Reenact Solar Energy Tax Credit.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 131

Short Title: Reenact Solar Energy Tax Credit. (Public)
Sponsors: Representatives Buansi, Harrison, Price, and Longest (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Rules, Calendar, and Operations of the House
February 18, 2025
*H131-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO REENACT A SOLAR ENERGY TAX CREDIT. 2
The General Assembly of North Carolina enacts: 3
SECTION 1. G.S. 105-129.16A is reenacted as it existed immediately before its 4
expiration and reads as rewritten: 5
"§ 105-129.16A. Credit for investing in renewable energy property.solar energy equipment. 6
(a) Credit. – A taxpayer that has constructed, purchased, or leased renewable energy 7
property qualifying solar energy equipment is allowed a credit equal to thirty-five percent (35%) 8
of the cost of the property equipment if the property equipment is placed in service in this State 9
during the taxable year. In the case of renewable energy property qualifying solar energy 10
equipment that serves a nonbusiness purpose, the credit must be taken for the taxable year in 11
which the property equipment is placed in service. For all other renewable energy property, 12
qualifying solar energy equipment, the entire credit may not be taken for the taxable year in 13
which the property equipment is placed in service but must be taken in five equal installments 14
beginning with the taxable year in which the property equipment is placed in service. Upon 15
request of a taxpayer that leases renewable energy property, qualifying solar energy equipment, 16
the lessor of the property equipment must give the taxpayer a statement that describes the 17
renewable energy property qualifying solar energy equipment and states the cost of the property. 18
equipment. No credit is allowed under this section to the extent the cost of the renewable energy 19
property qualifying solar energy equipment was provided by public funds. For the purposes of 20
this section, "public funds" does not include grants made under section 1603 of the American 21
Recovery and Reinvestment Tax Act of 2009."qualifying solar energy equipment" is equipment 22
described in G.S. 105-129.15(7)e. 23
(b) Expiration. – If, in one of the years in which the installment of a credit accrues, the 24
renewable energy property qualifying solar energy equipment with respect to which the credit 25
was claimed is disposed of, taken out of service, or moved out of State, the credit expires and the 26
taxpayer may not take any remaining installment of the credit. The taxpayer may, however, take 27
the portion of an installment that accrued in a previous year and was carried forward to the extent 28
permitted under G.S. 105-129.17. 29
(c) Ceilings. – The credit allowed by this section may not exceed the applicable ceilings 30
provided in this subsection. 31
(1) Business. – A ceiling of two million five hundred thousand dollars 32
($2,500,000) applies to each installation of renewable energy property 33
qualifying solar energy equipment placed in service for a business purpose. 34
Renewable energy property Qualifying solar energy equipment is placed in 35
General Assembly Of North Carolina Session 2025
Page 2 House Bill 131-First Edition
service for a business purpose if the useful energy generated by the property 1
equipment is offered for sale or is used on -site for a purpose other than 2
providing energy to a residence. 3
(2) Nonbusiness. – The following ceilings apply to renewable energy property 4
qualifying so lar energy equipment placed in service for a nonbusiness 5
purpose: 6
a. One thousand four hundred dollars ($1,400) per dwelling unit for solar 7
energy equipment for domestic water heating, including pool heating. 8
b. Three thousand five hundred dollars ($3,500) per dwelling unit for 9
solar energy equipment for active space heating, combined active 10
space and domestic hot water systems, and passive space heating. 11
c. Eight thousand four hundred dollars ($8,400) for each installation of 12
geothermal equipment. 13
d. Ten thousand five hundred dollars ($10,500) for each installation of 14
any other renewable energy property. 15
(3) Eco-Industrial Park. – A ceiling of five million dollars ($5,000,000) applies 16
to each installation of renewable energy property qualifying solar energy 17
equipment placed in service at an Eco -Industrial Park certified under 18
G.S. 143B-437.08 for a business purpose described in subdivision (1) of this 19
subsection. 20
(d) No Double Credit. – A taxpayer that claims any other credit allowed u nder this 21
Chapter with respect to renewable energy property qualifying solar energy equipment may not 22
take the credit allowed in this section with respect to the same property. equipment. A taxpayer 23
may not take the credit allowed in this section for renewable energy property qualifying solar 24
energy equipment the taxpayer leases from another unless the taxpayer obtains the lessor's written 25
certification that the lessor will not claim a credit under this Chapter with respect to the 26
property.equipment. 27
(e) Sunset. – Except for taxpayers covered by subsection (f) of this section, this section 28
is repealed effective for renewable energy property placed into service on or after January 1, 29
2016. 30
(f) Delayed Sunset. – This section is repealed effective for renewable energy property 31
placed in service on or after January 1, 2017, except as provided in subsection (g) of this section. 32
(g) Alternate Delayed Sunset. – This section is repealed effective for renewable energy 33
property utilizing renewable biomass resources placed in service on or after May 5, 2017. 34
(h) Delayed Sunset Conditions. – A taxpayer is eligible for the delayed sunset provided 35
by subsection (f) or (g) of this section if the taxpayer makes a timely application for the extension, 36
pays the application fee, and meets both of the following conditions on or before January 1, 2016: 37
(i) incurred at least the minimum percentage of costs of the project and (ii) completed at least the 38
minimum percentage of the physical construction of the project. For a project with a total size of 39
less than 65 megawatts of direct current capacity, the minimum percentage of incurred costs and 40
partial construction is at least eighty percent (80%). For a project with a total size of 65 megawatts 41
or more of direct current capacity, the minimum percentage of incurred costs and partial 42
construction is at least fifty percent (50%). 43
An application and payment must be filed with the Secretary on or before October 1, 2015. 44
The application must include the location of the project, an estimate of the total cost of the project, 45
the total anticipated credit to be claimed, and the total size in megawatt capacity of each project 46
proposed or under construction. The nonrefundable fee to be paid with the application is one 47
thousand dollars ($1,000) per megawatt of capacity, with a minimum fee of five thousand dollars 48
($5,000). 49
General Assembly Of North Carolina Session 2025
House Bill 131-First Edition Page 3
A taxpayer must provide the documentation required under this subsection to the Department 1
on or before March 1, 2016, to verify that the taxpayer meets the minimum percentage of incurred 2
costs and partial construction required to be eligible for the sunset extension: 3
(1) A written certification signed by the taxpayer that, prior to January 1, 2016, at 4
least the minimum percentage of the physical construction of the project was 5
completed and that at least the minimum percentage of the total cost of the 6
project was incurred. 7
(2) A notarized copy of a written report prepared by an independent engineer duly 8
licensed in the State of North Carolina with expertise in the design and 9
construction of installations of renewable energy property stating that at least 10
the minimum percentage of the physical construction of the project was 11
completed prior to January 1, 2016. 12
(3) A notarized copy of a written report prepared by a certified public accountant 13
duly licensed to practice in the State of North Carolina with expertise in 14
accounting for and taxation of renewable energy property and that was 15
prepared in accordance with AT Section 201 of the American Institute of 16
Certified Public Acco untants Standards for Agreed -Upon Procedures 17
Engagements stating that the minimum percentage of the total cost of the 18
project was paid or incurred as determined under Section 461 and other 19
relevant sections of the Code prior to January 1, 2016." 20
SECTION 2. This act is effective for taxable years beginning on or after January 1, 21
2025. 22