OFM, a Holly Springs company that imports furniture, has installed a 250-kilowatt solar farm on its roof. According to the N&O “…the family-owned company uses the solar panels as a profit center and sells electricity to Progress Energy.”

The word “profit” in that sentence takes on an interesting meaning when you read the details below.  My economics textbook defines profit as “total revenue minus total cost.”  I guess if you consider the $700,000 in taxpayer subsidy and the 18 cents per kilowatt hour premium rate that Progress Energy rate payers pay as revenue, it meets the definition. (Does SB 3 ring a bell?)

OFM’s
solar farm cost $1.4million to build, but more than half that cost is
covered by state and federal incentives. Right off the bat OFM received
an incentive check of about $400,000 from the federal government, 30
percent of the cost of the project. North Carolina will reimburse OFM
for about 35 percent of the cost of the solar farm in the form of state
tax credits over seven years.

Additionally,
renewable energy qualifies for accelerated depreciation, which has the
effect of reducing OFM’s taxable income and will lower the company’s
tax obligation by about $170 million over two years, Zalcberg said.

Then
there’s the business of selling power to the power company. OFM is
selling electricity from its solar farm to Progress for 18 cents a
kilowatt hour, a premium price approved by state regulators to promote
solar energy. At the same time, OFM is paying only one-third of that
price for the power it buys from Progress.

The effect is that
instead of paying a utility bill, OFM will receive $60,000 yearly from
Progress over its 20-year contract with the utility.