As solar energy begins a rapid expansion in Pennsylvania, few municipalities possess a clear framework for dealing with proposed projects.
Only 1 in 10 local zoning ordinances contain specific guidance on solar projects, and only 1 in 20 explicitly apply to utility-scale projects.
“It’s the exception that you can walk into a jurisdiction where the rules have already been laid out,” said Mohamed Badissy, an assistant law professor at Penn State Dickinson Law.
Solar companies offer the promise of rental payments for farmers and clean energy for the grid, but some people see large arrays as eyesores that take land away from farming.
Without solar-specific laws on the books, townships could be stuck hashing out these conflicting views one project at a time. And for rural municipalities operating on a shoestring budget, the pace of growth could quickly get overwhelming.
Over the next five years, the Solar Energy Industries Association expects Pennsylvania will increase the energy it generates from the sun by nearly 170%.
Ordinances Must Take Multiple Variables Into Account
Some municipalities have looked to model ordinances to create rules for solar, but these templates can quickly become outdated as the technology evolves.
And many other local governments have tailored their ordinances to residents’ concerns, meaning rules can vary widely from place to place.
“I will tell you right now. There is no gold standard,” Badissy said June 17 during the Penn State Solar Law Symposium.
One of the challenges local governments face is drawing a line between accessory (small-scale) and utility solar projects.
Accessory systems are often defined as primarily serving the energy needs of the land occupant. But it’s not always clear whether an installation on top of a massive warehouse meets this definition, and such rules may not account for seasonal variation in a building’s energy needs, Badissy said.
Limits on project scale can also cause unintended problems.
If a township requires solar projects to have a large minimum size — say 100 acres — the ordinance could shut out all but the largest landowners.
As it is, most solar projects developed in Pennsylvania to date have used multiple parcels managed under a pooled lease, Badissy said.
At the other end of the spectrum, utility-scale developers will also be turned off if the maximum project size is set too small.
Townships could adopt acreage restrictions in an attempt to thwart solar development, but it’s not clear if this strategy will work in the long term. Solar developers are starting to challenge such rules in court, Badissy said.
The lack of standardization even extends to the rules for privacy buffers around solar fields. Some townships are highly prescriptive, requiring conifers of a certain height be planted at a set density. Other ordinances simply say that the screening plan should be appropriate for the site, Badissy said.
Almost all ordinances include rules for decommissioning solar fields, backed up by some financial security.
The problem is that so far few solar arrays have reached the end of their useful life and been torn down, leaving the cost of recycling the equipment rather murky.
Some local governments are handling this uncertainty by having a third party, such as an engineering firm, update the dollar amount for the project’s bonding every five years, Badissy said.
Tough for Everyone Involved
The undercooked regulatory environment isn’t just a problem for municipalities. It’s a headache for solar developers as well.
In some sense, Badissy said, permitting is actually a greater hurdle for solar projects than for oil and gas extraction.
Profit margins are smaller in solar than in the petroleum industry, and electricity producers can’t store their product very long to wait for a favorable price.
As a result, solar developers have much lower risk tolerance than oil and gas companies do.
“If it takes an extra month, six months, God forbid a year in the project development, that could kill the economics of the project,” Badissy said.
That sensitivity to regulatory costs is likely to grow.
As the cost of solar hardware falls — by about 18% a year — it makes up a shrinking share of a project’s cost, Badissy said. As a result, the other costs, including regulatory compliance, become a larger percentage of the total.
Badissy said he’s heard from many people connected to the solar industry that developers are spending less time poring over the latest panel designs and more time identifying localities that offer the best opportunities for solar.
If local governments can create straightforward permitting requirements, Badissy said, they could attract solar investment and lower the area’s energy costs.
“It’s nice to write an ordinance that lasts, that’s relevant for more than just a few years,” he said, “but I recognize sometimes it’s enough just to get to the questions that are in front of you right now.”