Duke plugs into Davidson solar farm

LEXINGTON — SunEdison LLC of Maryland has committed to building the largest photovoltaic solar farm in the country in Davidson County.

Yesterday, Duke Energy Carolinas, a unit of Duke Energy Corp., announced that it will buy the entire electricity output of the proposed 21.5-megawatt solar-energy farm.

SunEdison, the largest solar-energy company in North America, is considering three sites in Davidson County for the farm. It has not announced the specific sites. One is near a proposed 2,400-acre megasite off Interstate 85 near Lexington. County officials have not identified the other two sites.

Larry Potts, the chairman of the Davidson County Board of Commissioners, said that the solar farm will help the county recruit other industry.

"I think SunEdison is one of the major building blocks to bring it all together," Potts said. Davidson County commissioners approved about $2 million in incentives earlier this month for the solar farm.

The county would pay $1.8 million for grading and provide cash grants of $125,000 in 2009, $75,000 in 2010 and $50,000 in 2011. The company would invest $173 million in the solar farm and provide up to 80 construction jobs and three full-time jobs.
State legislators and energy experts point to a state energy law passed last year as critical in attracting SunEdison to North Carolina.

The energy law, intended to promote renewable energy, requires power companies to obtain a set percentage of their energy from solar power and other renewable sources. Duke Energy Corp. and Progress Energy Inc. have been looking for renewable-energy companies that can provide the energy needed to meet the law's mandates.

Duke Energy sent out a request for proposals in April 2007, and SunEdison was one of the bidders, Duke Energy officials said yesterday during a conference call with reporters.

The company had been negotiating with SunEdison since October, officials said.

Under the 20-year agreement, Duke Energy will get more than 16 megawatts of power from the solar farm beginning no later than Dec. 31, 2010. That's enough power for 2,647 homes for one year. (Some of the energy produced by the solar farm would be lost during the transfer process.)

SunEdison will buy and install the solar equipment at no cost to Duke Energy.

Financial details of the agreement were not disclosed.

Construction of the solar farm would begin in 2009, Keith Trent, the group executive and chief strategy, policy and regulatory officer for Duke Energy, said during the conference call.

The farm, which would cover between 100 and 300 acres, would be completely operational by 2011, he said.

"This is really the first significant addition of solar power to our fleet," Trent said.

More and more power companies are looking to solar energy and other types of renewable energy, said Monique Hanis, a spokeswoman for the Solar Energy Industries Association.

Other states have made similar renewable-energy requirements, she said.

Having an agreement such as the one Duke Energy has with SunEdison is a way to help power companies manage their energy costs, Hanis said.

That will become increasingly important as power companies prepare for pending federal regulations that deal with climate control, she said.

"It's a way to hedge that legislation and costs," Hanis said. Installations of photovoltaic systems jumped by nearly 50 percent last year, according to the association. The association attributes the increase to state and local tax incentives that have appeared in the past few years.

At the federal level, the 2005 energy bill included tax credits of 30 percent for solar installations.
Growth has come not only in the form of solar farms, but also from such retail chains as Wal-Mart Stores Inc. installing roof panels to power individual stores.

A U.S. House committee voted yesterday to extend the tax credit, which is set to expire this year.

■ Michael Hewlett can be reached at 727-7326 or at mhewlett@wsjournal.com.

■ Sean Mussenden in the Media General Washington bureau contributed to this article.