A North Carolina House committee approved legislation that would eliminate the state’s property tax exemption for new utility-scale solar installations.
The House Finance Committee voted 12 to 8 to approve a committee substitute for House Bill 1213, advancing the bill to the House Rules Committee. The legislation targets the state’s long-standing 80% property tax exclusion for solar energy systems, setting a hard expiration date for new projects while grandfathering in existing operational assets.
The bill now heads to the House Rules Committee, where it must be approved before it can advance to the full House floor for a vote.
Under the current text, any solar project placed into service on or after July 1, 2027, will be fully subject to local property taxes. Existing solar facilities and those that achieve commercial operation before the deadline will continue to receive the tax abatement.
Lawmakers previously debated a phased step-down of the incentive. However, committee members shifted to a fixed cliff date to avoid retroactive financial impacts on projects currently under construction.
Supporters of the bill argue that the incentive has fulfilled its structural purpose since its inception in 2008. Representative Jimmy Dixon (R-Duplin) stated during the committee hearing that the local solar industry has matured over the last 16 years and no longer requires state-level tax support.
County governments are heavily backing the repeal to reclaim local revenue streams, particularly across rural regions where large-scale solar farms are concentrated. The North Carolina Association of County Commissioners estimates that local governments collectively forgo approximately $40 million in property tax revenue annually due to the current exclusion.
Clean energy advocates and developers warn that the sudden elimination of the tax break could restrict project deployment just as regional electricity demand begins to spike.
Representatives from Cypress Creek Energy testified that many pipeline projects are bound to long-term power purchase agreements (PPAs) that have already been finalized and approved by state regulators. Because these contract rates are locked, developers cannot easily recover or pass through unexpected property tax increases if completion timelines push past the mid-2027 deadline.
Opponents also noted that solar land leases provide stable, supplementary income for local farmers facing a volatile agricultural economy, helping offset rising operational costs for fuel and fertilizer.
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