MEbiz Real Estate Insider – A Field of Dreams: Imagining a Solar System in The Back Forty
In April 2014, the ME legislature passed The ME Solar Energy Act, finding that solar energy development in ME would help protect and improve the well-being of its residents, as well as provide greenhouse gas reductions and economic benefits. According to the Interstate Renewable Energy Council of the U.S. Department of Energy’s National Renewable Energy Laboratory, ME lags behind Vermont, Massachusetts and Connecticut, and even New York, New Jersey, Pennsylvania and Maryland, in solar installations. In 2013, these states, on average, generated at least 10 solar watts per person from rooftop installations each day.
The ME Solar Energy Act encourages the appropriate siting of solar energy systems through the permitting, financing and construction of solar installations and the implementation of reasonable utility rate structures. Solar energy is rapidly penetrating the generation market in states where tax breaks and government incentives merge with fair and balanced utility payments to landowners who produce energy from the sun. The ME Solar Energy Act requires the Public Utilities Commission to analyze and quantify the value of solar energy generation, and that inquiry is underway (MPUC Docket No. 2014-00171).
Yet even with the endorsement of the ME legislature and the hard work of the Commission, ME solar advocates face challenges. The typically conceived business model for the solar industry provides that homeowners sign lease agreements with solar installation companies, pay the cost of the solar energy-producing panels over time and, sometimes relying on “feed-in tariffs,” sell any excess power back to the utility in whole or part, which is often known as “net metering.”
However, what about a passive 20 megawatt solar energy system large enough to rest on the back forty?
First, there is a lack in guidance from municipalities in the accepted standards to properly site any solar system, let alone those that are conceived in a field of dreams. ME municipalities are likely to struggle with how to manage requests for large, utility-scale installations that may have aesthetic, economic and environmental impacts. Generally, municipalities in ME do not have site design specifications or local ordinances that are particular to large-scale solar systems, or that would permit a non-discriminatory, uniform analysis of location, size and design for each building application. In the absence of local laws geared toward understanding solar energy, an applicant may face a time-consuming, unpredictable use variance process and the possibility of impairing important relations. Where time is money, a misplaced siting effort can spell disaster for your project or those that may follow. Local zoning issues such as use restrictions, violating setbacks, creating obstructions, or violating historic or flood plain restrictions, among others, should be carefully analyzed in light of the solar use. In-person meetings should be held to discuss the codes and ordinances that may be implicated by a large-scale build-out.
Second, large-scale solar installations generally require exclusive use of the land, so leases and easements related to such activities are very restrictive and must be carefully drafted and reviewed. While the land used for large-scale solar is quieter and more passive than virtually all other forms of energy production, it is also generally incompatible with concurrent farming, grazing or other agricultural activities. Therefore, the limitations on the community’s or landowners’ other expected forms of land use, such as hunting, snowmobiling and recreation, must be carefully considered.
Third, while more common in the western United States, federal and state environmental policy issues, such as those under the National Environmental Policy Act, 42 U.S.C. 4321 et seq., will be implicated by utility-scale solar to ensure the integrity of flora and fauna.
Finally, the electricity generated by large scale solar may be transmitted in a variety of ways. It may be connected to an electric micro-grid for use on site, or it may be connected to the interstate electric transmission grid, requiring it to be placed in a queue for interconnection by the New England Independent System Operator, approval by the transmission owner, and sold under the terms of a power purchase agreement to the utility, an electricity marketer or a third party.
In addition to the energy sold, owners of solar generating projects may sell solar renewable energy credits to many utilities. SRECs are the recognition of the inherent environmental attributes of renewable energy that represent a separate economic value for each megawatthour of electricity produced.
There’s money where the sun shines. In ME we are fortunate to not have to be the first to slide down the razor’s edge – we have in-region examples (e.g. Commonwealth of Massachusetts) from which we can identify sound, impactful public policy to adopt, but also look to avoid costly consequences of short-sighted or unrealistic political or regulatory burdens.
Whether your field of dreams is a solar system in the front forty or the back forty, thoughtful consideration of all the issues is necessary to embrace and win in ME’s new energy future.
For more information, contact Trish French, energy attorney.