How to Start a Solar Farm in North Carolina in 2024
Key Takeaways
- North Carolina ranks 4th in the U.S. for installed solar capacity, with strong potential for growth
- Farmers and landowners can lease land to solar developers or start their own solar projects
- Key steps include assessing your land, understanding regulations, securing financing and interconnection agreements
- Successful NC solar farms range from 5 to 80 MW and can generate $500-1000+ per acre annually in lease payments
- Incorporating pollinator-friendly ground cover, wildlife corridors, and grazing animals can maximize environmental co-benefits
- North Carolina’s solar policies, incentives, and agricultural heritage provide a strong foundation for solar farm success
Are you a North Carolina farmer or landowner looking to diversify your income and join the clean energy revolution?
Installing a solar farm on your property could be the perfect opportunity. North Carolina ranks 4th in the nation for installed solar capacity, with strong potential for continued growth.
By leasing your land to a solar developer or starting your own project, you can generate guaranteed revenue for 20-30 years while contributing to a more sustainable future.
In this article, we’ll walk you through the key steps to get a solar farm up and running on your North Carolina property.
Assess Your Land’s Solar Potential
The first step is evaluating if your property is suitable for a solar farm. Here’s what to look for:
- Size: Most utility-scale solar projects require at least 10-20 acres of relatively flat, unshaded land. However, smaller parcels of 5+ acres can still work for community-scale projects.
- Solar Exposure: Ideally, the site should have good southern exposure without obstructions like trees or buildings that could cast shade on the panels12.
- Proximity to Power Lines: To feed electricity into the grid, the solar farm will need to connect to nearby transmission or distribution power lines. The closer your property is to this infrastructure, the lower the interconnection costs1.
- Zoning and Land Use: Check your county’s zoning laws and comprehensive plan to ensure solar is a permitted use for your parcel. Most solar farms in NC are built on agricultural or vacant land.
If your land checks these boxes, the next step is getting a professional solar site assessment. Developers can analyze your property’s solar potential and identify any constraints using tools like GIS mapping and 3D modeling.
Many farmers choose to start by leasing a portion of their land to an experienced solar developer. The developer handles all the permitting, construction and maintenance, while you earn reliable lease payments of $500-1000+ per acre annually, depending on your location.
For example, the 80 MW Montgomery Solar project was built on a former tobacco farm, providing the owners with a new source of guaranteed income.
If you prefer to own the solar project yourself, partnering with a developer as a consultant is still recommended to navigate the complex process.
Doing your own project allows you to take advantage of federal tax credits and sell the electricity generated to your utility via a power purchase agreement.
Understand State & Local Regulations
Before breaking ground on your North Carolina solar farm, it’s crucial to familiarize yourself with the state and local regulations that will govern your project. Here are the key areas to consider:
State Solar Policies & Incentives
North Carolina offers several incentives to encourage solar development:
- The Duke Energy Solar Rebate Program provides rebates of $0.60/watt for residential, $0.50/watt for nonresidential, and $0.75/watt for nonprofit solar projects, with varying maximum incentive amounts.
- The state’s 35% Renewable Energy Tax Credit expired in 2015, but projects can still take advantage of the 30% federal Investment Tax Credit (ITC).
- North Carolina’s Renewable Energy and Energy Efficiency Portfolio Standard (REPS) requires investor-owned utilities to source 12.5% of their electricity from renewables by 2021, driving demand for solar.
County Zoning & Permitting
Solar zoning and permitting requirements vary by county in North Carolina. Key considerations include:
- Many counties allow solar farms in agricultural or industrial zones, but some require special use permits or restrict project size.
- Setbacks, screening, fencing, and decommissioning requirements differ by jurisdiction.
- Counties may have specific standards for ground cover, landscaping, signage, and lighting to mitigate potential impacts.
It’s important to meet early with your county planning department to understand the specific ordinances that will apply to your project.
Working with an experienced solar developer can also help navigate the permitting process.
Decommissioning Requirements
North Carolina’s 2023 solar decommissioning law (HB 130) establishes statewide requirements for the end-of-life management of utility-scale solar projects:
- Projects must submit a decommissioning plan prepared by a licensed engineer, including a cost estimate, timeline, and proposed financial assurance mechanism.
- Decommissioning must be completed within one year of the project ceasing operations, including removal of equipment, restoration of the property, and proper recycling or disposal of materials.
- Owners must provide financial assurance to cover decommissioning costs in the form of insurance, surety bonds, letters of credit, or other mechanisms.
While the state law sets a baseline, counties can adopt more stringent solar decommissioning requirements. Understanding these obligations upfront is key to planning for the full lifecycle of your project.
