CHARLOTTE — A bill that would raise taxes on utility-scale solar facilities in North Carolina by 500% is moving through the Statehouse. House Bill 729, known as the Farmland Protection Act, passed the Agriculture and Environment Committee Wednesday morning.
Rep. Jimmy Dixon (R-Duplin) introduced the bill in early April as a way to address concerns about North Carolina losing productive farmland. The latest version of the bill repeals an 80% tax abatement on utility scale solar projects over four years, ultimately eliminating the abatement entirely.
Stakeholders with the sustainable energy industry and farmers who have chosen to lease to solar companies expressed their concerns that the bill would unfairly penalize a single industry for farmland loss, which occurs primarily through housing development, while interfering with agreements property owners and solar companies entered in good faith.
Before the debate and public discussion in the comittee, Agriculture Commissioner Steve Troxler voiced his support of the bill.
“We know that solar development has exceeded the amount of farmland we could protect with the Farmland Preservation Trust fund that we have,” he said. “So, it is time to take a look at this.”
A 2020 report from the American Farmland Trust ranks North Carolina second in states with the most-threatened agricultural land, but the report claims the biggest threats are from urbanization and sprawl from low-density residential land use. It does not mention solar development.
The North Carolina Sustainable Energy Association released a report in 2022, claiming solar occupies 0.28% of agricultural land in North Carolina.
Dixon also emphasized the potential financial boon this bill could provide local governments as they start to collect additional tax revenue, particularly in Tier 1, or the most economically distressed counties in the state, which host a disproportionate number of large-scale solar facilities.
According to a note from the Fiscal Research Division, this could add an additional $60.4 million in local revenue annually by 2030, one of the primary reasons the County Commissioners Association expressed their support for the bill.
Rep. Keith Kidwell (R-Beaufort), who voted to move the bill through the committee called the tax abatements on these projects “corporate welfare,” arguing solar developers need to pay their fair share if they want to continue doing business in the state.
“We are subsidizing the solar and wind industry through these tax cuts,” he said. “Now I’ll hear the argument that we subsidize other businesses. Okay, let’s stop that, too. Let’s make everybody pay an equal amount of taxes, because that’s what we’re supposed to do under the Constitution.”
Joel Olsen, who runs an agrivoltaics facility in Montgomery County that Channel 9 visited earlier this month, spoke at the committee hearing, taking issue with the idea that he is not paying his fair share in taxes.
“When I bought the land, we paid $972 a year in property taxes,” he said. “Once we completed the solar farm, we paid three years of back taxes. We paid 100% of the real property taxes, and we paid over $100,000 in personal property taxes.”
He said he built his solar project with agriculture in mind, with sheep grazing alongside the panels. Olsen said this bill and rhetoric pitting solar against farming doesn’t take farms like his into account.
The bill was reported favorably with a clear voice vote majority and will move to the Energy Committee for further consideration.
This is a revised version of HB 729, original language in the bill would have also increased regulatory constraints by requiring the North Carolina Utilities Commission to refuse to issue a certificate of public convenience and necessity for a utility-scale solar project if the project is to be sited on land currently being used for agricultural production and also required all solar facilities to submit a decommissioning plan to the state.
VIDEO: Agriculture Committee weighs N.C. bill to disincentivize solar on farmland
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