North Carolina’s elected officials should stay the course and continue to foster the state’s rapidly growing clean energy economy. In 2013, several legislators led efforts to turn away from clean energy policy. Thankfully, those efforts were rejected by Republicans and Democrats, and the state has been rewarded with new jobs and investment.
Lawmakers should now evaluate new “market-based” policies to grow additional private investment in the clean energy sector and allow more market competition and choices for electricity customers. The Energy Freedom Act is an excellent opportunity. By passing this bill, North Carolina would follow the lead of at least 24 other states by allowing more energy choices for businesses and homeowners. Currently, N.C. electricity customers can buy power only from their monopoly utility, which is limiting private investment in the state.
There are a number of cutting-edge clean energy companies in North Carolina including Cree, based in Durham, a global leader in energy-efficient lighting technology. Charlotte-based Polypore is another. It has developed key components to support energy storage and high-efficiency filtration systems. These North Carolina firms are creating local jobs and investing in their home state while also building efficient, clean energy solutions for global markets.
These anecdotes of North Carolina clean energy success stories are backed up by the sector’s growth figures. A recent report found the clean energy sector supported nearly 23,000 North Carolina jobs in 2014. The state ranked second in the country for new solar installations in 2014, and roughly $2.7 billion was invested in North Carolina in clean energy development between 2007 and 2013, nearly 75 percent occurring in rural communities. North Carolina is becoming a hub for new energy investment.
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Non-energy companies around the world are taking notice, too. With recent announcements of millions of dollars of renewable energy investment from companies like Microsoft, Whirlpool, the candy-maker Mars and others, there is a new cadre of energy investors.
Recent research from Calvert Investments and Ceres shows that 60 percent of Fortune 100 companies have a clean energy target and have saved $1.1 billion annually by pursuing these goals. Given this broad-based commitment by America’s biggest companies, expect many announcements of new corporate energy projects. Hopefully, those announcements will be in this state. Indeed, North Carolina has used its good renewable energy resources to attract companies such as Apple and Facebook.
However, one critical outdated piece of law is holding back many other companies from coming to the state. Luckily, the policy fix is simple and doesn’t cost taxpayers a dime.
Some companies, including IKEA, like to buy their own solar energy systems and manage them themselves. However, other companies prefer to buy the power generated by solar panels without having to purchase, own or maintain the system. This arrangement usually takes the form of a power-purchase agreement, which is simply a contract to buy power from a power producer, such as a solar company, at a fixed price over a number of years. This arrangement empowers companies to go out to the market and find competitive options for buying the electricity rather than owning the solar panels or wind turbines in-house.
Unfortunately, North Carolina is one of six states where this kind of “third-party” sales of energy is illegal. This prohibition is a vestige of a time when competition in the electric sector would have meant multiple companies stringing up wires down the same street. It was for this same reason that AT&T was long the sole provider of phone service and the owner of people’s phones. The cell phone made AT&T a distant memory. Similarly, in the electricity sector, technology is increasing people’s energy choices.
Technology is changing, and so should the law. Lawmakers have been given a great way to continue the state’s leadership in one of the fastest-growing industries by bringing laws in line with new technology and allowing the free market to work. The Energy Freedom Act is a great way to provide all electricity consumers in North Carolina with more choice while driving new private sector investment in the state.
Ken Locklin is a director of Impax Asset Management and a founder of the American Council on Renewable Energy.