By carefully researching North Carolina’s solar policies, incentives, zoning, and decommissioning requirements, you can ensure your project is in compliance and set up for long-term success.
Partnering with reputable solar developers, engineers, and local officials can help you navigate the regulatory landscape and bring your solar farm vision to fruition.
Evaluate Your Financing Options
Financing is a critical component of starting a solar farm in North Carolina. The upfront costs can be significant, but there are several options available to make your project economically viable. Here are the main financing routes to consider:
Leasing to a Solar Developer
Leasing your land to a solar developer is the simplest financing option. The developer covers all the upfront costs of permitting, construction, and maintenance, while you receive guaranteed lease payments for 20-30 years. Lease rates in North Carolina typically range from $500-1000+ per acre annually, depending on your location and the project’s size.
Pros:
- No upfront cost to the landowner
- Guaranteed long-term income stream
- Developer handles all permitting, construction, and maintenance
- Minimal risk and responsibilities for the landowner
Cons:
- Lower long-term returns compared to owning the project yourself
- Less control over the project’s design and operation
- Longer-term commitment of your land
Owning the Solar Project
If you have the capital available, owning your solar farm can provide greater long-term returns. You’ll be responsible for the upfront costs of development and construction, but you’ll own the electricity generated and can sell it directly to your utility via a power purchase agreement.
Pros:
- Higher long-term income potential
- Ability to take advantage of federal tax credits and depreciation benefits
- Greater control over the project’s design and operation
- Potential to sell the project in the future
Cons:
- Significant upfront capital required
- Higher risk and responsibilities for the owner
- Requires more time and expertise to navigate permitting and construction
Government Incentives & Financing Programs
There are several government incentives and financing programs available to help offset the costs of solar development in North Carolina:
- The federal Investment Tax Credit (ITC) provides a 30% tax credit for solar projects.
- The USDA’s Rural Energy for America Program (REAP) offers grants and loan guarantees for solar projects in rural areas.
- The NC Clean Energy Technology Center maintains a database of state and federal incentives for renewable energy projects.
Exploring these incentives and financing programs can help make your solar farm more economically feasible, whether you choose to lease or own the project.
Case Study: Apple’s 17.5 MW Solar Farm in Claremont, NC
In 2015, Apple partnered with Sun Power to build a 17.5 MW solar farm on 100 acres of land in Claremont, NC. The project helped power Apple’s data center in Maiden, NC, and supported the company’s goal of sourcing 100% renewable energy for its operations.
Apple worked with Sun Power and local contractors to navigate the permitting and interconnection process with Duke Energy. They also implemented pollinator-friendly ground cover and wildlife-friendly fencing to enhance the project’s environmental benefits.
By carefully evaluating your financing options and exploring available incentives, you can find the right model to bring your North Carolina solar farm to life. Whether leasing to a developer or owning the project yourself, solar can provide a reliable source of long-term income while contributing to a cleaner energy future.
Construct Your Solar Farm
Once you’ve secured interconnection and a power purchase agreement, it’s time to build your solar farm. Here are the key steps in the construction process:
Hire Experienced Professionals
Constructing a utility-scale solar farm is a complex undertaking that requires specialized expertise. It’s essential to work with experienced solar developers, engineers, and construction professionals who have a track record of successfully completing projects similar to yours. Look for companies with:
- Experience designing and building solar farms in North Carolina
- Knowledge of local permitting and interconnection processes
- Established relationships with equipment suppliers and subcontractors
- Strong project management and communication skills
Hiring a reputable Engineering, Procurement and Construction (EPC) firm can streamline the process by providing a single point of responsibility for the entire project.
Secure Permits & Approvals
Before breaking ground, ensure that all necessary permits and approvals have been secured from the relevant authorities. These may include:
- Building and electrical permits from your county or municipality
- Erosion and sediment control plans
- Stormwater management permits
- Approval from the North Carolina Utilities Commission
- Interconnection agreement with your utility
Your solar developer should be well-versed in navigating the permitting process and will typically handle this step, but it’s important to confirm that all approvals are in place before starting construction.
Maximize Environmental Benefits
In addition to generating clean energy, solar farms can be designed to provide environmental co-benefits. Consider implementing these strategies:
- Use pollinator-friendly ground cover like native wildflowers and grasses to create habitat for bees, butterflies and other pollinators. North Carolina offers a voluntary Solar Site Pollinator Habitat Certification.
- Incorporate wildlife corridors and fencing that allows small animals to safely pass through the site.
