The North Carolina Department of Revenue gave a record number of tax credits last year for renewable energy use.
The $245 million awarded was a significant jump just before the deadline for the credit to expire.
Steve Kalland is the executive director of the Clean Energy Technology Center at N.C. State University.
"What we saw in North Carolina was a real explosion in growth in the solar energy technology use in the state, to a point where we actually became – and sometimes I have to pinch myself – but to a point where we actually became the second-largest solar state in the country behind California," Kalland said.
The credit helped establish a strong solar industry in the state and also affected other energy development.
"Most people don't realize that the tax credit also applied to a whole array of other technologies. Particularly, residential rooftop solar; it applied to geothermal heat pumps; it applied to wind turbines," Kalland said. "The loss of the tax credit will hurt those other resources, the ones that don't already have a well-established market."
Credits for development projects that began by 2016 will carry over for five years. Federal tax credits and a decrease in the cost of renewable energy technology also contributed to recent growth in the industry
Kalland also noted that last year's jump had to do with a trend in the size of renewable energy development projects.
"A few years ago, the biggest projects were in the kilowatts, then they were in the megawatts, but now we're seeing projects as large as 80 to 100 megawatts," he said.
The state Department of Revenue reported last year's credits had an economic impact of $1.7 billion.
"This 2016 tax year was kind of the peak year, with the most solar systems, the largest solar systems coming in for their first year," said Kalland. "What we will start to see now is a decline in the amount of that tax credit over the next 5 years, as systems start dropping off at the back end of that 5 year period."