Lawmakers to lay groundwork for repeal of NC’s renewables law

01/07/2014 6:29 PM

01/07/2014 11:57 PM

After failing to repeal the state’s renewable energy standard in 2013, legislators are looking at commissioning a study with the long-term aim of building a case against subsidizing green energy.

Critics expressed skepticism about solar, wind and other green energy subsidies on Tuesday at a hearing of the Joint Legislative Commission on Energy Policy. The panel is chaired by two Republicans who oppose subsidizing green power, Rep. Mike Hager of Rutherfordton and Sen. Bob Rucho of Matthews.

After the hearing, Hager said he may propose a study that would focus on how green subsidies impact energy costs, which he sees as a major impediment to economic growth and attracting business to the state.

“There’s gotta be some end to it,” Hager said of state subsidies for renewable energy. “There’s gotta be a point where we say, ‘You’re a business and you gotta operate on your own.’ ”

Last year Hager, a former Duke Energy engineer, pushed a bill to phase out the subsidies. But it got stuck in the committee he chairs, the House Committee on Public Utilities and Energy, after encountering resistance from some of the state’s top Republicans.

The subsidies date back to 2007 and require electric utilities to generate 12.5 percent of the power they sell to homes and businesses from solar, wind and other renewables by 2021. The complex law includes sweeteners for industry and power companies, and lawmakers were reluctant to dismantle the policy piecemeal.

North Carolina was the first state in the Southeast to pass such a renewable energy standard, and it has spawned a bonanza for solar farm developers.

The cost of the subsidy is typically less than 50 cents a month for a typical North Carolina household. The law requires power companies to pay for the green power even when it costs more to produce than conventional forms of electricity.

Advocates of renewables contended green energy projects create jobs and end up reducing electricity costs by delaying or offsetting the need to build costly power plants.

North Carolina’s law has propelled the state’s solar industry from insignificance to one of the largest in the nation in terms of development and construction. Meanwhile, electricity from wind and animal waste remain expensive and have yet to get underway in this state.

Critics acknowledged that the subsidy paid for solar power by utility customers in power bills is negligible. But they pointed out that solar developers also benefit from a 35 percent state tax credit and a 30 percent federal tax credit, cutting the cost of a solar project by more than half.

The owners of solar farm equipment also benefit from an 80 percent property tax break on the equipment.

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