Let the sun shine: industry insiders fear it will set on the subsidy that makes solar such a bright spot in a dreary economy.

• Author: Campbell, Spencer
• Position: COVER STORY

A chance for a catnap--a 45-minute flight across the state in a private jet--has turned into a discussion of power, and the more Bill Taylor talks, the more frustrated he becomes. "We went down to Raleigh recently and met with this guy, this leader, and tell him some things. He says, 'Wow, great, I had no idea.' Fifteen minutes later, there's a vote on the floor. I forget what, something affecting our industry. And he stands up and repeats exactly what we told him." A passenger sitting across from him suggests that's a good thing. "No! That's disgusting. It's all about lobbying. If you don't have somebody up there, whispering in their ear, they have no idea you exist. We need people up there, but solar doesn't have the money of oil or gas or these other groups yet." The co-founder of Huntersville-based Daetwyler Clean Energy LLC takes a breath. "They want that tax revenue."

Taylor has reason to be nervous. In 2007, the state started requiring electric utilities to include renewable sources, such as solar and wind, in their power mixes. It was the first law of its kind in the Southeast and intended to spur development of green power. It worked, especially for solar, which experienced a decrease in panel prices about the same time, making it the cheapest option. But the Renewable Energy and Energy Efficiency Portfolio Standard was only the spark. The General Assembly also expanded and extended a tax credit for investment in renewables that, when combined with other credits, meant the cost of solar farms could be written off. Suddenly, the industry had captive customers and a government willing to underwrite infrastructure. North Carolina was one of the few states that offered such lucrative policies, and development went supernova, increasing more than 3,000% between 2007 and 2012, when the state ranked fifth in the U.S. in amount of solar built.

But while the industry got fat, the state grew hungry for new revenue. A month before Taylor boarded the plane in late November, Mike Hager, a Rutherfordton Republican who chairs the House Public Utilities and Energy Committee, told a South Carolina newspaper, "I think this has set the wrong precedent. You take taxpayer dollars and prop up an industry that can't survive on its own. Why do we do this?" Republicans, who won the governor's race and tightened their grip on the General Assembly, are clamoring for tax reform. A few months later, a senator who has championed renewables will propose killing its subsidy. Says Steve Kalland, executive director of the nonprofit North Carolina Solar Center at N.C. State University, "Tax reform done without a mind about this could completely, unintentionally, decapitate the industry."

The Beech craft touches down in Beaufort County at Warren Field Airport, two runways inside a chain-link fence in Washington, where Bradley Fite waits. The director of field operations for SunEnergy1 LLC gathers up Taylor in his boss' Mercedes before heading east on U.S. 264. Fite's home is near SunEnergy1's headquarters in Mooresville, but he's living temporarily in Washington to supervise installation of a solar farm in Bath. The company rented 14 houses nearby to quarter their...