1. 2013 NCDOR Advanced Personal & Real Property Seminar Bringing government, industry, and the public together to make North Carolina a leader in solar energy development Miriam Makhyoun Manager of Market Intelligence NC Sustainable Energy Association Miriam@EnergyNC.org Office: (919)-832-7601 x114 Lance Williams Manager of Site Development Strata Solar lwilliams@stratasolar.com Office: (919)-960-6015

2. Jobs in NC Clean Energy Industries Source: North Carolina Sustainable Energy Association 2012 Clean Energy Industries Census In 2012, the clean energy sector conservatively generated over $3.7 billion in North Carolina annual gross revenue from clean energy activities. North Carolina’s clean energy sector accounts for over 15,200 full-time equivalent (FTE) employees as of September, 2012. Over 200 companies indicate that they provide products and services to the national and international marketplace.

3. ~2,000 employees in the NC Solar Industry Business Type Number of companies reporting activity in: Proportion of industry active in: Average FTE Total FTE Employees Share of State Clean Energy FTE Employees Research and development:29827%2.673,58723% Manufacturing:13812%14.113,28221% Energy efficient design, building, or construction of new buildings: 59153%1.892,15114% Energy efficiency retrofitting of existing buildings:42938%1.791,79012% Clean energy systems installer, designer, or developer: 35232%2.111,2698% Clean energy systems retailer or distributor:1059%3.086794% Clean energy system owner or operator (including cogeneration systems): 11210%5.831,2768% Education, services and consulting (e.g. law, engineering, finance): 32829%2.101,2398% Business Focus2353 Solar:50145%1.871,98513% Wind:12111%4.808055% Biomass:15114%6.041,1427% Hydroelectric:636%3.912362% Geothermal / ground source heat pumps:23221%1.445984% Smart Grid or AMI/AMR infrastructure:1009%10.011,91513% Energy efficiency / building sciences:77569%3.067,21847% Energy storage (including fuel cells):535%6.578726% Alternative fuel vehicles (including infrastructure and components): 575%3.755023% Note: percentages and numbers may contain rounding artifacts

4. North Carolina Leads in Solar 501 solar companies, employing about 2,000 people North Carolina Ranked 6 th in nation for solar with 229 MW installed capacity and 5 th for annual capacity in 2012 with 132 MW Mostly from utility- scale projects Source: SEIA/GTM Research “U.S. Solar Market Insight 2012 Year-In-Review”

5. NC Registered Solar PV by Year 21 Megawatts (MW) of Registered Solar PV Capacity in North Carolina Expected Online from 2006-2012 ExpectedCapacityNumber ofSolar PV System Capacity Year Online MW DC (a)Systems 10 kW or Less Greater than 10 kW through 500 kW Greater than 500 and under 1 MW 1 MW and Greater 20060.262422200 20070.325450400 20085.49116105713 200925.881971672415 201028.433512835729 201191.59505379107613 2012407.45638483641378 TOTAL559.421,8851,48926523108 Notes: (a) Solar PV systems produce electricity in direct current (DC), which is converted by inverters to alternating current (AC), the typical current used throughout the U.S. electric grid. As a result, it is normal industry practice to report solar PV capacity in DC units. For the purpose of this report, for systems registered with AC capacity and an unknown DC capacity an 84% derate factor was assumed. 500 MW produces 717,300 MWh a year—enough to power over 59,775 homes! This equates to the displacement of 44,829 tons of CO 2 equivalent a year or the planting of 224,145 trees per year! Sources: North Carolina Utilities Commission, Carbonify, National Renewable Energy Laboratory System Advisor Model

6. Types of Solar: Solar Thermal vs. PV Thermal Heats water instead of creating electricity Slightly thicker panels than PV Photovoltaic (PV) Converts sunlight into electricity

7. Different Project Types 6.4 MW Project on Fuquay Farms, NC- Strata Solar 4 kW rooftop solar array- Morganton, NC 1 MW commercial rooftop project on an IKEA in Charlotte, NC- Strata Solar

8. Examples 1.Residential Rooftop 2 kW 8-10 panels 2.Commercial Rooftop 974 kW ~4,000 panels ~5.8 acres 3.Utility Ground-mount 1-20 MW (1,000- >20,000 kW) 3,000->80,000 panels ~6->100 acres of land Source: Canadian Solar Source: Inhabitat.com

9. Solar Photovoltaic Installed Cost per Watt *Sources: North Carolina Utilities Commission, North Carolina Sustainable Energy Association a) Barbose et. al, Tracking the Sun, Lawrence Berkeley National Laboratory, 2012 Year ≤5 kW (Media n) 5-10 kW (Median) 10-150 kW (Median) 150-1000 kW (Median) >1000 kW (Median) Comparison with selected data 200610.00****$8.70 (a) 200710.03****$8.80 (a) 20088.938.76***$8.40 (a) 20098.487.667.50**$8.10 (a) 20107.006.286.02**$6.90 (a) 20116.766.035.024.494.35$6.10 (a) 20126.275.134.953.753.54

