About North Carolina
Given its skilled labor force, world-class universities and research facilities, and strong manufacturing and engineering sectors, North Carolina is in a prime position to benefit from the growing demand for advanced energy. From 2012 to 2015, employment in the state’s clean energy industry increased from 15,200 to 26,000 full-time equivalent positions, representing an annual increase of 24 percent. Leveraging this momentum to serve growing regional, national, and global markets would offer significant benefits for the economy and provide good-paying jobs for the state’s residents.
After extensive research and more than 90 interviews with local stakeholders and experts, the American Jobs Project identified two sectors as showing particular promise for economic development: utility-scale batteries and biogas.
However, several barriers hinder North Carolina’s advanced energy industries and prevent supply chains from reaching full potential. Policymakers must address these roadblocks if they want to grow the state’s advanced energy sectors and realize maximum economic gains. North Carolina’s leaders can enact policies to increase demand for utility-scale batteries and biogas technology, and help the state’s businesses grow, innovate, and outcompete regional, national, and global competitors. With the right policies, utility-scale batteries and biogas can support 19,000 jobs per year through 2030.
This project serves as a research-based roadmap for leaders who seek to develop smart policies that leverage North Carolina’s resources to create skilled, good-paying jobs. The number of jobs created depends on action taken by state and local policymakers.
Concerted effort can create an environment that attracts advanced energy businesses to North Carolina. Further, employees in the growing advanced energy sector will spend their earnings in grocery stores, restaurants, and other local establishments, creating a multiplier effect that echoes throughout the state’s economy.
Summary of Policy Recommendations
The analysis presented in this report culminates in recommendations for North Carolina’s leaders based on best practices in the United States and abroad. Each set identifies opportunities for removing barriers and growing the utility-scale battery and biogas sectors. While the recommendations are complementary and would be especially powerful if adopted as a package, each can also be viewed as a stand-alone option.
Utility-Scale Battery Technology
Properly Define the Value Utility-Scale Batteries Add to the Grid: Establish a proper valuation method in order to demonstrate that energy storage is economically and technically feasible, and require utilities to include energy storage in their integrated resource plans, signaling to manufacturers that North Carolina is ripe for investment.
Require Cost of Service Transparency: Require all utilities to disclose sub-hourly pricing information, which is actively collected but inaccessible to industry. Transparent costs could allow the utility-scale battery industry to better demonstrate the feasibility and potential cost savings of deployment, enabling the proper valuation of energy storage.
Enhance Cost Recovery by Utilities: Enable more utility-scale battery pilot projects by authorizing utilities to lease equipment from battery companies and recover costs of these leases from ratepayers, ultimately saving on large capital expenses.
Provide Refundable and Transferrable Tax Credits for Battery Manufacturers and Installers: Allow a franchise tax exemption or an income tax credit for in-state businesses engaged in the manufacturing or installation of utility-scale batteries and related equipment. The income tax credits could be refundable and transferrable to allow companies to benefit from the incentive immediately.
Create a North Carolina Biogas Public-Private Partnership: Create a targeted biogas public-private partnership with the NC Bioenergy Council and the Economic Development Partnership of North Carolina to cultivate strong leadership, educate policymakers, foster strategic public-private relationships, and identify opportunities for expansion. This partnership could recruit foreign direct investment, streamline project development, educate farmers, and create an aggregate purchasing agreement with equipment manufacturers to foster industry growth.
Exempt Biogas Projects from Property Tax: Provide property tax exemptions for property owners installing new biogas or waste-to-energy equipment, which could provide 15 to 20 years of abatements, giving farmers and developers the certainty they need to invest.
Establish a Loan Program for Biogas Projects: Create a streamlined loan program for biogas projects by issuing low-rate bonds using a guarantee under the Clean Water State Revolving Fund. The North Carolina Department of Environmental Quality could use the revenue from the bonds to establish a loan program for the biogas industry.
Enable the Use of Performance Contracts for Biogas Fleet Vehicles: Enable municipal governments to improve energy security, decrease fuel costs, and stimulate demand for locally sourced fuels by using biogas fleet vehicles. To streamline the retooling process, the legislature could expand energy service contracts to include public fleets.
Create a Carbon Offset Market Aggregator: Create carbon offset aggregators to reduce single payer cost burdens by pooling offsets from multiple projects. A private company could establish a public-private partnership with the North Carolina Cooperative Extension or the Natural Resources Conservation Services.
Allow Third-Party Sales of Biogas-Generated Electricity: Authorize third-party electricity sales for biogas projects to enable third parties to develop, own, and sell electricity from biogas projects directly to farmers and nearby customers.
Innovation Ecosystem and Access to Capital
Enable and Promote Equity Crowdfunding: Attract private funding for new in-state companies by creating a securities exemption for equity crowdfunding and an online portal for businesses and investors.
Create Tax Incentives for Investment in Startups: Reduce or eliminate capital gains taxes for investments in targeted early-stage companies, such as utility-scale battery and biogas companies.
Improve Industry-Wide Participation in Apprenticeships: Provide fiscal incentives for companies to create apprenticeship programs, working directly with employers to tailor program guidelines, collaborating with colleges to create career pathways, and bolstering programs through industry-wide recognition.
Enable Dislocated Veterans to Get Back to Work: Facilitate partnerships between the North Carolina Department of Veterans Affairs, local workforce development boards, and community colleges to connect veterans and employers, especially in the advanced energy industry.
Expand Public-Private Training Partnerships with Local Community Colleges, Workforce Development Boards, and Employers: Address the skills gaps in the utility-scale battery sector by expanding public-private training partnerships. Employers could collaborate with community colleges to enhance the existing NCWorks Customized Training Program.
Enhance Higher Education Programs Relevant to Advanced Energy: Incorporate energy-related coursework into university curriculums and promote interdisciplinary collaboration. Establishing a battery technology degree program would provide workers with the specialized education the industry needs.