There is a lot going on this year in the NC legislature that will impact the energy efficiency, renewable energy, and green building industries, and much of it is not good. If you hate politics as much as I do, you may not be fully on top of all this, but it’s time to make an exception and call your state legislators.
REPS under attack
REPS (renewable electricity portfolio standards) are under attack in the state, and the situation is pretty dire. The purpose of the REPS law is to require that our regulated monopoly utilities include a minimum percentage of renewable energy in their portfolios. They can meet it with a combination of funded energy efficiency projects and wind or solar power. This is an existing law that currently requires 6%, but is set to step up to 10% in 2018 and 12.5% in 2021. The proposed legislation acts to “freeze” the REPS at the current level. NC policy watch recently called it the “most outrageous and destructive, greed-based attack of 2015”. This bill is so bad that even Duke Energy (the theoretical beneficiary) has remained officially “neutral” on it.
- A “freeze” is worse than it sounds because it largely means that the utilities don’t have to do anything that they haven’t already done. If they fund energy efficiency projects or build a solar farm, it keeps producing those savings for them. So, if we freeze where we are, the great energy efficiency rebate programs we enjoy are in danger of going away.
- This is not about “free markets”. Electric utilities in NC are regulated monopolies. Consumers do not have a choice about where they buy electricity. Allowing these companies to pay slightly less for electricity generated by coal does not benefit the citizens of the state, particularly those who breathe the air or live near coal ash ponds, as we’ve recently learned.
- Fossil fuels aren’t cheaper than renewable energy, if you factor in the additional costs of health and the environment. These costs don’t usually come out of the power companies coffers directly, but the state can be left holding the bag.
Why is this happening? The utilities aren’t asking for it, and there are no real winners in the state if this freeze passes. Largely, it seems to be the wishes of some big-money out of state donors, and lawmakers are hoping that people won’t notice, particularly if they move it around as an amendment to various bills. Its current incarnation (House bill 332), appears to have passed committee on a very controversial vote. Some big tech companies have now noticed, and have expressed concern over the bill, which is great news. However it is an uphill climb, and things do not look good. Please contact your senators soon to voice opposition to this bill.
Renewable energy tax credit expires this year
The 35% state tax credit on renewable energy is also set to expire this year unless it is renewed. Many of our clients use this credit to install geothermal, solar thermal, solar PV, and passive solar systems. The credit has been continuously in place since the early 1970s. There is also a similar 30% federal tax credit that is set to expire next year.
The NC sustainable energy association has a great white paper that explains the credit’s benefits for the state. These tax credits have driven a lot of growth and innovation in the renewable energy sector, and to wipe them out all at once would be very disruptive. Nearly as bad would be to do a short-term extension. These are typically large projects, and people need time to plan for them. Short-term extensions tend to only reward people who would have done their projects anyway, while scaring away those who are truly on the fence and could be incentivized by the credit. It’s a terrible way to make policy.
A better phase-out plan would be to extend the credit and gradually step it down over a longer period of time. This would prevent shocks to the industry, and allow it to continue to develop as prices come down. However, if we’re going to talk about how to phase out this support for renewable energy, we should also talk seriously about phasing out support for fossil fuels at the same time. The cost of these fuels needs to fully include the health and environmental costs if we are truly going to be playing on a level playing field. Otherwise, a phase-out is just an attack on renewable energy, not a step toward a truly competitive markets.
The renewal bill is Senate bill 447. Please thank Terry Van Duyn of Buncombe county for co-sponsoring it, and encourage your other legislators to support it.
PACE clean energy financing bill may offer new opportunity
Property-Assessed Clean Energy (PACE) is legislation that allows the financing of energy efficiency and renewable energy upgrades to buildings through property taxes. North Carolina has had a PACE law for a few years, but it has been difficult to use for a few reasons. My understanding is that there have been problems related to the tobacco settlement that prevent property taxes from being assessed differently on different properties. The Fannie Mae/Freddie Mac disruption in 2010 also delayed the program from being used. And now, with the program set to expire this year, municipalities have been hesitant to spend time developing programs that will have a quick deadline. This is part of SB 284, which hasn’t been on the move much lately.
If extended and implemented by municipalities, it would provide a way for developers and property owners to finance clean energy projects using property taxes. It’s been very successful elsewhere, and it would be great to see it get a shot in North Carolina.
Both the NC Building performance association and the NC sustainable energy association issue legislative updates and will keep you posted about these important issues. If you’re not a member, consider joining.
Copyright 2015. Amy Musser.