The NC General Assembly has finished the budget on time and rumor has it our legislators may wrap up this very efficient legislative session as soon as Friday next week.

Legislators were largely responsive to calls for clarifying and improving our market-based incentive policies. This week, the Senate Finance Committee passed House Bill 1829, which includes nearly all of the financial and tax issues in NCSEA's 2010 legislative agenda with one exception - the committee did not approve "special allocation" for the renewable energy installation tax credit.

H1829 does three major things:

1. Improves State Renewable Energy Installation Tax Credit

• Clarifies the definitions of "cost", "installation of renewable energy property", "geothermal equipment", application of the residential tax credit;
• Applies the renewable energy installation tax credit to combined heat and power systems;
• Re-instates a 25% renewable energy manufacturing tax credit

2. Makes NC a More Attractive Place to Manufacture Renewable Energy Products - Expands the manufacturing tax credit to include major component subassembly for a solar array or wind turbine. By definition, it is understood that this manufacturing tax credit also applies to combined heat power systems.

3. Clarifies Local Government Authority to Offer Financing for Renewables and Efficiency, such as Property Assessed Clean Energy (PACE) financing

Where does H1829 go from here?

The Senate is scheduled to vote on H1829 on June 30 and July 1. If passed, the bill will be sent over to the House where they will either review it in committee or recommend the bill for "concurrence vote". If the House moves to concur, the House must also vote three times over two days on whether to concur with the Senate's changes to H1829, which would pass the bill and send it to the Governor.

Legislation in the wake of the financial storm

While legislators grappled with painful budget decisions brought on by the great recession, their expectations for how much they could do to address sustainable energy barriers were understandably lower than many businesses and advocates originally had wanted. NCSEA worked hard this session to manage expectations of all those who are frustrated with our remaining major policy and related regulatory barriers to cost-effective renewable energy development and greater use of energy saving solutions in our state.

NCSEA held off on critical, more sweeping policy reform needs, narrowing our legislative agenda to a small yet critical list of financial issues impacting the ability to finance and manufacture renewable energy systems and implement energy efficiency measures across our state. Serious issues remain to be addressed by our state leaders regarding market transparency, regulatory and utility implementation of the REPS law, and resolving utility-society conflicts inherent in our state energy policy and regulation that are stymieing job creation and sustainable economic development, preventing long-term stabilization of electricity rates, and incenting our regulated electric utilities to sell us more electricity instead of helping us to use what we have and save meaningful amounts of energy.

Looking forward to a likely historic 2011 legislative session

Renewable energy, energy efficiency and smart grid issues will need to be front and center in 2011. It is now common knowledge that the largest electric utilities are running out of options for financing expensive new nuclear power plants, and will be seeking NC legislation in 2011 to shift whatever remaining financial risk and liability there is that hasn't already been placed on the Federal taxpayers, onto the state electricity ratepayers. The state is debating how many nuclear power plants - if any - our state actually needs and can justify the cost of, and if we do need them, whether we need them now or later.

The long sought after subsidized financing of nuclear costs and risks is far more significant than the policy changes the sustainable energy community has asked for over the past five years, and will require extensive due diligence by our state decision-makers, Energy Policy Council, Governor Perdue's Office, and additional justification by our electric utilities between now and February 2011 when legislators return to Raleigh. NCSEA looks forward to working with all interest groups to inform this decision-making process with as much transparency and accuracy as possible.

NCSEA believes there is a win-win-win solution out there for our hard working electricity ratepayers, the businesses that know how to cost-effectively compete to deliver renewable energy and energy saving products and solutions, and the regulated electric utilities and all our state's electric service providers to still be able to turn a predictable profit while delivering reliable electricity at comparable costs. To find it, we must all work together.