House Bill 131 would reenact North Carolina’s solar energy tax credit by restoring G.S. 105-129.16A, which had previously expired. The bill allows a taxpayer that constructs, purchases, or leases qualifying solar energy equipment to claim a credit equal to 35% of the equipment’s cost if placed in service in North Carolina during the taxable year. For nonbusiness property, the credit is generally taken in the year the equipment is placed in service; for other property, it is taken in five equal annual installments. The bill also preserves existing rules limiting the credit when the equipment is funded with public money, requiring lessors to provide cost statements, and preventing taxpayers from claiming the credit on the same property if another credit under the same chapter is taken.
The reenacted credit includes several caps and eligibility rules. Business installations are subject to a $2.5 million ceiling per installation, while nonbusiness installations have separate caps for domestic water heating, space heating, geothermal equipment, and other renewable energy property. A higher $5 million ceiling applies to qualifying installations at certified Eco-Industrial Parks. The bill also carries forward the prior sunset and delayed-sunset framework, including provisions that had extended eligibility for certain projects that had already reached specified construction and cost thresholds before the earlier expiration dates. The act is effective for taxable years beginning on or after January 1, 2025.
Impact
HB131 would amend North Carolina tax law by reinstating a previously expired income tax credit in G.S. 105-129.16A for solar energy equipment and related renewable energy property. Its practical effect would be to reduce state income tax liability for eligible taxpayers who place qualifying equipment in service in North Carolina, while also continuing statutory limits on credit amounts, installment timing, public-funds restrictions, and anti-double-dipping rules. The bill would affect homeowners, businesses, lessors and lessees of solar equipment, and developers of renewable energy projects, including projects at certified Eco-Industrial Parks.
Sentiment
The available record shows no committee debate or recorded votes, so there is no direct evidence of opposition or support from the legislative process beyond the bill’s introduction and referral. Based on the bill’s sponsor list and subject matter, the measure appears to be a pro-renewable-energy tax incentive proposal intended to revive a prior credit for solar investment. The absence of transcripts or votes means sentiment can only be inferred from the bill’s purpose, not from formal legislative discussion.
Contention
The main policy issue embedded in the bill is whether North Carolina should restore a tax credit that had already expired, which would lower state revenue while subsidizing solar and other qualifying renewable energy investments. Potential points of contention include the size of the credit, the business and nonbusiness caps, the special treatment for Eco-Industrial Parks, and whether public funds should be allowed to support projects that also receive the credit. Another likely issue is fairness and fiscal impact: supporters may view the credit as a tool to encourage clean energy development and investment, while critics may question whether the state should reinstate a targeted tax expenditure after prior sunset dates had passed.