Five years ago, North Carolina became the first state in the Southeast to set a renewable energy and efficiency standard. The 12.5 percent by 2021 standard is a great goal, and we should keep raising the bar.
In the meantime, by changing a key regulation, the state can bring more business to North Carolina, increase energy independence and help residents buy the power they choose without government interference.
The renewable energy industry has been a boon to North Carolina’s economy. More than 500 companies are involved in the solar industry in the state, producing components, installing solar arrays and providing thousands of high-quality, high-tech jobs. Last year, solar-cell developer Semprius opened a manufacturing facility in Henderson, where it plans to hire more than 250 employees.
In addition, North Carolina is home to over 2,000 wind industry employees. Large multinational companies, including ABB and PPG, are creating high-tech materials and technologies that keep wind turbines spinning throughout the country. Strong renewable energy standards like North Carolina’s are helping to build up supply chains and keep energy jobs here on our shores.
Renewable energy can also draw new business to the state. Apple made headlines last year when it decided to build its newest data center in Maiden. The company since has gone out of its way to procure renewable energy for the facility, but there’s just not enough green power on the grid. Instead, Apple is building the nation’s largest private solar arrays and a biogas-powered fuel cell system that will provide more than 60 percent of the data center’s power.
Apple isn’t alone in its commitment to renewable energy. In fact, a recent report from Ceres, WWF and Calvert Investments shows that a majority of Fortune 100 companies have set a renewable energy goal, a greenhouse gas reduction goal, or both.
Of course, not every company can afford to build its own power plants. As a result, the report notes that companies are increasingly entering into long-term power purchase agreements with renewable energy developers. This way, they get the power they want – often solar panels installed right on their own rooftops – without the financial and technical burden of owning and maintaining the panels themselves.
Unfortunately, this private sector solution to financing renewable energy is currently forbidden in North Carolina. Apple has the capital to build its own power plants, but many other businesses do not. Why should state law stand in the way of letting a business or homeowner use the free market to choose which electric power to buy?
If North Carolina wants to draw more businesses to the state – businesses that are committed to renewable power – it should remove this barrier to free enterprise and local energy.
North Carolina has only begun to scratch the surface of its renewable power potential. Studies show that the state has the technical potential to generate almost 22 percent of its current electricity use from solar power, and the Department of Energy projects that the state will build up 10,000 megawatts of offshore wind capacity by 2030. With better policies in place, we can unlock that potential more quickly.
Of course, there are always opposing opinions on what the future of energy should look like. Outside groups are beginning to pressure states to abandon their renewable energy standards, claiming that renewable power is more expensive than fossil fuel power.
But when renewable energy opponents criticize its cost, they’re sorely out of date. Solar panel costs have dropped by about 80 percent over the past five years. And once a solar or wind farm is constructed, there’s no long-term cost for fuel. Coal and natural gas prices can be volatile, but the wind and sun are always free. In fact, last February, Michigan regulators found that building renewable energy resources costs less than new coal-fired power.
Keeping a strong renewable energy standard is good for jobs and businesses, and it’s time the state allow citizens to buy the power they want by allowing independent power purchases. When you get beyond short-term thinking and start looking at long-term value, it’s clear that renewable energy is the right investment for North Carolina.
Matthew W. Patsky is CEO of Trillium Asset Management, based in Boston but with offices in Durham.