Story by Madi Kirkman
Graphics by Bonnie Zhang
For the first time, renewable energy generation—such as wind and solar—surpassed coal last year, the U.S. Energy Information Administration announced in March.
North Carolina is a large part of this trend. The state produced 8% of utility-scale solar electricity in 2022, ranking third in the nation behind California and Texas.
For North Carolinians, this trend toward renewable energy has benefits beyond the environmental ones: the potential to stabilize and lower electricity rates, enhance power grid reliability and create more jobs.
“It’s an exciting trend that we’ve been seeing really over the past five to 10 years now as a result of a lot of really proactive policy measures taking place both at the state and federal level, while at the same time, lots of private investments being made in this industry,” said Matt Abele, director of marketing and communications at the North Carolina Sustainable Energy Association.
What contributed to reaching this milestone?
“Coal is decreasing at the same time as renewables are increasing and these are mostly wind and solar power, which has these emerging technologies that are currently increasing exponentially,” said Leda Van Doren, a teaching assistant professor in UNC-Chapel Hill’s Environment, Ecology and Energy program.
Greg Gangi is the associate director for Clean Technology and Innovation at UNC-Chapel Hill’s Institute for the Environment. He said nobody would build a new coal power plant in today’s world.
“At least in the U.S., it would economically not make sense,” Gangi said. “So I’m optimistic globally about the trends simply because at the end of the day, market forces prevail.”
Randy Wheeless, a spokesman for Duke Energy, said solar panel prices have come down over the past 10 years, making it cheaper to build renewable energy power plants in North Carolina.
“There are also some very advantageous tax breaks that you get from the government for building renewable, so it makes the economics even better,” Wheeless said.
History of renewables in NC
Gangi said North Carolina created a good foundation for clean energy in the 1990s and 2000s, which led to a lot of the major solar companies in the U.S. starting in the state.
He said things like the Renewable Energy and Energy Efficiency Portfolio Standard in 2007 and good net metering arrangements, where customers get credit for generating their own renewable energy, led to a huge explosion in solar development in North Carolina in 2011.
With the 2007 portfolio standard, North Carolina became the first state in the Southeast to adopt a renewable portfolio standard. It required investor-owned electric utilities in the state to have 12.5% of their electricity retail sales come from renewable energy sources by 2021.
“We jumped out early,” Gangi said. “Other states are catching up, and many have passed us.”
He said an advantage of the head start, however, is that national companies such as STRATA Solar and Pine Gate Renewables are based in the state.
“So North Carolina had an outsized influence on the solar and storage industry in the U.S.,” he said.
Wheeless said Duke Energy, which supplies electric service to 2.5 million customers in the Carolinas, said the company has probably retired 30 coal units in North Carolina over the past decade.
By 2024, the company said it will retire an additional 862 megawatts. In 2019, Duke Energy committed to cutting carbon dioxide emissions from electric generation in half by 2030 and striving for net-zero carbon dioxide emissions by 2050.
Wheeless said Duke Energy has a lot of solar facilities on the drawing board, and the company is still negotiating with other parties to buy solar from other projects underway.
“I’d say any solar facility you see in North Carolina, we either own it or we’re buying the power from it,” he said. “We probably buy from about 200 solar facilities in North Carolina.”
North Carolinians will also see a lot more battery storage at facilities, Wheeless said.
“We had a solar facility at Camp Lejeune in eastern North Carolina and now we’ve put the state’s largest battery next to it so that the battery and solar can work in tandem to support the grid, and I think you’re going to see more of that in the future,” he said.
Impact on residential customers
“So at the end of the day, what this means for North Carolinians is additional reliability and price stability, I think are the two biggest things that are of importance and concern for ratepayers in North Carolina,” Abele said.
He said Duke Energy had multiple proposals over the past couple of months to increase rates significantly. He said if they are approved, residential customer rates will increase close to 30% over the next three years.
“A lot of that is attributed to the volatility in natural gas prices, and solar and winds are known quantities in terms of not having to pay for the fuel after the system is built,” he said. “So you have that price stability and predictability to help keep rates low.”
