices — i.e., how they pay for money-saving conservation and clean-energy projects in their homes and businesses, and how they buy their electricity — is critical to the continued growth of the clean-energy industry, particularly the sector serving residential and commercial customers.

Giving consumers more choices or financing options regarding clean energy is the next step. For example, customers who want to become more energy efficient or install renewable-energy systems might need to spread out this large purchase into monthly payments via their utility bill — this is called “on-bill” financing. Another successful policy, used in more than 20 states across the country, is called “third party” financing and sales of electricity. This option allows a solar company to own, operate and maintain solar panels on a home or business owner’s roof and then sell the power generated directly to that customer. Both of these programs are not currently available in North Carolina, but NCSEA is working with legislators, regulators, the utilities and consumers to determine what could work for North Carolina, including possible pilot projects.

Joan Walker is WNC representative for the North Carolina Sustainable Energy Association. Active statewide, NCSEA is the only nonprofit in North Carolina devoted to leading public-policy change and driving market development in ways that will create clean-energy jobs, business opportunities and affordable energy. Visit to learn more or become a member.