NC House Agriculture Committee approves bill ending property tax abatement, effectively raising taxes on solar projects
Move may lead to project cancellations
Last Wednesday, the North Carolina House Agriculture Committee approved HB 729, Farmland Protection Act. This legislation effectively ends the property tax abatement for solar projects.
Back in the 2000s, the General Assembly provided a property tax exception for solar projects, effectively allowing these projects to be exempt from 80% of the property tax increase. Since that legislation passed, North Carolina has become a hotbed for solar power and is now fourth in the nation in terms of cumulative solar electric capacity, behind California, Texas, and Florida. The solar industry in North Carolina supports 279,000+ jobs.
Supporters of the bill argue that property tax abatement unfairly subsidized the solar industry, making it harder for farmers to compete.
Critics of the legislation point to the bill’s fiscal note, saying this effectively is a 500% tax increase on solar projects and warn that many solar projects would close.
During the committee meeting, Alex Miller with AMGA warned that unlike other businesses, solar projects cannot raise rates and that the tax increase would force many of these projects to close.
Here is what supporters of the legislation said:
North Carolina Agriculture Commissioner Steve Troxler said this bill was an important step forward in protecting farmland from development.
A Raleigh insider pointed out that a 2022 report from the NC Sustainable Energy Association found that only 0.19% of North Carolina cropland had been repurposed for utility-scale solar development.
The North Carolina Farm Bureau spoke at the meeting and said this bill provided fairness to farmers who are trying to compete with solar projects for land.
·The County Commissioner Association spoke at the meeting in strong support of the bill.
Critics
Critics of the bill said that the tax increase would harm North Carolina’s solar industry and said this is a bad signal to send to the rest of the state.
A Raleigh political insider, who wished to remain anonymous, said that this bill was driven by the County Commissioner Association under the guise of protecting farmland protection. The result of this bill would be significant solar project cancellations, harming the current property owners with solar projects.
