Matt Abele, director of marketing and communications at the North Carolina Sustainable Energy Association, said one of the main reasons for the growth of solar in the 2010s was the compounded benefits of both state and federal tax credits.

A 35 percent state tax credit was passed in 1999, and the federal tax credit was expanded to 30 percent in 2005. As of 2021, the federal tax credit was 25 percent, and will be gradually reduced in the coming years. The North Carolina tax credit expired in 2017, but between 2005 and 2017, North Carolina residents were eligible for a 65 percent return on the costs of solar panel installation, making solar energy more accessible and popular throughout the state.

Policy Overview

Another influential policy was the Renewable Energy and Energy Efficiency Standards (REPS), passed in North Carolina Senate Bill 3 in 2007. REPS created a renewable energy requirement for utilities and municipalities that further promoted the use of solar in North Carolina.

“I would say really the biggest and probably most instrumental piece of legislation here in North Carolina was Senate Bill 3,” said Abele. “It required investors in utility, like Duke Energy, and electric municipalities throughout the state to utilize a certain percentage of renewable energy within their generation mix.”

By 2017, North Carolina was the second state in the nation for solar advancement. But according to data collected by the Solar Energy Industries Association, the rate of solar installation in North Carolina peaked in 2017, and the state has since dropped to fourth in the nation.

Passed in 2017, North Carolina House Bill 589 (HB 589) included a wide range of programs intended to fuel the growth of the solar industry — some of these programs have been more successful than others.

Beginning in 2017, the rate of utility-scale solar installations in North Carolina decreased. However, the rate of residential solar installations increased steadily through 2020, the last complete year for which data was available, in large part because of the Solar Rebate Program established by HB 589.

According to the North Carolina Sustainable Energy Association, the amount of residential solar within Duke’s North Carolina territories more than tripled between 2017 and 2020.

Solar Certification

 As demand for solar panels in North Carolina has grown, more cities and municipalities are updating their zoning and development regulations to encourage installation of solar panels.

SolSmart is a national organization funded by the U.S. Department of Energy that certifies cities, communities and organizations for implementing optimal zoning, permitting, construction and development regulations. This certification aims to eliminate solar soft costs, which include costs created by complex permitting requirements. The updated zoning standards required by the designation process can streamline the process and signal to developers that the city is solar-friendly.

SolSmart partners with local organizations that act as advisors, providing guidance to cities as they update their policies and apply for SolSmart certification. The North Carolina Clean Energy Technology Center is currently a SolSmart Advisor. David Sarkisian, senior policy analyst at the Center, said that cities are not required to partner with an advisor, but doing so can help streamline the application process.

“We’re doing baseline assessments for cities to figure out where they are on SolSmart requirements before they go into changing anything,” Sarkisian said. “We give them advice on possible changes to their zoning codes, and we can also hold trainings for city staff.”

At least 10 counties and cities in North Carolina have received SolSmart designations, according to the organization’s website.

Looking Forward

The most recent piece of energy-related legislation in North Carolina is House Bill 951, which was passed in October 2021 and was expected to have major implications for the renewable energy landscape in North Carolina.

Marshall Conrad, director of government relations at Strata Clean Energy, formerly known as Strata Solar, said that it’s too early to tell what the exact effects of the bill will be, but that it has the potential to increase the rates of utility solar installations in the state.

“The bill is wide open and leaves so much discretion to the [North Carolina] Utilities Commission to decide how we move forward,” Conrad said. “I think that’s both a positive and a negative to some extent.”

As of June 2021, the Bill had received criticism from several environmental groups, including the Southern Environmental Law Center and the Environmental Defense Fund. One of the primary concerns, according to an October 2021 article by the Southern Alliance for Clean Energy, is that although the bill sets important goals of carbon reduction and minimizing consumer costs, the language may not be specific enough to be enforceable.

“A lot of the onus was put on the Utilities Commission to determine next steps for implementation,” Abele said “It’s still to be determined how it’s going to affect the industry.”