North Carolina's solar industry has seen significant growth in the last few years, earning it the number 3 ranking for installed solar capacity in the United States. In 2013, the state installed 335 megawatts (MW) of renewable power, more than doubling what it had previously. Now the industry can power about 52,000 homes.
The increased investment in the state's solar industry has helped spur the growth. Last year, $787 million was invested in solar by homes, businesses and utilities, a 156 percent increase over the previous year. But why has solar suddenly become so attractive in North Carolina?
Actually, the growth in the solar industry has been a long time coming. In 2007, North Carolina signed into law Senate Bill 3, establishing the Renewable Energy and Energy Efficiency Portfolio Standard (REPS), which requires utilities to include renewable energy and efficiency initiatives in their portfolios. In doing so, North Carolina became the 25th state in the nation and first in the Southeast to adopt such a policy.
North Carolinas' REPS mandates the state's three investor-owned utilities — Duke Energy Carolinas, Dominion North Carolina Power and Progress Energy Carolinas (now Duke Energy Progress) — to generate 12.5 percent or more of their electricity supply from green energy resources by 2021. The legislature outlines a gradual ramp up to the goal, requiring that utilities use 3 percent renewable power from 2012-14, 6 percent from 2015-17 and 10 percent in 2018 before finally hitting the 12.5 percent mark in 2021.
Municipal utilities and cooperatives were also included in the state's REPS, but their end goal varies slightly. North Carolina expects these utilities to generate 10 percent of their power from renewable resources by 2018.
Although the bill has faced opposition because of the higher cost of green energy, there are a number of benefits in the shift toward renewable energy. First of all, the cleaner resources reduce the amount of pollution in the atmosphere, which has been attributed to climate change. For the first time in more than a decade Charlotte dropped off of the American Lung Association's list of smoggiest cities in April 2014.
The standards will also help diversify the state's energy portfolio, so consumers aren't completely dependent on fossil fuel supplies that will eventually deplete. It also provides a significant investment in North Carolina, providing a boost to the economy and jobs for consumers.
According to the North Carolina Sustainable Energy Association, REPS could bring nearly 4,000 jobs to the state, garner $2.5 billion in investments by 2018 and reduce greenhouse gas emissions by 125 million metric tons by 2020.
To help meet its renewable energy requirement, Duke Energy launched a $42 million, 10 MW solar energy program in North Carolina in 2009. Through the program, the company added solar panels to 25 sites — including schools, homes and businesses — creating a distributed network of energy generation. Duke Energy owns and operates these systems and even pays a renter's fee for the use of these roofs.
Duke Energy also owns a couple of small solar farms in Taylorsville and Shelby, generating an additional 1 MW of clean energy. Furthermore, the company buys 4 MW of solar power from an independently owned solar farm in Davidson County.
Despite these efforts, Duke Energy's energy mix consists of only 1.1 percent renewable power so far. It may seem like the utility is far from compliance, but adding green energy isn't Duke Energy's only option. Under North Carolina's REPS, utilities can also implement energy-efficiency initiatives to reach the state's goals.
In Duke Energy's most recent REPS compliance plan filing with the North Carolina Utilities Commission, the company states that it plans to reach compliance from a number of avenues. In addition to generating green energy, the utility will purchase renewable energy credits and implement energy-efficient initiatives.
These efforts may keep Duke Energy compliant through 2014, but the company will have to double the required amount in the next year. It's going to take some serious investment and the utility is already working on it.
Duke Energy is currently constructing a new solar facility, the Dogwood Solar Power Project. When the project comes online in 2014, it will generate about 20 MW of renewable power — enough to power about 1,900 homes.
The utility is also looking to acquire about 300 MW of solar power and renewable energy credits through power purchase agreements with facilities that generate at least 5 MW each. As utilities such as Duke Energy continue to develop solar energy to meet REPS requirements, solar energy is expected to continue on its high growth trajectory in North Carolina.