2013 NCDOR Advanced Personal & Real Property

SeminarBringing government, industry, and the public together to make North Carolina a leader in solar energy development

Miriam MakhyounManager of Market

IntelligenceNC Sustainable Energy

AssociationMiriam@EnergyNC.org

Office: (919)-832-7601 x114

Lance WilliamsManager of Site Development

Strata Solarlwilliams@stratasolar.com

Office: (919)-960-6015

Jobs in NC Clean Energy Industries

Source: North Carolina Sustainable Energy Association 2012 Clean Energy Industries Census

In 2012, the clean energy sector conservatively generated over $3.7 billion in North Carolina annual gross revenue from clean energy activities.

North Carolina’s clean energy sector accounts for over 15,200 full-time equivalent (FTE) employees as of September, 2012.

Over 200 companies indicate that they provide products and services to the national and international marketplace.

~2,000 employees in the NC Solar Industry

Business Type

Number of companies reporting activity in:

Proportion of industry active in:

Average FTE

Total FTE Employee

s

Share of State Clean Energy

FTE Employees

Research and development: 298 27% 2.67 3,587 23%

Manufacturing: 138 12% 14.11 3,282 21%

Energy efficient design, building, or construction of new buildings:

591 53% 1.89 2,151 14%

Energy efficiency retrofitting of existing buildings: 429 38% 1.79 1,790 12%Clean energy systems installer, designer, or developer:

352 32% 2.11 1,269 8%

Clean energy systems retailer or distributor: 105 9% 3.08 679 4%

Clean energy system owner or operator (including cogeneration systems):

112 10% 5.83 1,276 8%

Education, services and consulting (e.g. law, engineering, finance):

328 29% 2.10 1,239 8%

Business Focus 2353        

Solar: 501 45% 1.87 1,985 13%

Wind: 121 11% 4.80 805 5%

Biomass: 151 14% 6.04 1,142 7%

Hydroelectric: 63 6% 3.91 236 2%

Geothermal / ground source heat pumps: 232 21% 1.44 598 4%

Smart Grid or AMI/AMR infrastructure: 100 9% 10.01 1,915 13%

Energy efficiency / building sciences: 775 69% 3.06 7,218 47%

Energy storage (including fuel cells): 53 5% 6.57 872 6%

Alternative fuel vehicles (including infrastructure and components):

57 5% 3.75 502 3%

Note: percentages and numbers may contain rounding artifacts

North Carolina Leads in Solar• 501 solar companies,

employing about 2,000 people

• North Carolina Ranked 6th in nation for solar with 229 MW installed capacity and 5th for annual capacity in 2012 with 132 MW• Mostly from utility-

scale projects

Source: SEIA/GTM Research “U.S. Solar Market Insight 2012 Year-In-Review”

NC Registered Solar PV by Year

21

Megawatts (MW) of Registered Solar PV Capacity in North Carolina Expected Online from 2006-2012

Expected CapacityNumber

ofSolar PV System Capacity

Year Online

MW DC (a)

Systems 10 kW or Less

Greater than 10 kW

through 500 kW

Greater than 500 and under

1 MW

1 MW and Greater

     2006 0.26 24 22 2 0 0

2007 0.32 54 50 4 0 0

2008 5.49 116 105 7 1 3

2009 25.88 197 167 24 1 5

2010 28.43 351 283 57 2 9

2011 91.59 505 379 107 6 13

2012 407.45 638 483 64 13 78

TOTAL 559.42 1,885 1,489 265 23 108

Notes: (a) Solar PV systems produce electricity in direct current (DC), which is converted by inverters to alternating current (AC), the typical current used throughout the U.S. electric grid. As a result, it is normal industry practice to report solar PV capacity in DC units. For the purpose of this report, for systems registered with AC capacity and an unknown DC capacity an 84% derate factor was assumed.

500 MW produces 717,300 MWh a year—enough to power over 59,775 homes! This equates to the displacement of 44,829 tons of CO2 equivalent a year or the planting of 224,145 trees per year!

Sources: North Carolina Utilities Commission, Carbonify, National Renewable Energy Laboratory System Advisor Model

Types of Solar: Solar Thermal vs. PV

Thermal

• Heats water instead of creating electricity

• Slightly thicker panels than PV

Photovoltaic (PV)

• Converts sunlight into electricity

Different Project Types

6.4 MW Project on Fuquay Farms, NC- Strata Solar

4 kW rooftop solar array- Morganton, NC

1 MW commercial rooftop project on an IKEA in Charlotte, NC- Strata Solar

Examples1. Residential Rooftop• 2 kW• 8-10 panels

2. Commercial Rooftop• 974 kW• ~4,000 panels• ~5.8 acres

3. Utility Ground-mount• 1-20 MW (1,000-• >20,000 kW)• 3,000->80,000 panels• ~6->100 acres of land

Source: Canadian Solar

Source: Inhabitat.com

Solar Photovoltaic Installed Cost per Watt

*Sources: North Carolina Utilities Commission, North Carolina Sustainable Energy Associationa) Barbose et. al, Tracking the Sun, Lawrence Berkeley National Laboratory, 2012

Year

≤5 kW

(Median)

5-10 kW

(Median)

10-150 kW

(Median)

150-1000 kW (Median)

>1000 kW

(Median)

Comparison with

selected data

2006 10.00 * * * * $8.70(a)

2007 10.03 * * * * $8.80(a)

2008 8.93 8.76 * * * $8.40(a)

2009 8.48 7.66 7.50 * * $8.10(a)

2010 7.00 6.28 6.02 * * $6.90(a)

2011 6.76 6.03 5.02 4.49 4.35 $6.10(a)

2012 6.27 5.13 4.95 3.75 3.54 　

Equipment:Income Capitalization Approach

Equipment:Income Capitalization Approach, 2

Social and Environmental Impacts:Partnering with the Community

• Counties (building and electrical permits)

• NC Department of Environment and Natural Resources (land and water)

• NC Department of Transportation (driveways)

• Economic and Work Force Development and others

• Community colleges• Local contractors• Farmers and businesses

Source: Strata Solar, Kings Mountain, NC, 5 MW

Property ValuesHow do ground-mounted solar PV arrays adjacent to residential neighborhoods influence the property values in those neighborhoods?

