More than 120 bills related to renewable energy development from 28 states, Washington, D.C. and Puerto Rico were enacted in 2021. Legislation promoting the development of renewable energy resources, like offshore wind and utility-scale solar, continue to be popular among state legislatures. Other legislative trends impacting the renewable energy sector include community solar, taxation, and the decommissioning of renewable energy facilities.
This year was a big year for offshore wind proponents. The Biden administration has been supportive of pursuing offshore wind development with the goal of building 30 gigawatts (GW) of offshore wind in the United States by 2030. The administration has followed that up by promoting investments, tax incentives, loans, and other financing options to offshore wind developers to build projects and necessary infrastructure.
The nation’s first offshore wind project, Vineyard Wind, broke ground in November 2021 off the coast of Cape Cod. Another project, South Fork Wind, off the coast of Rhode Island also received federal approval in November. Additional plans for offshore wind development are underway in a handful of northeastern states, such as New Jersey and the New York Bight.
Some of those projects have legislative roots dating back to the 2010s, and states continue to pass legislation that promotes offshore wind development. New Jersey’s SB 3926 authorized offshore wind developers to obtain property or property interests within the state for constructing transmission lines and other infrastructure related to the offshore wind project. SB 3926 also gave the state PUC superseding authority over local governments with regards to the siting of offshore wind project infrastructure. New Jersey’s AB 4 also included major tax credits to wind energy developers, including offshore wind, as part of the state’s economic recovery package.
Maine enacted SB 142 to encourage research and development in the offshore wind industry. However, opposition from the commercial lobster and recreational fishing industries in Maine prompted the legislature to subsequently pass SB 512 which establishes a moratorium on offshore wind projects in Maine’s territorial waters.
While most new offshore wind development is focused along the Atlantic coast, states on the Pacific coast have also shown interest. However, offshore wind development on the Pacific coast would require floating offshore wind turbines due to the near-coast deep waters of the Pacific compared to the shallower waters of the Atlantic which allow for sea-floor mounted wind turbines.
Plans for two west coast wind farms were announced in May 2021 when the federal government and California identified a 399 square mile area off California’s central and north coast for offshore wind development. The developments would provide an estimated 4.6 GW of power. California also enacted AB 525 which would research and evaluate the feasibility for offshore wind in state. Oregon enacted a similar bill, HB 3375, which establishes a goal of developing 3 GW of floating offshore wind off the Oregon coast by 2030.
Onshore wind development also experienced a big year as states look to meet energy generation and carbon reduction goals. Land-based wind development followed up a record year in 2020 by connecting more than 6 GW of wind power to the grid in the first half of 2021. The U.S. has 126 GW of wind power connected to the grid, with an additional 62 GW under development through 2025.
States enacted legislation that promotes, regulates, or addresses certain issues regarding onshore wind development. For example, some states passed legislation that promotes the domestic manufacturing of wind energy equipment while others established decommissioning requirements for outdated turbines.
With the enactment of SB 63, Montana clarified that the State Land Board has authority to lease state lands for the purpose of wind and solar development and may adopt rules for that purpose.
Maryland enacted SB 153, which amended the state’s renewable energy portfolio standard (RPS) by increasing the requirements for municipal utilities. The amendments require that municipal utilities source 20.4% of their energy from Tier 1 renewable sources, which includes wind, and added a specific carveout of up to 2.5% from offshore wind. The new requirements begin in 2022.
Virginia’s SB 1295 amends the Commonwealth’s RPS to include specific provisions related to wind energy. In 2020, Virginia enacted the comprehensive Clean Economy Act, which positioned the state as a leader in clean energy transition policy. In that same vein, SB 1295 would require that developers of land-based wind facilities within the Commonwealth procure equipment from a Virginia-based or United States-based manufacturer using materials or products made in Virginia or the United States.
Onshore wind development has been occurring in the United States for many years now, so some states are beginning to consider the decommissioning process for outdated or retired wind turbines and equipment. Ohio enacted SB 52 which requires wind developers to submit a decommissioning plan to the power siting board and post a bond to cover the estimated costs of decommissioning. Similarly, West Virginia’s SB 492 establishes decommissioning and reclamation procedures for wind generation facilities, including the provision of bonds to cover associated costs.
New Solar Development
Renewable energy experienced a big year in 2021 and this is especially true for solar energy. The U.S. saw near-record numbers of new solar installations in the second and third quarters of 2021, installing 5.7 GW and 5.4 GW, respectively. New solar development accounted for 54% of all new electricity-generating capacity additions in the first three quarters of the year. Projections suggest that more than 20 GW of new solar came online in 2021, inching closer to the annual rate suggested by the DOE’s Solar Futures Study released in September 2021.
