Renewables Law Blog
News, Articles and Legal and Regulatory Information on Renewables from the Law Firm Babst Calland
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Our Renewables Law Blog provides timely legal and business information on issues impacting companies developing or investing in renewable energy generation.
On September 8, 2021, the Department of Energy (DOE) released its Solar Futures Study providing a blueprint for the role of solar energy in decarbonizing the nation’s power sector. The 310-page Study outlines a future in which solar provides 40% of the nation’s electricity supply by 2035 through cost reductions, technological improvement, rapid deployment, and supportive policies. And, with the electrification of buildings and the transportation sector, solar could also power 30% of all building end uses and 14% of transportation end uses by 2050.
The Study identifies several policy initiatives needed to support the deployment of solar at this scale, including decarbonization targets, R&D investments and cost reductions, changes to wholesale electricity market regulation, and transmission development, to name a few. In order to meet the 40% by 2035 goal, the Study estimates that the U.S. must install an average of 30 GW of solar capacity per year between now and 2025 and 60 GW per year from 2025-2030, with a total of 1,000 GW of solar deployed by 2035. If the solar industry sees this level of growth, the Study estimates that the industry could employ up to 1.5 million people by 2035. The Study also highlights the important role that battery storage and demand-side management will play given that solar power varies based on daily and seasonal patterns.
With solar power currently providing approximately 3% of the nation’s electricity supply, the DOE’s 40% goal will be contingent on many factors supporting the industry in the coming years, including cost reductions, supportive policies, and widespread deployment.
Tagged: DOE, Department of Energy, renewable, renewable energy, solar, solar energy
On July 12, 2021, Ohio Governor Mike DeWine signed into law Senate Bill 52 providing counties with the authority to block the construction of certain large solar and wind facilities in unincorporated townships. The law goes into effect on October 11, 2021. In short, Senate Bill 52 allows county commissioners to establish restricted areas in unincorporated townships prohibiting the construction of solar developments with generating capacity over 50 MWs and wind farms with over 5 MWs of generating capacity. If a township is incorporated, it retains jurisdiction to regulate whether the development occurs rather than defer to the county commissioners. Senate Bill 52 also contains requirements pertaining to public meetings in the counties that the facility will be located and decommissioning requirements. Practically speaking, Senate Bill 52 means that even if a solar or wind company obtains the necessary land rights to construct a solar or wind facility, counties can block its construction.
Senate Bill 52 follows a string of legislative actions in Ohio that appear to have stifled development and investment in solar and wind in the state. For example, in 2014, Ohio passed legislation requiring wind farms to be setback a minimum of 1,125 feet from the nearest adjacent property line. In contrast, oil and gas production wells are only required to be located at least 100 feet from the nearest homes. Since Ohio enacted the wind farm setback requirement, only one wind farm has been approved in the state.
While the full impact of Senate Bill 52 is unknown at this time, solar and wind developers can expect some counties to begin using their authority to restrict the location of solar and wind developments after the law goes into effect in October.
Tagged: Ohio, Senate Bill 52, construction, land rights, solar, solar facilities, wind, wind facilities
On June 4, 2021, following 21 nights of public hearings held over the course of 15 months, a conditional use application for a proposed 75 megawatt solar energy system filed by Brookview Solar I, LLC, was denied by operation of law due to a two-two tie vote, with one abstention, by the Board of Supervisors of Mount Joy Township, Adams County. The applicant faced many of the same challenges and opposition frequently levied against traditional energy sources.
In November 2019, the applicant submitted its application for a solar energy field, proposed to be sited across eleven properties totaling approximately 374 acres of land located largely within the Township’s Baltimore Pike Corridor District (“BPC”) and partially within its Agricultural District (“AC”). Solar energy systems are a permitted use in the AC district and permitted as a conditional use within the BPC district under the Township Zoning Ordinance, subject to extensive use-specific regulations. The Board began holding public hearings on the application in January 2020 and concluded in March of 2021. On June 4, 2021, a motion to approve the application with conditions resulted in a 2-2-1 vote, as did a motion to deny the application. Under Pennsylvania case law, where a judicial or quasi-judicial body is equally divided, the subject matter with which it is dealing must remain in status quo, in this case resulting in a denial of the application. Due to the 2-2-1 vote, the Township did not prepare official written findings, but submitted two draft decisions in support of the Board’s motions to deny and approve the application, as well as an official decision simply noting the denial as an operation of law. The applicant appealed to the Adams County Court of Common Pleas on June 28, 2021.
