NC solar industry faces political and utility headwinds as demand grows

The sun might not be shining as brightly on NC’s solar companies these days, but officials say the future remains bright

• The solar energy industry in North Carolina is facing challenges due to shifting political policies and changes in utility programs.
• Recent policy changes include the end of a 30% federal residential solar tax credit and new utility rules limiting payments for excess power.
• Despite these headwinds, supporters say demand for solar remains strong due to rising electricity costs and overall energy needs.

For those renewable energy supporters and those in the industry, it’s known as the “solar coaster.”

Just like a roller coaster, the term refers to the inherent volatility found in the solar energy industry due to shifting political fortunes, supply chain issues, changing utility programs, and the often fluctuating financing climate for consumers and businesses.

It is fair to say the residential solar market in North Carolina has seen those ups and downs over the past few years, especially since President Trump returned to the White House in January 2025.

But renewable energy and solar supporters say it’s much too early to say the sun is setting on the industry, especially as North Carolina’s energy demand from businesses and population growth surges and the Tar Heel State’s warming climate sees cooling systems working overtime during the hot Carolina summer.

“We’re finding ourselves in this cycle again,” said Matt Abele, executive director of the N.C. Sustainable Energy Association. “But despite this significant shift in policy, there’s a really strong demand for clean energy at the residential level and on the commercial side, and that’s really driven by the rising electricity costs customers are seeing and the growing demand for new power generation.”

Where do things stand today?

According to the National Weather Service, Wilmington sees more than 200 sunny days a year. Of that number, 157 days average temperatures of 80 degrees or greater, with 45 of those pushing past 90 degrees. The Port City also has the highest annual percent average of possible sunshine in North Carolina, just beating Charlotte.

In other words, Wilmington and North Carolina as a whole are a great market for solar power.

For several decades, that was true. Solar farms sprouted amid the crop fields of Eastern North Carolina and solar installations became common sights among the ritzy neighborhoods that ring the beaches and Intracoastal Waterway along the N.C. coast. Favorable economic incentives also made solar attractive both to residential consumers and investors.

According to the website Choose Energy, which allows customers to compare rates and in some cases choose their energy provider, North Carolina ranked 6th in the country in solar generation, producing 1.4 gigawatts of power representing 3.4% of U.S. solar energy production as of early 2026. That was top for the Southeastern U.S.

The Solar Energies Industry Association estimated solar produces 10.1% of North Carolina’s electricity, enough power to supply 1.22 million homes.

But storm clouds for the industry have been gathering.

Utilities across the country, including Duke Energy, have adopted new rules limiting what residents can get paid by power companies for excess power their solar panels generate and that can be returned to the grid, a billing arrangement called net metering. The change in policy saw a significant drop in residential solar installations in North Carolina between 2023 and 2024.

The utilities say the changes are needed to level the playing field between rooftop solar customers and other customers, who they claim are stuck paying more to maintain the existing grid and power infrastructure. In short, the companies say customers without solar were subsidizing those who had installed the rooftop panels under the old rules that had been in place in some cases for decades. Solar supporters say it’s just another way for utilities to squeeze more profits out of customers while protecting their expensive, greenhouse-gas spewing power networks that in many cases are more expensive than comparable renewable energy systems.

POWER OUTAGE: Clean energy advocates appeal new NC rules that cut payments to rooftop solar owners

Political storm clouds

But perhaps the biggest change has been the view of renewables by those in power in recent years.

Trump is a known advocate for domestic oil and gas production, and his catchphrase “drill, baby, drill” was a popular refrain during his recent presidential campaign.

His administration also has gone on the offensive against renewable energy sources, especially offshore wind. A recent example is the federal government offering to “buy back” leases for offshore wind farms permitted by the Biden administration, including two proposed wind turbine farms off Brunswick County.

Solar also has found itself in the government’s crosshairs. Besides a wave of tariffs that have sent the costs of imported solar hardware surging, the Trump administration ended the 30% residential solar tax credit as part of 2025’s “One Big Beautiful Bill.”

In Raleigh, the Republican-controlled N.C. General Assembly also has been reviewing the state’s goal of creating a more “green” grid in the wake of surging electricity prices and questions over how to meet future power demands.

The legislature has already waived a goal that North Carolina reduce carbon emissions from its energy sector by 70% by 2030. The move, coupled with the loss of federal tax credits for solar, prompted the N.C. Utilities Commission to pause a review of Duke’s proposal to add lots of new solar power to the grid as part of its updated future energy plan for the Carolinas, instead recommending a future decision be one that reflects realistic costs, regulatory conditions and energy demand.

Other discussions in Raleigh include prohibiting Duke from closing a coal-fired power plant until the state has permitted a new nuclear plant, potentially freezing the goal of making the state carbon-neutral by 2050, and a proposed bill that would eliminate a long-standing state property tax break for new large-scale solar projects that fueled the solar industry’s rapid expansion.

OFF THE MARKET: Feds to buy back Duke Energy’s offshore wind lease off Brunswick County

Is solar still popular?

Combine all these headwinds and residential solar installation numbers in North Carolina have taken a hit.

According to figures compiled by the state sustainable energy association, the number of systems installed fell from 957 in March 2023 to a projected 155 in March 2026.

Gabe Amey, chief marketing officer with Cape Fear Energy Systems, has seen the industry challenges firsthand.

In response to changing market conditions, the Wilmington business that employs roughly 60 has expanded its offerings into battery storage, electric vehicle chargers, generators and home energy upgrades. The company even changed its name − from from solar systems to energy systems − in March 2026 to better reflect the services and products it offers.

Amey said every year to some degree is a reset for the solar business, which is still a maturing market in many areas. But for most consumers the economics of solar still makes sense, especially in a world where monthly energy bills are only headed in one direction even as solar equipment and installation costs largely stay flat despite inflationary pressures. Duke, for example, is proposing to raise a typical monthly residential electricity bill by 11% over the next two years, down from an original request for an 18% rate increase.

Many Cape Fear-area residents also like the idea of having a back-up power supply considering we are smack in hurricane alley and power outages aren’t uncommon.

Amey said no matter who is in the White House or governing in Raleigh, the challenges facing the sector for energy businesses and consumers are still largely the same.

“They just look a little different,” he said.

While companies need to be nimble and willing to adapt to different market conditions, Amey said that’s what every successful business needs to do, and tailoring the products and services to meet consumer demand is what the solar industry is doing − even as it ramped up installation of systems to beat the Dec. 31, 2025, sunset of the federal tax credit.

“Yes, the tax credit was important for a lot of people,” he said. “But a lot of people are looking beyond that as they become increasingly aware of what’s happening and will be happening with electricity costs in the coming years.”

Abele with the state sustainable energy association echoed the sentiment, although he noted the state solar industry has taken some hits − notably Asheville-based Blue Ridge Power.

While Abele and Amey both admit the upfront costs of funding a solar system that can easily cost more than $20,000 can be challenging for some residential customers, new financing tools like leasing and other models are making that price more palatable to more people.

“Ratepayers are feeling the pain right now, and they don’t see any end to that pain over the next few years,” Abele said, noting North Carolina monthly residential electricity bills have increased by more than 20% over the past five years. “Renewables like solar and battery storage make sense on a lot of levels to help consumers gain some control and long-term certainty over their energy costs.”

Reporter Gareth McGrath can be reached at GMcGrath@usatodayco.com or @GarethMcGrathSN on X/Twitter. This story was produced with financial support from Journalism Funding Partners. The USA TODAY Network maintains full editorial control of the work.