10. Equipment: Income Capitalization Approach

11. Equipment: Income Capitalization Approach, 2

12. Social and Environmental Impacts: Partnering with the Community Counties (building and electrical permits) NC Department of Environment and Natural Resources (land and water) NC Department of Transportation (driveways) Economic and Work Force Development and others Community colleges Local contractors Farmers and businesses Source: Strata Solar, Kings Mountain, NC, 5 MW

13. Property Values How do ground-mounted solar PV arrays adjacent to residential neighborhoods influence the property values in those neighborhoods? Bottom Line: No research was found specific to ground- mounted solar PV and property values. Municipalities that adopt zoning for solar facilities may want to consider encouraging project developers to include screening vegetation along site borders to minimize visual impacts on surrounding neighborhoods. U.S. Department of Energy Lawrence Berkeley National Laboratory concluded that household solar installation actually increases home property values. December 2012, Massachusetts Department of Energy Resources, Massachusetts Department of Environmental Protection, Massachusetts Clean Energy Center

14. Conduct geo studies on the soil to determine if it can support pile-driving; using concrete as little as possible (e.g. inverter pads) Disturb as little land as possible Leave as much existing ground cover as possible Agriculture is known to be more damaging to the soil than solar farms Protecting the Land: Measures Ensuring the Natural Environment Source: REP Energy

15. Working with the Department of Transportation when a temporary road touches another major road Temporary roads can be plastic laydowns instead of gravel Leave as much existing ground cover as possible Protecting the Land: Measures Ensuring the Natural Environment Source: 123rf

16. Double Cropping: Piedmont Biofuels & Southern Energy Management From protecting tomatoes from rain (tomatoes do better if only their roots are fed), through shading cooler weather crops like salad and arugula, to providing support for trellises and other crop infrastructure—Sami Grover Pittsboro, NC

17. *Ownership, Size, Income, and Sound Management Test Agricultural land requires at least one 10-acre tract in actual production. The gross income required from agriculture is $1,000. Example: If a solar facility is in the same 15-acre parcel and 10 is covered by a solar facility, $1,000 gross income would allow it to pass the income test but since it does not pass the size test, it does not get PUV. If reversed—5 acres for solar and 10 for farming— it would pass both tests. Present-Use Value for Agriculture Present Use Value Program Guide: http://www.dor.state.nc.us/publications/puv_guide.pdf

18. If owner is non-qualifying a rollback of three years plus current tax year’s taxes are due. Four categories of qualifying owners: A. Individuals B. Certain Business Entities C. Certain Trusts and Testamentary Trusts D. Certain Tenants in Common If owned by a business, “it seems reasonable that at least 50% of the business must be farming related, but the statutes do not explicitly make that statement.” Qualifying Owners for PUV Present Use Value Program Guide: http://www.dor.state.nc.us/publications/puv_guide.pdf

19. Livestock: A Symbiotic Relationship at SAS

20. A use for underused or no longer arable land A net tax benefit through taxable infrastructure that does not burden existing infrastructure Job-creation and training/certification in often rural areas It helps farmers: Out of over 7,000 U.S. farms who responded to the 2009 USDA On-Farm Census stating they utilize solar energy, North Carolina had 104 farms with solar, 67 with PV panels; 55 with solar thermal panels It saves businesses and residents money: Over the last decade, utility electricity prices have risen by 3% per year, while the cost of solar PV continues to decrease (30% in North Carolina from 2007—2011, according to the North Carolina Utilities Commission Docket Filings) Social Benefits of Solar PV

21. NC Department of Revenue Contacts Michael Brown michael.brown@dornc.com 919.733.7711 David Duty david.duty@dornc.com For More Information

22. I.Solar farm leases 35 acres of a 42-acre parcel. 30 acres of the property was farmed, all of which is now part of the 35- acre solar farm. Any change to real property value? I.Solar farm leases 35 acres of a 42-acre parcel. Seven acres is still being farmed with a crop value of $500/acre/year. Any change to real property value? Scenarios of Present Use Values

23. III.Lease 35-acres, have 28-acres within the security fence, and plant soy beans on the remaining 7 acres. The solar farm operator leases the 7 acres outside of the fence to a farmer for rental income of $100 per acre. The farmer has gross revenue per acre on the farm of $500 per acre. Any change to real property value? Does it differ if the landowner is the “farmer” or just leases it to the “farmer”? IV.Present property is 53 acres not in present use but out in the country with Ag/Light Residential zoning. Solar Farm buys 35 acres of land and builds a solar farm. Any change to the real property tax value on either remaining parcel (35-acre parcel, and 18-acre parcel)? Scenarios of Present Use Values, 2

24. V.Present property owns 53 acres not in present use but out in the country Ag/Light Residential zoning. Solar Farm buys 35 acres of land, zones that 35 acres only as light Industrial, and builds a solar farm. Any change to the real property tax value on either remaining parcel (35-acre parcel, and 18-acre parcel)? VI.Solar farm leases 35-acres of a 1000-acre parcel, which is mostly farmed. Any change in the real property value of the 1000-acre parcel? Scenarios of Present Use Values, 3

25. VII.Solar farm subdivides and leases 35-acres of a 1000-acre parcel, which is mostly farmed. Any change in the real property value to either the 35-acre solar farm new parcel or the 965- acre parcel still being farmed? Scenarios of Present Use Values, 4

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