GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 131
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Short Title: Reenact Solar Energy Tax Credit. |
(Public) |
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Sponsors: |
Representatives Buansi, Harrison, Price, and Longest (Primary Sponsors). For a complete list of sponsors, refer to the North Carolina General Assembly web site. |
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Referred to: |
Rules, Calendar, and Operations of the House |
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February 18, 2025
A BILL TO BE ENTITLED
AN ACT to reenact a solar energy tax credit.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 105‑129.16A is reenacted as it existed immediately before its expiration and reads as rewritten:
"§ 105‑129.16A. Credit for investing in renewable
energy property.solar energy equipment.
(a) Credit. – A taxpayer
that has constructed, purchased, or leased renewable energy property qualifying
solar energy equipment is allowed a credit equal to thirty‑five percent
(35%) of the cost of the property equipment if the property equipment
is placed in service in this State during the taxable year. In the case of renewable
energy property qualifying solar energy equipment that serves a
nonbusiness purpose, the credit must be taken for the taxable year in which the
property equipment is placed in service. For all other renewable
energy property, qualifying solar energy equipment, the entire
credit may not be taken for the taxable year in which the property equipment
is placed in service but must be taken in five equal installments beginning
with the taxable year in which the property equipment is placed
in service. Upon request of a taxpayer that leases renewable energy
property, qualifying solar energy equipment, the lessor of the property
equipment must give the taxpayer a statement that describes the renewable
energy property qualifying solar energy equipment and states the
cost of the property. equipment. No credit is allowed under this
section to the extent the cost of the renewable energy property qualifying
solar energy equipment was provided by public funds. For the purposes of
this section, "public funds" does not include grants made under
section 1603 of the American Recovery and Reinvestment Tax Act of 2009."qualifying
solar energy equipment" is equipment described in G.S. 105‑129.15(7)e.
(b) Expiration. – If, in one
of the years in which the installment of a credit accrues, the renewable
energy property qualifying solar energy equipment with respect to
which the credit was claimed is disposed of, taken out of service, or moved out
of State, the credit expires and the taxpayer may not take any remaining
installment of the credit. The taxpayer may, however, take the portion of an
installment that accrued in a previous year and was carried forward to the
extent permitted under G.S. 105‑129.17.
(c) Ceilings. – The credit allowed by this section may not exceed the applicable ceilings provided in this subsection.
(1) Business. – A ceiling of
two million five hundred thousand dollars ($2,500,000) applies to each
installation of renewable energy property qualifying solar energy
equipment placed in service for a business purpose. Renewable energy
property Qualifying solar energy equipment is placed in service for
a business purpose if the useful energy generated by the property equipment
is offered for sale or is used on‑site for a purpose other than
providing energy to a residence.
(2) Nonbusiness. – The
following ceilings apply to renewable energy property qualifying solar
energy equipment placed in service for a nonbusiness purpose:
a. One thousand four hundred dollars ($1,400) per dwelling unit for solar energy equipment for domestic water heating, including pool heating.
b. Three thousand five hundred dollars ($3,500) per dwelling unit for solar energy equipment for active space heating, combined active space and domestic hot water systems, and passive space heating.
c. Eight thousand four hundred dollars ($8,400)
for each installation of geothermal equipment.
d. Ten thousand five hundred dollars ($10,500) for
each installation of any other renewable energy property.
(3) Eco‑Industrial
Park. – A ceiling of five million dollars ($5,000,000) applies to each
installation of renewable energy property qualifying solar energy
equipment placed in service at an Eco‑Industrial Park certified under
G.S. 143B‑437.08 for a business purpose described in subdivision (1)
of this subsection.
(d) No Double Credit. – A
taxpayer that claims any other credit allowed under this Chapter with respect
to renewable energy property qualifying solar energy equipment may
not take the credit allowed in this section with respect to the same property.
equipment. A taxpayer may not take the credit allowed in this
section for renewable energy property qualifying solar energy
equipment the taxpayer leases from another unless the taxpayer obtains the
lessor's written certification that the lessor will not claim a credit under
this Chapter with respect to the property.equipment.
(e) Sunset. – Except for taxpayers covered by
subsection (f) of this section, this section is repealed effective for renewable
energy property placed into service on or after January 1, 2016.
(f) Delayed Sunset. – This section is repealed
effective for renewable energy property placed in service on or after January
1, 2017, except as provided in subsection (g) of this section.
(g) Alternate Delayed Sunset. – This section is
repealed effective for renewable energy property utilizing renewable biomass
resources placed in service on or after May 5, 2017.
(h) Delayed Sunset Conditions. – A taxpayer is
eligible for the delayed sunset provided by subsection (f) or (g) of this
section if the taxpayer makes a timely application for the extension, pays the
application fee, and meets both of the following conditions on or before
January 1, 2016: (i) incurred at least the minimum percentage of costs of the
project and (ii) completed at least the minimum percentage of the physical
construction of the project. For a project with a total size of less than 65
megawatts of direct current capacity, the minimum percentage of incurred costs
and partial construction is at least eighty percent (80%). For a project with a
total size of 65 megawatts or more of direct current capacity, the minimum
percentage of incurred costs and partial construction is at least fifty percent
(50%).
An application and payment must
be filed with the Secretary on or before October 1, 2015. The application must
include the location of the project, an estimate of the total cost of the
project, the total anticipated credit to be claimed, and the total size in
megawatt capacity of each project proposed or under construction. The
nonrefundable fee to be paid with the application is one thousand dollars
($1,000) per megawatt of capacity, with a minimum fee of five thousand dollars
($5,000).
A taxpayer must provide the
documentation required under this subsection to the Department on or before
March 1, 2016, to verify that the taxpayer meets the minimum percentage of incurred
costs and partial construction required to be eligible for the sunset
extension:
(1) A written certification signed by the taxpayer
that, prior to January 1, 2016, at least the minimum percentage of the physical
construction of the project was completed and that at least the minimum
percentage of the total cost of the project was incurred.
(2) A notarized copy of a written report prepared by
an independent engineer duly licensed in the State of North Carolina with
expertise in the design and construction of installations of renewable energy
property stating that at least the minimum percentage of the physical
construction of the project was completed prior to January 1, 2016.
(3) A notarized copy of a written report prepared by
a certified public accountant duly licensed to practice in the State of North
Carolina with expertise in accounting for and taxation of renewable energy
property and that was prepared in accordance with AT Section 201 of the
American Institute of Certified Public Accountants Standards for Agreed‑Upon
Procedures Engagements stating that the minimum percentage of the total cost of
the project was paid or incurred as determined under Section 461 and other
relevant sections of the Code prior to January 1, 2016."
SECTION 2. This act is effective for taxable years beginning on or after January 1, 2025.