- Plant vegetative screening to minimize visual impact and provide additional habitat.
- Utilize grazing animals like sheep to control vegetation and reduce mowing needs. The 40 MW O2 emc solar farm in Biscoe, NC uses sheep to maintain the grounds.
40 MW O2 emc solar farm in Biscoe, NC
By taking a holistic approach to site design and management, you can maximize the environmental benefits of your solar farm beyond just clean energy production.
By hiring experienced professionals, securing all necessary approvals, and incorporating environmental co-benefits into the design, Apple was able to successfully construct a solar farm that generates clean energy while also supporting biodiversity.
With your team in place and permits secured, you’re ready to begin construction on your North Carolina solar farm. By following these best practices and learning from successful projects like Apple’s, you can bring your renewable energy vision to life.
Challenges and Pitfalls
Common challenges faced by North Carolina farmers and business owners when starting a solar farm include:
- Land use considerations and loss of agricultural land. Converting farmland to solar farms takes that land out of agricultural production, which can impact the local agricultural economy. Farmers must carefully weigh the long-term implications of transitioning land from crops to solar1.
- Tax implications of changing land use. Agricultural land in NC is taxed at a lower Present Use Value (PUV) rate. When converted to non-agricultural uses like solar farms, 3 years of back taxes at the higher commercial rate become due, which landowners must be prepared to pay.
- Possibility of solar farm abandonment. If a solar project fails within the first few years, the landowner may face risks, costs, and limitations in reverting the land back to agricultural use. Decommissioning a failed solar farm can be challenging.
- Permitting and local opposition. Solar developers sometimes face permitting challenges and opposition from local communities concerned about loss of farmland or changes to the rural landscape. Over 1.7 GW of solar capacity was canceled in 2021 due to such issues.
- Balancing energy production with agricultural uses. To keep land in the PUV tax program, farmers must maintain agricultural production alongside the solar panels, such as grazing or pasture harvest. This adds management complexity and costs.
- Transmission infrastructure availability. Solar farms need to connect to transmission lines to sell their power. Farmers must ensure their property has access to this grid infrastructure or face additional costs to secure interconnection.
- Patchwork of local and state regulations. Solar facilities are subject to a disparate set of siting and permitting rules that vary by locality, which can create confusion and obstacles for farmers pursuing projects.
- Upfront capital costs. While leasing land to a developer avoids upfront costs, farmers who want to own their own solar projects face significant capital expenditures to launch the farm.
- Potential environmental impacts. Large-scale solar farms can impact wildlife habitats and migration corridors. Farmers may need to compromise on project design and invest in mitigation measures like wildlife-friendly fencing.
While solar farms offer attractive long-term revenue potential for NC farmers, the transition involves navigating land use changes, tax implications, local regulations, upfront costs, and balancing agricultural and environmental considerations. Careful planning is required to overcome these hurdles.
Wrap-up
Starting a solar farm in North Carolina can be a smart investment for farmers and landowners looking to diversify their income streams and contribute to the state’s growing clean energy economy.
By following the steps outlined in this guide, you can turn your unused land into a profitable solar project that generates reliable revenue for decades to come.
To recap, the key steps to starting a solar farm in North Carolina are:
- Assess your land’s solar potential by evaluating its size, solar exposure, proximity to power lines, and zoning regulations.
- Understand the state and local policies, incentives, and permitting requirements that apply to your project.
- Evaluate your financing options, whether leasing to a solar developer or owning the project yourself, and explore available government incentives and programs.
- Secure interconnection and power purchase agreements with your utility to ensure a long-term market for your solar energy.
- Construct your solar farm by hiring experienced professionals, securing all necessary permits and approvals, and incorporating environmental co-benefits into the design.
North Carolina’s solar industry is poised for continued growth, with the state’s favorable policies, abundant sunshine, and strong agricultural heritage providing a solid foundation for success.
If you’re ready to take the next step, consult with experienced solar developers and local officials to assess your land’s potential and begin navigating the process. With careful planning and execution, your North Carolina solar farm can be a shining example of the power of renewable energy to transform our economy and environment for the better.
By following the roadmap laid out in this guide and tapping into the expertise of North Carolina’s solar industry professionals, you can turn your vision of a profitable, sustainable solar farm into a reality.
The future of clean energy is bright in North Carolina, and by joining the solar revolution, you can help lead the way to a better tomorrow.
Ryan Fox is a leading solar energy consultant based in Raleigh, North Carolina. With over 10 years of experience in the renewable energy industry, Ryan has established himself as a trusted expert in helping both residential and commercial customers transition to clean, affordable solar power.
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