Bottom Line: No research was found specific to ground-mounted solar PV and property values.

Municipalities that adopt zoning for solar facilities may want to consider encouraging project developers to include screening vegetation along site borders to minimize visual impacts on surrounding neighborhoods.

U.S. Department of Energy Lawrence Berkeley National Laboratory concluded that household solar installation actually increases home property values.

December 2012, Massachusetts Department of Energy Resources , Massachusetts Department of Environmental Protection, Massachusetts Clean Energy Center

Conduct geo studies on the soil to determine if it can support pile-driving; using concrete as little as possible (e.g. inverter pads)Disturb as little land as possibleLeave as much existing ground cover as possibleAgriculture is known to be more damaging to the soil than solar farms

Protecting the Land:Measures Ensuring the Natural

Environment

Source: REP Energy

Working with the Department of Transportation when a temporary road touches another major roadTemporary roads can be plastic laydowns instead of gravelLeave as much existing ground cover as possible

Protecting the Land:Measures Ensuring the Natural

Environment

Source: 123rf

Double Cropping: Piedmont Biofuels & Southern Energy Management

From protecting tomatoes from rain (tomatoes do better if only their roots are fed), through shading cooler weather crops like salad and arugula, to providing support for trellises and other crop infrastructure—Sami Grover

Pittsboro, NC

*Ownership, Size, Income, and Sound Management TestAgricultural land requires at least one 10-acre tract in actual production. The gross income required from agriculture is $1,000.

Example:If a solar facility is in the same 15-acre parcel and 10 is covered by a solar facility, $1,000 gross income would allow it to pass the income test but since it does not pass the size test, it does not get PUV. If reversed—5 acres for solar and 10 for farming—it would pass both tests.

Present-Use Value for Agriculture

Present Use Value Program Guide: http://www.dor.state.nc.us/publications/puv_guide.pdf

If owner is non-qualifying a rollback of three years plus current tax year’s taxes are due.

Four categories of qualifying owners:A. IndividualsB. Certain Business EntitiesC. Certain Trusts and Testamentary TrustsD. Certain Tenants in Common

If owned by a business, “it seems reasonable that at least 50% of the business must be farming related, but the statutes do not explicitly make that statement.”

Qualifying Owners for PUV

Present Use Value Program Guide: http://www.dor.state.nc.us/publications/puv_guide.pdf

Livestock: A Symbiotic Relationship at SAS

A use for underused or no longer arable landA net tax benefit through taxable infrastructure that does not burden existing infrastructureJob-creation and training/certification in often rural areasIt helps farmers: Out of over 7,000 U.S. farms who responded to the 2009 USDA On-Farm Census stating they utilize solar energy, North Carolina had 104 farms with solar, 67 with PV panels; 55 with solar thermal panelsIt saves businesses and residents money: Over the last decade, utility electricity prices have risen by 3% per year, while the cost of solar PV continues to decrease (30% in North Carolina from 2007—2011, according to the North Carolina Utilities Commission Docket Filings)

Social Benefits of Solar PV

NC Department of Revenue Contacts

Michael Brownmichael.brown@dornc.com919.733.7711

David Dutydavid.duty@dornc.com

For More Information

I.Solar farm leases 35 acres of a 42-acre parcel. 30 acres of the property was farmed, all of which is now part of the 35-acre solar farm. Any change to real property value?

I.Solar farm leases 35 acres of a 42-acre parcel. Seven acres is still being farmed with a crop value of $500/acre/year. Any change to real property value?

Scenarios of Present Use Values

III. Lease 35-acres, have 28-acres within the security fence, and plant soy beans on the remaining 7 acres. The solar farm operator leases the 7 acres outside of the fence to a farmer for rental income of $100 per acre. The farmer has gross revenue per acre on the farm of $500 per acre. Any change to real property value? Does it differ if the landowner is the “farmer” or just leases it to the “farmer”?

IV. Present property is 53 acres not in present use but out in the country with Ag/Light Residential zoning. Solar Farm buys 35 acres of land and builds a solar farm. Any change to the real property tax value on either remaining parcel (35-acre parcel, and 18-acre parcel)?

Scenarios of Present Use Values, 2

V. Present property owns 53 acres not in present use but out in the country Ag/Light Residential zoning. Solar Farm buys 35 acres of land, zones that 35 acres only as light Industrial, and builds a solar farm. Any change to the real property tax value on either remaining parcel (35-acre parcel, and 18-acre parcel)?

VI. Solar farm leases 35-acres of a 1000-acre parcel, which is mostly farmed. Any change in the real property value of the 1000-acre parcel?

Scenarios of Present Use Values, 3

VII. Solar farm subdivides and leases 35-acres of a 1000-acre parcel, which is mostly farmed. Any change in the real property value to either the 35-acre solar farm new parcel or the 965-acre parcel still being farmed?

Scenarios of Present Use Values, 4

Thank you for your Participation!