The appeal alleges the Board committed an error of law and/or abused its discretion by failing to approve the application. Due to the lack of an official decision, the appeal relies largely upon the limited differences between the draft denial and draft approval decisions. The appeal notes that although the two decisions overlapped on 68 findings of fact and 7 conclusions of law, the draft denial was largely based on a finding that the applicant failed to meet certain specific criteria under the Zoning Ordinance, namely that it had failed to provide a glare study, to submit stormwater plans, or to provide proper performance security related to decommissioning. The appeal alleges the record before the Board, as well as the draft approval decision, demonstrated that a complete glare study had been provided, that the applicant was not required to provide stormwater plans, and that the security met the relevant ordinance criteria. The applicant further argues that because these bases for denial all relate to alleged deficiencies in the application, they could not be considered where the Township had accepted the application as complete.
The appeal further argues the Board erred in denying the application where the draft denial decision was also based on an alleged failure to meet several general, subjective criteria of the Ordinance. After a conditional use applicant presents credible substantial evidence that the proposed use satisfies the ordinance’s specific criteria, the burden shifts to any objectors to prove the application failed to meet the general, subjective criteria in the ordinance. The appeal alleges that because the draft denial decision failed to garner a simple majority, the objectors failed to meet this standard. In addition, it argues the record indicated the evidence presented by the objectors was merely anecdotal conjecture and speculation which was insufficient to meet their high burden of proof.
Although the Brookview Solar project involves newer technology, the legal issues are largely the same as those typically addressed in traditional Pennsylvania land use cases. Furthermore, the Court’s decision on whether to review the matter de novo or to adopt the findings of fact and conclusions of law of either draft decision will have implications for the review of land use decisions generally, not just in the renewable energy field.
Tagged: conditional use application, land use, solar energy field, zoning
A financial rebound is in progress as COVID-19 becomes less of a driver to business and our general livelihood, and it is one that is apparent in the renewables sector. Experts see growth fueled not just by pent-up demand, but also growing attention to ESG considerations and renewables' financial advantages.
Corporate merger and acquisition activity was up significantly with solar developers expanding their pipelines, oil and gas companies diversifying into renewables, and funds buying up renewable assets.
According to Mercom CEO Raj Prabhu, Solar project acquisitions reached a record high in the second quarter, he said, with more than 24.7 GW of capacity acquired. That total came from 34 corporate M&A deals, compared to 20 in the first quarter of this year and 13 in the second quarter of 2020.
In the first half of 2021, solar project acquisitions reached 39.3 GW, more than doubling the 14.7 GW acquired in the first half of 2020.
Venture capital funding in particular has experienced a strong recovery. Funding for VC was 680% higher in the first half of the year, compared with last year, with $1.6 billion raised in 26 deals, according to Mercom.
Renewables have been rapidly gaining market share for years. In 2020, the United States saw its fifth consecutive year of renewables consumption growth, reaching a record high of 12% of the country's total consumption, according to the U.S. Energy Information Administration (EIA).
EIA estimates solar energy accounted for about 11% of last year's renewable energy consumption, and "overall, 2020 U.S. solar consumption increased 22% from 2019."
By comparison, the agency said fossil fuel consumption fell last year by 9% to "the lowest level in nearly 30 years."
The trend is represented globally as well. The International Energy Agency's (IEA) most recent market update, released in May, found renewable electricity capacity added in 2020 rose by 45% to 280 GW.
"Solar PV installations will continue to break new records, with annual additions forecast to reach over 160 GW by 2022," IEA said in its analysis. "That would be almost 50% higher than the level achieved in 2019 prior to the pandemic, affirming solar's position as the 'new king' of global electricity markets."
Tagged: Social and Governance (ESG), market share, renewable, renewable energy, solar, solar energy, venture capital funding
It's no secret that coal plants have had trouble competing with cheaper renewables and natural gas in recent years. Unexpectedly low prices from PJM's latest capacity auction spurred a fresh wave of retirement announcements this month. But Talen Energy has decided that rather than retire coal plants and walk away, it would convert those sites to be used for other renewable energy-related projects. While Talen promised in November 2020 to shut down roughly 5 gigawatts of coal capacity in the 2020s, the company wanted more of a comprehensive strategy for this transition. “This is the first of hopefully many unit transitions from coal to lower-carbon sources and battery,” said Cole Muller, who oversees Talen's fossil-powered fleet in the territory of regional transmission organization PJM. “It’s really about decarbonizing, ...investing in the communities and continuing to provide opportunities for our people.” After that project, Talen plans to build a 1-gigawatt battery fleet in the next three to five years on its existing properties, using individual batteries as large as 300 megawatts. “If you just retire it, you have a significant loss to both jobs and the tax base, and the communities at large,” Muller said. Talen tapped battery developer Key Capture Energy to build a 20-megawatt system as a demonstration of the concept. That smaller size allows for a streamlined approval process, Muller noted. But the battery will act just like any other commercial power plant, bidding into PJM's markets for capacity, ancillary services and energy arbitrage. Assuming that goes well, Talen can add up to another 115 megawatts of battery storage to fully utilize the coal plant's grid connection capacity. That's a distinct advantage for developing batteries at an older power plant. The site has been cleared to export a certain amount of power to the grid, so there's less risk of having to pay for hefty network upgrades as developers must do at greenfield sites. The coal-to-battery switching remains too nascent to be labeled a trend. But we hopefully will see more of these transitions in the future making the switch from coal to renewable energy a win for everyone.
