by Sam Hieb
Interesting N&R op-ed by N.C. State University professor Herbert M. Eckerlin stating that the North Carolina’s solar energy tax incentive program needs to be— at the very least— seriously reconsidered.
Eckerlin offers several reasons, but here’s the most compelling:
The final step in evaluating this solar farm process is to determine the impact that the tax credits have on the state’s economy. In 2014, for example, the tax credit incentive program enabled the solar farm investors to reduce their overall tax obligation to the state by a total of $124 million. This is a significant benefit for the solar farm investors and a significant loss to state government. In practical terms, this loss in revenue reduces the services that the state can provide. It impacts a whole host of issues (e.g., salary increases for our teachers and state employees, economic development, highway construction, etc.).
North Carolina teachers rank 47th nationally in terms of pay. We can’t get much lower. We also have to recognize that the $124 million loss is for 2014 alone. That figure will increase in subsequent years because so many more solar farms are being built. And we can’t forget that each investor will claim his tax credits over a five-year period. This means that an investor who took his or her first tax break in 2014 will still be realizing tax benefits on that investment in 2018. This is a bit scary.
My sense is that my friends in the solar farm business did not anticipate the negative impact their program would have on the state’s tax structure and its economy.
Eckerlin concludes that should the solar farm tax credits continue “we will be looking at two Americas.” Who would imagine that? Apparently not President Obama, who’s more concerned with his legacy than the average American.