In a state where options have been limited for businesses looking to procure or install renewable energy to power their operations, North Carolina’s lawmakers have an opportunity to drive new investment in the state.
Since September 2016, various energy stakeholders have worked together to further advance clean energy in North Carolina. The resulting energy stakeholder proposal (House Bill 589) originally put forward and passed by the House in early June represented a step forward for solar, placing North Carolina on a path to achieve at least 6,800 MW of installed solar by 2022. However, the last-minute addition of an unnecessary 18-month moratorium for new wind energy project permits by the North Carolina Senate casts a shadow over a bipartisan effort to continue North Carolina’s history of leadership in clean energy investment and innovation.
House Bill 589, “Competitive Energy Solutions for North Carolina,” is currently awaiting action by Governor Roy Cooper, who has until July 30 to sign, veto or allow the legislation to become law without his signature.
As lawmakers reflect on this year’s legislative session, there are significant opportunities to continue North Carolina’s clean energy investment momentum. Thanks in large part to forward-thinking legislation passed in 2007, North Carolina ranks second in the nation in installed utility-scale solar. However, when it comes to commercial and industrial customers’ ability to procure renewable energy, the Tar Heel State falls behind. A recent analysis from the national Retail Industry Leaders Association and the Information Technology Council ranks North Carolina 30th nationally in the overall ease for businesses to procure renewable energy, including access to programs like third-party leasing, power purchase agreements, community solar, and utility green tariffs.
Companies are increasingly seeking access to renewable energy because it makes business sense. Clean energy can help companies obtain an advantage over their competitors—allowing them to save money, lock in fixed energy costs and hedge against volatile fossil fuel prices. That’s why nine major companies—including Google, VF Corporation, Unilever and New Belgium Brewing—recently sent a letter to lawmakers supporting efforts to expand renewable energy access for North Carolina businesses and outlining opportunities for policy innovation moving forward.
Major business leaders and employers have been advocating for more renewable energy choices in North Carolina for quite some time. In March 2015, businesses including Walmart, Target, VF Corporation, Unilever, Lowe’s and Volvo wrote to lawmakers asking for more choice and competition in the energy marketplace by allowing businesses to enter into third-party Power Purchase Agreements for clean energy.
In response, Rep. John Szoka (R-Cumberland) crafted the 2015 Energy Freedom Act—legislation that would have opened the state’s electricity markets to third-party sales of electricity. While the Energy Freedom Act did not move forward, it demonstrated that lawmakers were interested in crafting solutions for the business community.
As energy stakeholder legislation began to take shape, businesses again contacted lawmakers in early 2017 to encourage the passage of meaningful clean energy policies during the 2017 legislative session.
House Bill 589’s provision to legalize third-party leasing of renewable energy systems represents a step in the right direction for energy choice and could be a viable option for retailers or corporate purchasers looking to procure renewable energy. Energy access through third-party suppliers provides an option for companies that do not own their roof or do not want to take on the financing and risks of owning and operating their own renewable energy system. The capital saved up-front can then be used to hire more employees or invest in the local economy.
“Enabling leasing and power purchase agreements for solar equipment is a common sense, market-based fix to allow companies to procure renewable energy,” nine businesses wrote in response to the House’s original version of the energy stakeholder bill.
Third-party leasing is only one mechanism among a broad spectrum of options that vary in feasibility among the diverse business community. Many companies access renewable energy through third-party sales—an option still prohibited in North Carolina and eight other states. Other companies prefer alternative options for procuring renewable energy, such as community solar or utility-offered green tariff programs.
House Bill 589 also authorizes a new Green Source Rider program for Duke Energy. A properly implemented Green Source Rider allows participating customers to work directly with their utility to purchase as much renewable energy as they want or need at a competitive rate and without shifting costs to other ratepayers. Duke Energy previously offered a three-year Green Source Rider pilot program, but the program expired in 2016 and was only utilized by three companies.
While the new GSR program in HB 589 contains some improvements over the pilot program, it imposes additional limitations that make it unlikely to be a viable option for many large customers. Businesses are eager to continue working with the North Carolina Utilities Commission and lawmakers on potential implementation and in future years to improve the program moving forward.
Unfortunately, the final bill also attacks wind energy—limiting free-market competition, suspending new investments and stalling opportunities for businesses, universities, the military and communities to reap the economic benefits of new wind projects.
Significant progress remains in order to attract and satisfy the growing number of businesses looking to procure renewable energy and drive additional clean energy investment. No matter the ultimate fate of House Bill 589, businesses will continue to work with lawmakers to build North Carolina’s burgeoning clean energy economy.
Brianna Esteves is senior associate for state policy at Ceres. Ceres is a sustainability nonprofit organization working with the most influential investors and companies to build leadership and drive solutions throughout the economy.