Ohio Enacts Legislation Providing Counties with the Authority to Block Solar and Wind Developments

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.

Biden Administration Proposes to Revoke Trump Era Rule Limiting Incidental Take Prohibition Under The MBTA

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.

Solar Investment and Wind Production Tax Credits Extended

The recently approved federal spending bill for 2021 appropriations (December 27, 2020) included extensions to the federal solar investment tax credit (ITC) and wind production tax credit (PTC).  The ITC and PTC provide significant financial incentives to the growing renewable energy industry. The ITC is a tax credit that can be claimed on federal corporate income taxes for a percent of the cost of a solar photovoltaic (PV) system that is placed in service.  The ITC, which was scheduled to step down from 26% to 22% in 2021, has been extended at its current 26% rate for an additional two years through 2023.  The PTC is a per-kilowatt-hour (kWh) tax credit for electricity generated using qualified energy resources including wind, and was scheduled to phase down from 60% of the original credit to 40% in 2021.  The new spending bill included an extension of the 60% rate for an additional year through 2021. Projects must be commenced prior to the expiration of the new extension deadlines in order to qualify for the current tax credit rate. Please click here for more information.