Solar Makes NC Cleantech Shine, But Tax Credit Expiry Clouds Future
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the Southeast’s first commercial-scale wind farm on a tract of undeveloped land on the northeast North Carolina coast through a contract with Iberdrola Renewables, a Spanish company that operates wind farms in 17 U.S. states. That project will connect to Virginia-based Dominion Resources (NYSE: D).
Urlaub took time to speak with Xconomy during the NCSEA’s annual “Making Energy Work” conference last week. He discussed the expiration of the state tax credit; the prospect for energy storage—such as mega batteries manufactured by energy startup Alevo—to become viable utility-scale technology; and the challenges of developing sustainable energy policies in a state where the law requires rate-regulated utilities to provide the “least cost” energy sources. Portions of Urlaub’s interview follow, condensed and edited for space and clarity.
Xconomy: What are you hearing from solar developers, installers? Are they giving you any indication of where they think things might be going after the tax credit expires?
Ivan Urlaub: We have so much lag on the regulatory front, because we’re so accustomed to looking at everything we do in electricity in a regulatory manner like it was 20 years ago. Amidst this fully regulated market environment, with regulatory lag and monopoly utilities that are not terribly transparent, I think companies are looking at business model innovations for themselves that go even more aggressively, now directly to the customer. Often people in industry tell me that having to go through the utilities in the Southeast market can kill your business. Solar has taken off because they can build qualifying facilities … With the tax credit going away, that raises the question longer term: What will be that impact?
I think businesses in solar are preparing for transforming their products and service offerings, maybe evolving them, for the 2017 market. Whereas all the other tech are looking to do that for the 2016 market. How do you bundle service, product? Maybe bundling solar and storage, but especially energy efficiency. Bringing more Internet of Things-enabled tech behind the meter to customers. Getting them more data in easy-to-use and easy-to-act-on ways. I think a lot of the smaller companies, smaller system installers, are looking at that. And we have this huge manufacturing ecosystem in the state. Our industry clusters are strong and growing in storage and smart grid. We have the top smart grid clusters in the country. They’re not deploying here as much as they’re deploying elsewhere.
X: Is that a regulatory issue?
IU: It’s not just a regulatory issue. There are aspects of value streams that storage should be able to realize that they’re just not going to be able to [realize] on the current regulatory approach in the Southeast, and maybe in similarly situated regulated states elsewhere in the country. What do the rules of the road need to be for storage going forward, so that people can say North Carolina allows what I need it to allow, and gives me the clarity I need to do deals to deploy storage in this market? If we can find a way to do that that’s consistent with our current regulatory principles, which is almost a singular principle of least cost, then that’s something that could be … Next Page »