Tagged: battery storage, coal, decarbonizing
Developers of renewables projects are once again facing regulatory uncertainty regarding the scope of the Migratory Bird Treaty Act (“MBTA”) as a result of a proposed rule issued on May 7 by the U.S. Fish and Wildlife Service (“USFWS”). The proposed rule, if finalized as issued, would revoke a rule issued in the last days of the Trump administration stipulating that deaths of migratory birds occurring incidental to lawful activities (i.e., incidental take) are not prohibited under the MBTA.
The proposed rule represents the latest development in a long-running debate. At issue is whether the MBTA, a law passed in 1918 that was originally intended to prevent the extinction of migratory bird species due to commercial trade and hunting practices, prohibits the incidental taking of protected birds as a result of activities that are otherwise lawful, such as the operation of wind turbines or the clearing of land for a solar project, or whether the law prohibits only the intentional take (i.e., purposeful killing) of protected species. The issue has resulted in a split among U.S. Circuit Courts of Appeals, as well as completely opposite legal interpretations issued by two Solicitors of the Department of Interior within the span of one year in 2017.
By revoking the prior rule, the USFWS would revert to interpreting the MBTA to prohibit incidental take of birds protected under the act, and to employing agency discretion in determining whether an incidental take of such birds warrants an enforcement action. The proposed rule highlights the need for renewable project developers to implement best practices for avoiding the unintended take of protected migratory birds as a means of qualifying for agency enforcement discretion and thus avoiding fines for noncompliance. For wind energy projects, this can largely be accomplished through complying with the USFWS’s Land-Based Wind Energy Guidelines, although there is no guarantee that such compliance will preclude an enforcement action. There are no solar-specific guidelines currently in place. While the risk posed to migratory birds from solar projects is less than that for wind projects, solar developers should nonetheless implement best practices for reducing impacts to birds, including the general Nationwide Standard Conservation Measures for project development.
Tagged: Migratory Bird Treaty Act, migratory birds, renewable energy projects, solar, wind
With the development of large-scale renewable energy projects, municipal land use officials and private developers face the dilemma of how to classify and address such uses when zoning ordinances do not expressly mention them. Such omissions may be intentional, or, more often, may simply be the result of failures to update their ordinances to account for the changing energy production market.
A recent example of how these issues play out was a decision by the Lower Mount Bethel Township, Northampton County Zoning Hearing Board. There, Glidepath Ventures, LLC d/b/a Prospect 14, desired to construct a 61,000 solar panel facility to generate electricity for public consumption within the Township. The developer had targeted a 130-acre property located largely within the Township’s Agricultural District, and partially within its Conservation District. The Township zoning ordinance does not permit solar panel facilities in any district but does permit “any other use not otherwise listed in any zoning district” as a conditional use within the Township’s Industrial District. Although the developer argued that there was no suitable undeveloped property within the Industrial District, the Township’s expert testified that there was a suitable site within that zone, although the undeveloped space was limited.
At bifurcated hearings spanning several months, the Developer initially sought a use variance to allow the solar facility in the Agricultural and Conservation Districts or, in the alternative, challenged the validity of the Zoning Ordinance, alleging that it was legally defective by excluding the proposed use. After finding that the developer had failed to establish the requisite unnecessary hardship for the grant of a use variance, the Board considered whether the use was either de jure or de facto exclusionary by either expressly or in practice prohibiting the legitimate solar facility use. Ultimately, the Board held the ordinance was not exclusionary because it did not expressly prohibit solar facilities, and the proposed use could be permitted as a conditional use in the Industrial District because it was not otherwise listed in any zoning district.
The Board issued its written decision on April 28. As of this date, no appeal has been filed.
The decision in Glidepath Ventures highlights the need for municipalities and developers alike to consider how they classify and define renewable energy uses. By failing to provide for a legitimate use, the Township was placed in a precarious situation, and if it had not included a provision permitting all other uses within the Industrial District, the ordinance may have been found to be de facto exclusionary and therefore invalid. In addition, the decision is indicative of the disconnect between the type of use and land considered by developers to be functional for larger renewable energy products, and what zones municipalities believe to be suitable from a zoning context. How municipalities classify and define renewable energy uses will likely continue to evolve as renewable energy development increases and cases such as Glidepath Ventures become more prevalent.
