North Carolinaâ€™s clean energy industry is fueling growth across the state. Valued at $6.4 billion, the sector boasts nearly 34,000 jobs â€” up 31 percent since just 2015. Solar and energy efficiency boots the economy, generates new tax revenue, creates lucrative profits for developers and save ratepayers money â€“ all while conserving North Carolinaâ€™s land and air.
While solar is going gangbusters now, can it continue to thrive? What dynamics could sustain such growth? At TerraSmart, we believe innovation and technology are what itâ€™s going to take to keep clean energy driving forward.
Clean energy gives life to 1,000 companies in the Old North state
According to the North Carolina Sustainable Energy Association (NCSEA), there are about 1,000 firms across the renewable energy and energy efficiency sectors, including solar, wind, storage and the smart grid. For nine years, the non-profitâ€™s Clean Energy Census has taken the pulse of this thriving market to measure its impact. The two top performers include:
Policy drives solarâ€™s quick rise
Solar has flared in North Carolina, where utility-scale installations have helped make it number two in solar, just behind California.
Market dynamics like falling commodity prices for agricultural crops and tech company demands for cheap land and power have been decisive factors for regulators and policy makers to put solar-friendly incentives in place.
In 2007, North Carolina became the first Southeastern state to adopt a renewable energy portfolio standard (REPS) that mandates increases in renewable energy production. Today, 28 other states have adopted the standard, too.
But with a renewable energy target of 12.5 percent, it trails far behind states like Hawaii that are pushing toward a 100 percent renewable target. There is still plenty of room to grow; solar generates only three percent of the stateâ€™s electricity at the moment.
Government incentives also played a key role in boosting solar farms by granting developers tax credits equal to 35 percent of their projectsâ€™ costs through a program that expired at the end of 2015. These credits helped drive solarâ€™s expansion, brought in tax revenue, and encouraged solar investment of $4.4 billion over the ten year program.
North Carolina is not alone in dropping its tax credit program, however. Many states let their programs expire as regional solar markets began to flourish.
While it still ranked second place based on total solar installed, North Carolinaâ€™s new installed capacity dipped to fifth place in 2016, down from second the previous year. But analysts put the state back on map with over one gigawatt projected for 2017 and 3.7 gigawatts projected over next the 5 years.
Farmers reap solar crops in the Old North State
As proven in the worldâ€™s solar markets, incentives work. Since its adoption, North Carolinaâ€™s REPS saved utility customers $162 million through investments in low-cost, clean energy resources. The stateâ€™s tax credit also contributed to the development of utility-scale solar, which makes up most of the three gigawatts of solar capacity in North Carolina today.
One gigawatt has come from converting farmland into lucrative solar farms. In 2016, solar installations occupied about 9,000 acres of former agricultural lands. While thatâ€™s a negligible portion of North Carolinaâ€™s 4.75 million acres of cropland, it sets and important trend thatâ€™s likely to continue.
The rise in solar came as crop prices, other than tobacco, dropped in the Southeast. Crops like cotton and soybeans have fallen by 70 and 30 percent respectively. Because solar projects offer stable income not affected by commodity markets, the appetite for PV production is still going strong.
Tech giants push North Carolina to new solar heights
The solar market has thrived as tech companies have moved in to take advantage of local incentives and some of the lowest electricity prices in the country. Giants like Apple, Google and Facebook are on the way to powering their data centers with 100 percent renewable energy.
Data centers, known for using massive amounts of power, are driven by consumersâ€™ voracious digital appetite. So itâ€™s no surprise that managing data accounted for seven percent of global electricity usage in 2015, and could climb to as high as 12 percent by this year. Some of the top solar buys in the state include:
Dukeâ€™s stellar solar position starts to dim
Duke Energy owns and operates about 500 megawatts of solar capacity in North Carolina, both through its regulated utilities and Duke Energy Renewables, its independent power producer. It utility recently invested more than $4 billion in clean energy and plans to invest $3 billion more over the next five years.
In addition to building its own, Duke has been driving solar deployment through the acquisition of more than 700 large-scale solar facilities around the state â€“ adding nearly 1.7 gigawatts of solar capacity.
In 2017, Duke plans to add 400 megawatts of new capacity in the Piedmont and western portions of the state and has also scheduled to begin operation at its 60-megawatt Monroe Solar Facility in Union County.
Analysts expect a strong 2017 in North Carolina, but Duke has begun to introduce new barriers that pose a concern to utility-scale developers. It says at least a dozen of its 1,500 substations may require grid upgrades to handle solar, which could run from a few thousand dollars to a few hundred thousand dollars each.
The utility also wants to ban third-party sales of solar and would like to make developers compete for the right to build new farms. Under its proposed changes, developers would have to respond to utility requests and bid for solar projects â€“ a controversial model that has been used successfully in California and Georgia.
Not only that, but under a recent proposal to the North Carolina Utilities Commission, Duke would pay about 30 percent less for solar energy, limit standardized contracts to installations of 1 megawatt or less and limit contract terms to 10 years.
TerraSmart is the right partner for profitable solar
While uncertainty remains, 2017 looks strong for North Carolinaâ€™s solar developers and TerraSmart is poised to help drive profitability in utility solar.
Duke bought the TerraSmart-built Gaston project in 2016 to add 7.1 megawatts to its growing portfolio. TerraSmart expedited construction on the project siteâ€™s steep, undulating terrain with its new TF2 flexible racking system, built on years of success managing grade tolerances up to 36 percent.
Thanks to its innovative racks and terrain expertise, TerraSmart can cut installation time by more than one-third to get utility-scale facilities online faster. To stay on top in todayâ€™s hyper-competitive environment, developers need ingenious ways to save costs, protect vulnerable margins and offer the most competitive levelized cost of energy.
EPCs and developers gain momentum with the right racking partner. TerraSmart drives profitability with industry-defining racks and turnkey construction to shave costs and tighten schedules, which means fast turn-around in an uncertain market.
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