South Carolina’s success in attracting international business to the state has made clean energy one of the most important topics in the critical world of economic development, the state’s top business official said Wednesday.
The state has led the nation in foreign direct investment the past two years and is on track to repeat that feat this year, state Commerce Secretary Bobby Hitt during a clean energy conference Wednesday.
International companies come here with a slightly different attitude about clean energy and environmental issues than some American companies, he said: “Much more intense.”
But many American companies also are on board.
Two weeks ago, state leaders announced that LPL Financial will consolidate three Charlotte offices into a new facility in Fort Mill, where it plans a $150 million investment and will upgrade from its current 1,000-person work force to 3,000.
“One of their demands was they wanted to have a (net) zero energy (consumption) building,” Hitt said, similar to one the company operates in San Diego. “This is what new development is bringing to South Carolina. They want and expect us to support them in their goals of energy efficiency and clean energy, which goes beyond renewables.”
Energy inefficient office and institutional buildings – much more than people or houses – probably are the greatest energy abusers in the United States today, Hitt told business leaders gathered in Columbia for the 2014 South Carolina Clean Energy Summit.
The cost of energy is a main driver in economic development in South Carolina, Hitt and other business officials said, and is at the forefront of discussions when the state is recruiting clients.About half the companies South Carolina currently is in discussions with about recruitment are international, Hitt said.
Manufacturing continues to be the bread-and-butter job and revenue sector for the state where readily available, affordable energy is a key, Hitt said, though data centers, call centers, agri-business, financial companies, banks, life sciences and even beer production also are important and all require both energy and flexibility.
“That is the key to success in today’s economic world – be ready, having the table set, being flexible and being able to meet your customer’s demands,” Hitt said. “Those demands include clean energy and renewable energy.”
Over the past 20 years, South Carolina has evolved from an agricultural-based economy to an automotive and aerospace-based economy and has become the No. 1 tire manufacturer in the world, Hitt said. But another important economic change in the state over the past three years, he said, has been the steady influx of new businesses. While the typical economic development mix in the state has been about 70 percent expansions and 30 percent new business, the mix has evened out to about 50 percent each, Hitt said.
“That’s new money. That’s wealth creation. That changes our economy,” Hitt said. “New money means jobs, new ideas, new people coming in.”
New legislation affecting alternative energy, solar in particular, also has come to past in the state over the last year.
South Carolina’s new solar energy law is projected to expand the use of sun power across the state, which supporters say will increase jobs and help the economy.
The law, produced after two years of debate in the Legislature, says the state's private utilities must invest in or buy a certain percentage of solar power by 2021. The rules say participating utilities must get 2 percent of their average five-year peak power demand from the sun.
The new law also will eventually allow solar leasing, a method of financing sun panels so that homeowners can more easily afford the high upfront costs.
But the law won't permit solar leasing until the Public Service Commission examines how expanding solar will affect power companies, which have been nervous about competition from renewable energy companies. The PSC must look at whether to raise or lower the amount utilities pay customers who produce excess solar power at their homes. That is expected to produce a lively debate between utilities and pro-solar interests at the PSC later this year.
Now is a good time for residential and small commercial entities to take advantage of solar energy incentives, industry experts said, while larger institutional entities should take off with solar next year as a result of the recent new legislation.
Residential solar systems installed in the Charleston and Columbia areas pay for themselves in about eight years, said solar installer Bruce Wood, while commercial systems pay out in four to five years, yielding about a 25 percent return on commercial systems and about a 12 percent return for residential customers, he said.
Boosters of the law said earlier Wednesday that it resulted from a compromise that will move South Carolina into the forefront among southern states in embracing solar power, a non-polluting source of energy. The state has historically been one of the least friendly toward sun power in the country.
“What really connected with me was that South Carolina is really becoming a leader in attracting foreign companies, and foreign companies are expecting and demanding and requiring clean energy for their operations,” said James Poch, South Carolina Clean Energy Business Alliance executive director.
“So, to me it seems like a great opportunity (for the state) and everything is coming together right at the right time.”