Policy & Regulations
North Carolina wants a clean energy economy. As such it has the most supportive clean energy incentive and regulatory environment in the Southeast, and one of the most progressive in the nation.
For a full listing of all available federal, state, and local incentives related to renewable energy and energy efficiency, visit the DSIRE database, maintained by our own NC Solar Center.
A summary of major state and local incentives and regulations available to clean energy businesses in Western North Carolina (or interested in located her) follows. If you have any questions, feel free to contact us.
Renewable Energy | Energy Efficiency | Alternative Fuels & Vehicles | Industrial / Manufacturing Incentives
Renewable Energy
Renewable Energy & Portfolio Standard
On August 20, 2007, with the signing of Session Law 2007-397 (Senate Bill 3), North Carolina became the first state in the Southeast to adopt a Renewable Energy and Energy Efficiency Portfolio Standard (REPS). Under this new law, investor-owned utilities in North Carolina will be required to meet up to 12.5% of their energy needs through renewable energy resources or energy efficiency measures. Rural electric cooperatives and municipal electric suppliers are subject to a 10% REPS requirement.
Renewable Energy Tax Credit
North Carolina offers a tax credit equal to 35% of the cost of eligible renewable energy property constructed, purchased or leased by a taxpayer and placed into service in North Carolina during the taxable year. The credit has been amended several times since its original inception. House Bill 512 of 2009 extended the eligibility to geothermal equipment, extended the expiration date to December 31, 2015, and allowed the credit to be taken against the Gross Premiums Tax.
NC Green Power
NC GreenPower is an independent, nonprofit organization established to improve North Carolina’s environment through voluntary contributions toward renewable energy and the mitigation of greenhouse gases. A landmark initiative approved by the N.C. Utilities Commission, NC GreenPower is the first statewide green energy program in the nation supported by all the state’s utilities. The goal of NC GreenPower is to supplement the state’s existing power supply with more green energy – electricity generated from renewable energy sources like the sun, wind and organic matter.
Renewable Rights
No city ordinances, county ordinances or deed restrictions, covenants and other similar agreements can prohibit nor have the effect of prohibiting the installation of energy devices that are based on the use of renewable resources.
Net Metering
The North Carolina Utilities Commission requires the state’s three investor-owned utilities — Duke Energy, Progress Energy and Dominion North Carolina Power — to make net metering available to customers that own and operate systems that generate electricity using solar energy, wind energy, hydropower, ocean or wave energy, biomass resources, combined heat and power (CHP) which uses waste heat derived from eligible renewable resources, or hydrogen derived from eligible renewable resources.
Energy Efficiency
Energy Efficiency in Public Buildings
In August 2007, the North Carolina General Assembly passed an act (SB 668) to promote the conservation of energy and water use in state, university and community college systems, establishing energy efficiency requirements of 20% by 2010 and 30% by 2015. This presents an unprecedented green job training opportunity for all of North Carolina, as the bill also calls for use of local labor and businesses.
Energy Improvement Loan Program
North Carolina’s Energy Improvement Loan Program (EILP) is available to businesses, local governments, public schools, community colleges, and nonprofit organizations for projects that include energy efficiency improvements and renewable energy systems. Loans with an interest rate of 1% are available for certain renewable-energy and energy-recycling projects. Eligible renewable-energy projects generally include solar, wind, small hydropower (less than 20 megawatts) and biomass. Loans with a rate of 3% are available for projects that demonstrate energy efficiency, energy cost savings or reduced energy demand.
Energy Efficiency Rebates
Many of the electric utilities in North Carolina offer a commercial and residential energy-efficiency rebate program. For example, click here for info on Progress Energy’s corporate program, or here for Duke Energy’s corporate program. All programs can be reviewed from the DSIRE database.
Alternative Fuels & Vehicles
Alternative Fuel Refueling Infrastructure Tax Credit
A tax credit is available for facilities that dispense biodiesel and ethanol/gasoline mixtures consisting of at least 70% ethanol. The credit is equal to 15% the taxpayer’s cost to construct and install the dispensing facility, including pumps, storage tanks, and related equipment, that is directly and exclusively used for dispensing or storing the fuel. Equipment for storing and dispensing must clearly be identified as being associated with renewable fuel.
Alternative Fuel Production Tax Credit
A taxpayer that constructs and places in service a commercial facility for processing renewable fuel is allowed a credit equal to twenty-five percent (25%) of the cost to the taxpayer of constructing and equipping the facility. The entire credit may not be taken for the taxable year in which the facility is placed in service but must be taken in seven equal annual installments beginning with the taxable year in which the facility is placed in service.
Alternative Fuel Tax Exception
The retail sale, use, storage or consumption of alternative fuels is exempt from the state’s sales and use tax. Sales and use tax is applied to conventional off road fuel sales and is 7% of the sales price. For example, if the price of B100 is $3.00 per gallon, the sales tax exemption would be a savings of 4.2 cents per gallon on a B20 blend. This incentive may be especially attractive for biodiesel blended with fuel oil for heating applications and biodiesel sold to landscaping and construction companies.
Industrial / Manufacturing Incentives
Renewable Manufacturing Tax Credit
In July 2010, the NC General Assembly reinstated a tax credit for the manufacture of renewable energy property or a major component subassembly of solar arrays or wind turbines. The credit is for 25% of the cost to construct/convert and equip the production facility, to be taken in equal annual installments over 5 years.
Article 3J Tax Credits
Article 3J offers credits for: 1) Creating jobs – Companies who meet a minimum threshold of new fulltime jobs created during the taxable year may claim a credit. 2) Investing in business property – Companies can claim a credit based on a percentage of the cost of capitalized tangible personal property that is placed in service during the taxable year. 3) Investment in real property – Companies located in a Tier One County that invest at least $10 million in real property within a three-year period and create at least 200 new jobs within two years are allowed a credit equal to 30% of the eligible investment.
One NC Fund
The One North Carolina Fund helps recruit and expand quality jobs in high value-added, knowledge-driven industries. It also provides financial assistance to those businesses or industries deemed vital to a healthy economy that are making significant efforts to expand in North Carolina.
Job Development Investment Grants
The Job Development Investment Grant (JDIG) is a discretionary incentive that provides sustained annual grants to new and expanding businesses measured against a percentage of withholding taxes paid by new employees. A proposed project must meet a rigorous set of criteria for award.