Tagged: renewable energy projects, use variance, zoning ordinances
Bank of America last week more than tripled its environmental financing goal, saying it wants to deploy more than $1 trillion by 2030 to accelerate the transition toward a low-carbon, sustainable future, according to a recent press release.
Since launching its environmental business initiative in 2007, the bank said, it has financed $200 billion in sustainable activities, including asset-based lending, tax equity investments and capital raising in the energy and transportation sectors, among others. It pledged to back $300 billion in low-carbon activities between 2019 and 2030.
The $1 trillion pledge is in addition to $500 billion the bank aims to put toward socially inclusive development, including affordable housing, community development, healthcare, education, and racial and gender equality. Karen Fang, Bank of America’s head of global sustainable finance, said the commitment "demonstrates our belief that there is opportunity for exponential market growth in [environmental, social and governance]-themed products and services as well as market share growth." Bank of America has helped more than 225 clients support their sustainable business needs by raising upward of $300 billion through more than 400 ESG-themed bond offerings. BofA’s commitment is consistent with the United Nations Sustainable Development Goals, to spur transformative change nationally and around the world. Beyond the $1 trillion climate-related finance, the balance of the sustainable finance goal is focused on social inclusive development, scaling capital to advance community development, affordable housing, healthcare, and education, in addition to racial and gender equality.
Banks have markedly ramped up their sustainability goals over the past two years. Between September and March, each of the six largest U.S.-based banks has pledged to achieve net-zero greenhouse-gas emissions in financing activities by 2050.
Tagged: Bank of America, ESG, low-carbon, sustainable
In an effort to ensure that owners of solar and wind energy facilities (“renewable energy facilities”) do not decommission production facilities without completing proper reclamation, on April 10, 2021, the West Virginia Legislature enacted Senate Bill 492, creating the West Virginia Wind and Solar Energy Facility Reclamation Act (as new Article 32 of Chapter 22 of the West Virginia Code (“Reclamation Act”)). The Reclamation Act (effective July 9, 2021) generally requires that an owner of a wind generation facility or a solar generation facility submit certain information to the West Virginia Department of Environmental Protection (“DEP”), including the date the facility commenced operation; a proposed decommissioning plan (prepared by a “qualified independent licensed professional engineer”); and a cost estimate for execution of that plan. The DEP will use that and other relevant information in preparing (or approving) a decommissioning plan for the site and in determining an appropriate reclamation bond amount for the facility.
Tagged: DEP, Department of Energy, Renewable Energy Site Reclamation Law, Senate Bill 492
The West Virginia Legislature has passed a bill that will make it easier for retail electric customers to establish on-site solar energy facilities. Sponsored by Babst Calland Shareholder and House Judiciary Chairman Moore Capito, House Bill 3310 states that solar energy facilities designed to power only the premises where they are located are exempt from the jurisdiction of the West Virginia Public Service Commission under certain conditions. This means that the PSC is not involved in regulating the rates and other aspects of qualifying solar facilities. To be exempt, power generated from such a facility must be subject to a “power purchase agreement” with the retail electric customer. A PPA generally governs the design, permitting, financing, and installation of a solar facility at a retail electric customer’s location by a solar energy developer. Under a PPA, a retail customer purchases the power generated by the facility at an agreed upon rate. In addition to receiving revenue generated from the energy produced, the developer is also eligible for renewable energy tax credits. The bill is intended to promote solar installations at residences, small businesses, and industrial sites by allowing third-party developers to design and finance the installation of solar panels and then sell the electricity generated to the consumer.
To be exempt from PSC jurisdiction, an on-site solar facility must be “located on and designed to meet only the electrical needs of the premises of a retail electric customer” and be designed not to exceed certain generation limits: 25 kilowatts for residential customers; 500 kilowatts for commercial customers; and 2,000 kilowatts for industrial customers. The legislation also establishes a cap on the aggregate amount of exempt on-site solar energy generation within West Virginia. The total of all solar PPAs and net metering arrangements cannot exceed 3% of an electric utility’s aggregate customer peak demand in the state during the previous year. Under a net metering arrangement, a retail customer who generates more power through an on-site solar facility than the customer uses will receive a credit for the excess power that is sent out to the grid rather than consumed.
Before entering into a PPA for an on-site solar facility, a retail customer must notify the electric utility. If the electric utility does not notify the customer within 30 days that a cap has already been reached, the customer may proceed with the project.
If you have any questions about House Bill 3310 or solar development in West Virginia, please contact Robert M. Stonestreet (681.265.2117; firstname.lastname@example.org) or Moore Capito (681.205.8953; email@example.com)
Tagged: House Bill 3310, West Virginia Public Service Commission, retail electric, solar energy