Agriculture Committee weighs N.C. bill to disincentivize solar on farmland

RALEIGH — A bill moving through the North Carolina Statehouse would greatly reduce tax incentives and make it harder to build utility-scale solar projects on farmland.

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HB 729 or the Farmland Protection Act reduces tax abatements on solar projects from 80% to 40% and requires the North Carolina Utilities Commission to not issue a certificate of public convenience and necessity for a utility-scale solar project unless it’s on land not currently being used for agricultural or horticultural production. The bill would also require all new and existing solar projects to register a decommissioning plan and put money aside to enact that plan.

The bill’s primary sponsor, Rep. Jimmy Dixon (R-Duplin), described the bill as a way to keep productive farmland in its current land use and ensure solar development pays its fair share, particularly to “tier one counties” or the 40 most economically distressed counties in the state, which host a disproportionate number of these utility-scale solar projects.

“You travel across the state of North Carolina, and it’s occupying the best farmland in the state,” he said. “I am a firm believer in property taxes, property rights … but when you do something on your property that cost every citizen in North Carolina every month a subsidy to pay for what you do on your property. Then I have an interest in what you do on your property.”

Six stakeholders spoke before the committee during public comment. Those in favor of the bill included the executive director of the North Carolina Association of County Commissioners, who spoke to the fact that this bill would bring in millions in additional property tax revenue. A representative from the Department of Agriculture and Consumer Services spoke about how quickly the state is losing farmland and how solar development is outpacing their efforts to preserve farmland.

According to a report from the North Carolina Sustainable Energy Association from 2022, solar occupies 0.28% of agricultural land in North Carolina.

Opponents of the bill included a solar industry lobbyist, the Carolinas Clean Energy Business Association and an Anson County farmer who is currently leasing his land for solar development.

The advocates for clean energy say this bill threatens to stop future development in its tracks, severely limiting North Carolina’s options for a quick and cost-effective transition to carbon-free energy. They also say that this bill would have a dramatic impact on the state business environment in general, as it would significantly increase tax and operational costs for projects that were developed in good faith under previous conditions.

The advocates also point out that the idea that solar developments don’t pay their fair share isn’t accurate as the tax abatement only applies to the solar developments themselves, not the land those developments are on. That land also pays significantly more taxes to the counties than it would have, had it remained farmland.

The Anson County farmer, George Draper, brought up the impact to his own property rights. He said he was previously leasing his farmland to family, but when the lessee opted for land closer to his property and better suited for his needs, Draper chose to lease to solar so he and his wife could retire on the land they owned while collecting a stable income.

“We make considerably more money now than we did leasing it to my brother-in-law and Anson County makes considerably more money from tax revenues,” he said. “Solar is a perfect fit for farmers who have unimproved or unused land for providing alternative sources of income.”

The bill was not up for a committee vote and the committee opted to cut discussion short. Rep. Dixon said the bill was still a work in progress and said he would change the language around the tax abatement.

“I originally had it going from 80 to 40% and now it goes to zero. There will be no exclusion going forward,” he said. “We hope that that will be last, some of the very unfair treatment related to other businesses that have come and built in North Carolina, we feel like that will be a good adjustment.”

The change in language has not yet been filed in online versions of the bill but his statements imply the abatement change would not apply to existing projects, though it removes the abatement for future projects entirely.

The bill remains in the Agriculture and Environment Committee and will be up for another discussion before a vote. If it’s reported favorable, the bill has two more committees before it makes it to the house floor.

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