Civitas Institute study estimates state requirements could cost N.C. more than 50,000 jobs.
Could Renewable Energy Mandates Hurt the Carolina Comeback?
Many things are going well in North
Carolina—unemployment is down, and lower business and individual tax rates are
coming in 2017—but an issue to watch is the state’s renewable energy mandates.
According to a recent Civitas Institute study, the state requirement
that 12.5 percent of electricity come from renewable energy by 2021 will
increase the cost of electricity, reduce economic output by billions of
dollars, and lead to the loss of thousands of jobs.
In 2007, legislators passed a bill
to establish renewable energy portfolio standards (RPS), which are also present
in 29 other states and the District of Columbia. RPS mandates require that a
percentage of energy be generated by wind, solar, and other renewable energy
sources in order to reduce greenhouse gas emissions. The mandate is being
phased in: 3 percent by 2012, 6 percent by 2016, 10 percent by 2018, and 12.5
percent by 2021 and onward. While this is a worthy goal, these energy sources
are more expensive. As a result, the Civitas Institute expects North Carolina’s
electricity prices to rise by 42 percent by 2020.
Data from the U.S. Energy
Information Administration has shown that this is also happening in other
states with mandatory RPS. Other states have also made moves to either cut RPS
or eliminate the requirements altogether. Legislation was introduced in 2015 to
freeze North Carolina’s RPS at current levels, but the bill failed and there
was no momentum for a new RPS bill in this year’s legislative session.
Key study findings for North
Carolina:
- RPS could decrease economic output by more than $6.6
billion in 2025. - RPS could cost the state more than 50,000 jobs in 2020
and 45,000 jobs in 2025. - RPS will increase North Carolina electricity costs by
$1.9 billion by 2020.