He said the significant blackouts last December that Duke Energy customers experienced were attributed to fossil fuel generation resources like natural gas and coal.
“We would not have experienced those same reliability issues if we had more diversification in our fuel sources, more solar, more storage, more wind on the grid,” he said.
Wheeless said Duke Energy is doing everything it can to keep the impact on rates as low as possible as the transition to renewables continues.
“We will adopt the most cost-effective methods of new generation that will continue to speed our journey to a cleaner energy mix,” he said.
Benefits of renewable energy
Abele said an advantage to renewable energy sources such as solar and wind power is that there are no fuel costs after they’re built.
“Your only costs are interconnection equipment and construction, and then after that facility is built, it’s producing power and you’re not having to pay for any additional sort of fuel costs associated with it,” he said.
This makes renewable energy a long-term, stable investment that will prevent the price swings fossil fuel generation resources cause, he said.
Additionally, solar and wind energy keep investment dollars in the local economy.
“With coal and natural gas, you’re paying for fuels that are being imported from other states and countries,” he said. “So those dollars are leaving the state, versus solar and wind, which are being reinvested right back here into our communities in the form or jobs and taxes.”
Renewable energy also has outsized benefits for rural communities. Abele said large-scale utility solar projects are being deployed in the most economically distressed counties in North Carolina, which has brought hundreds of thousands of dollars in additional tax revenue and thousands of jobs to those counties.
Challenges of renewable energy
Van Doren said wind and solar energy are intermediate renewables, meaning they’re not always available when consumers want them to be. Often, peak power for wind can be in the middle of the night, while peak power for solar is in the middle of the day.
She said electricity storage allows excess electricity from renewables to be stored and released into the grid later when it’s needed.
Abele said studies from independent groups show that the combination of solar, wind and storage is enough to maintain the high degree of reliability North Carolinians expect from the power grid.
Over the past year, the North Carolina Utilities Commission developed a new carbon plan that requires the electricity sector in the state to reduce carbon emissions by 70% by 2030 and reach carbon neutrality by 2050.
Abele said his company contracted out some modeling to show that the state can reach those numbers with renewable sources, no new natural gas and retiring coal earlier.
Although North Carolina doesn’t have a lot of storage currently utilized on the grid, part of the North Carolina Utilities Commission carbon plan does include a storage component.
On the federal level, the Inflation Reduction Act will help support renewable energy initiatives.
Gregory Wetstone, the president and CEO of the American Council on Renewable Energy, said that while a lot still must be done to achieve the nation’s climate targets, the Inflation Reduction Act allows for a clear pathway toward a clean energy future.
“The legislation’s landmark clean energy tax platform is expected to further accelerate U.S. renewable energy development, create hundreds of thousands of good-paying American jobs, and drive a 40% reduction in greenhouse gas emissions by 2030,” Wetstone said in an email statement.
Gangi said the act will help offset the problems caused by higher inflation.
“If it wasn’t for the Inflation Reduction Act, things would really be slowing to a halt because renewable energy, it’s infrastructure, and comes down to the cost of borrowing money, and if the cost of borrowing money is high, you’re not going to have a lot of development,” Gangi said.
Gangi said the IRA doesn’t overcome the problems of siting transmission.
“So we could have enormous amounts of wind development in the Great Plains, but they don’t have the transmission lines to bring that energy to the east,” he said.
He said several projects attempting to do this were blocked.
“If we can’t get our act together on transmission, it’s really going to slow things down,” he said.
Moving forward
Van Doren said offshore wind has great potential for growth along the East and West Coasts.
“There is much more potential left that is remaining, so I think that we should see definitely this trend about their exponential expansion to continue over the next couple of years,” she said.
Abele said the transition to renewables has already spurred a large and robust industry that employs a lot of North Carolinians.
“I think the train has already left the station in terms of renewable investment and deployment there,” Abele said. “Everybody sees the benefits that these technologies can bring to the grid and to ratepayers at the same time.”
