Environment North Carolina Research and Policy Center
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The Daily Tar Heel
By
Michael Meeks

Solar energy production growth in North Carolina is among the fastest in the country, according to an Environment North Carolina report, and it shows no signs of slowing down. 

The report ranked North Carolina as third in the nation for solar electricity production growth between 2008 and 2017, behind Arizona and California. In 2008, North Carolina's solar electricity production was 7 GWh. By 2017, it increased to 5,783 GWh. Although once a small market in the state, countless solar energy companies have moved in and made North Carolina one of the biggest solar energy leaders in the nation. 

This growth arose from a combination of the expansion of companies like the Triangle-based Strata Solar, a variety of government factors and market forces that led to a state-wide explosion of solar energy production. 

Daniel Parker, market research analyst at the North Carolina Sustainable Energy Association, said the source of solar energy’s rise can be traced back to the 1970s oil crisis and the passage of new legislation in response to it. 

“In 1978, Congress passed the Public Utility Regulatory Policies Act,” he said. “PURPA did many things, but for our purposes, it defined ‘small power production facilities.’ These are under 80 megawatts in size, and they are fueled primarily by a renewable energy source.”

PURPA left the details of its implementation up to each state, according to Parker. 

“North Carolina was unique in that the utilities commission decided that the small power producers, if they had a generating capacity under 5 megawatts, would receive a standard contract from the utility for 15 years at an avoided cost,” he said. “That was unique, too, because it allowed people to develop a renewable energy system and have a guaranteed source of income for 15 years at a set price.”

Brian O’Hara, senior vice president of strategy and government affairs at Strata Solar, said it was Strata that first used PURPA to put North Carolina on the map for solar in the United States back in 2010.

“At the time, there were a number of policies and incentives in place that helped kickstart that industry, but it was really Strata that cracked the code to figure out how to make the economics work for utility-scale solar,” he said.

O’Hara said the strategy implemented by Strata involved using North Carolina’s state-specific implementation of PURPA to make solar economically feasible in the state.

“Once they figured it out, it was off to the races in North Carolina,” O’Hara said. “Other companies came in, replicated that model, and that’s really what drove the growth of the industry for a number of years.” 

In addition to PURPA, Parker said the state’s Renewable Energy and Energy Efficiency Portfolio Standard helped spur solar energy growth in North Carolina. 

“What this means is, North Carolina set a goal for 2020 that 12 and a half percent of the retail electricity sales by investor owned utilities, like Duke Energy, have to come from renewable sources,” he said. 

Mitch Kokai, senior political analyst at the right-wing John Locke Foundation, said almost all of North Carolina’s growth in solar energy production results from the government rigging the system in favor of solar energy producers through policies like the Renewable Energy and Energy Efficiency Portfolio Standard. 

“The bottom line is, much of what we’re seeing in terms of solar energy growth is at the expense of consumers across the state who are having to pay higher bills,” Kokai said. “Getting rid of the subsidies, getting rid of the mandates, letting all these sources of energy compete on a level playing field – that’s going to ultimately help consumers.”

The next step for North Carolina’s solar industry is tackling energy storage, according to O’Hara, and Strata Solar is already well-engaged in the energy storage business. 

“I’d say battery storage is today where solar was 10 years ago,” he said. “I think we could end up seeing the same level of success and the same leadership in this state around energy storage that we’ve seen around solar. Quite frankly, I think energy storage is going to be so incredibly important to the grid of the future that, if North Carolina can establish itself as a leader in that space as it has in solar, then we’ll be in an incredibly strong position.”

Although past solar energy growth in North Carolina was strengthened by government policy, O’Hara said today it’s largely market forces driving the industry.

“It’s a combination of the cost-competitiveness of solar and the fact that North Carolina has established itself and has the infrastructure in the solar energy,” O'Hara said. “Between those two things, I think that bodes well for continued growth in North Carolina.”