Driving this growth was the installation of utility-scale solar projects, which many states have supported through new policies. Arizona, Connecticut, Iowa and Virginia, are among the many states that had large, utility-scale solar power projects begin in 2021.
Legislative trends mirrored the growth of the solar industry in 2021. New Jersey enacted AB 4554 to push the state closer to its renewable energy generation goals by incentivizing solar development specifically. New Jersey’s RPS requires 50% of its electricity come from renewable energy by 2030. The goals outlined in AB 4554 posit that solar power will generate 17 GW by 2035 and 32 GW by 2050. To incentivize that buildout, the bill establishes the Solar Renewable Energy Credit II program and sets the first benchmark of bringing nearly 4 GW of solar power online by 2026.
At least two states enacted policies to support solar-plus-storage development. Connecticut enacted SB 952, which directs the state PUC to report on the state’s mid-and end-of-decade solar and storage goals, and develop programs to promote energy storage systems that are located “in front” of the meter. Virginia also enacted solar energy and storage legislation (SB 1207), making the process of siting solar and storage facilities easier.
Despite these trends, things were not always sunny for solar energy in 2021. Supply chain issues resulted in surging costs and delayed development for many solar energy projects. In addition, potential new tariffs and trade restrictions on Chinese-made solar panels and other equipment resulted in increased costs and restricted the availability of components necessary for solar development. Louisiana also enacted two pieces of legislation reducing the incentive for solar development in the state. SB 185 places additional restrictions and oversight over utility-scale solar development and HCR 40 suspends industrial tax incentives for utility-scale solar.
Community solar accounted for another major component of the increased solar development over the past year. Community solar, which is also referred to “shared renewable energy,” is similar to residential rooftop solar except it involves multiple individuals and larger or interconnected solar arrays. The group of “subscribers” receive energy from the shared renewable energy system and credits are distributed based on the shares each person owns in the system.
There are currently 22 states plus Washington, D.C., with codified community solar policies. The Biden administration has also expressed its commitment to community solar by announcing the National Community Solar Partnership and its goal of generating 20 GW of community solar—enough to power 5 million homes and save $1 billion on electricity costs—by 2025. The initiative is designed to promote the energy justice benefits of community solar by creating a network of stakeholders, providing technical assistance and fostering collaboration.
State legislatures across the country passed significant legislation regarding shared renewables, usually focusing on community solar. Some states established community solar programs while others enacted legislation that expanded or promoted their current programs.
New Mexico SB 84, the Community Solar Act, established a community solar program for the state. The bill sets up rules and regulations for community solar and includes special provisions to promote community solar subscriptions for low-income and tribal members.
Some states expanded their current community renewable energy programs. For instance, Colorado enacted SB 261 which removes many restrictions on distributed renewable generation, including removing the limits on generating capacity of distributed systems. It also encourages multi-unit residences, such as mobile-home parks or apartment buildings, to establish distributed generation systems. Oregon also made efforts to promote community renewable energy with the enactment of HB 2021. This major emissions reduction bill provides grants specifically for community-based renewable energy development.
Consumer protection for shared renewable customers were also addressed this past year. Maryland enacted HB 473 which allows subscribers to community solar systems to maintain their subscription even if they change addresses and prohibits utilities or subscription organizations from cancelling a person’s subscription when they change addresses. Similarly, Texas SB 398 provides community solar customers with protection and information regarding their subscription and market rates and prevents local governments or homeowners associations from restricting access to distributed solar.
Solar Access/Solar Rights
Texas was far from alone in addressing solar access issues in 2021. Solar access refers to a growing body of law that prevents localities, often municipalities or homeowner associations (HOAs), from prohibiting or unreasonably restricting the installation of distributed or residential rooftop solar.
New York enacted SB 2997, establishing the “Solar Rights Act,” which prohibits HOAs from adopting rules, restrictions, or covenants that would prevent or unreasonably restrict the installation of solar energy systems on residential property within the HOA. New York also enacted SB 391, requiring local building and planning regulations to be designed in ways that accommodate the installation of renewable and alternative energy sources.
Illinois enacted HB 644, which adds “solar storage mechanisms,” including batteries, to the list of solar energy systems protected under the state’s solar access laws. It also clarifies that HOAs may not unreasonably restrict the installation of solar energy systems in ways that reduce the production of the system by more than 10%.
Maine’s SB 361 ensures utility customers continue to have access to residential solar generating and storage systems by directing the state PUC to adopt rules regarding the connection of distributed solar resources to investor owned transmission and distribution systems.
As solar energy sources become more prevalent, many state legislatures are pursuing legislation regarding the installation and operation of solar energy systems – for both utility-scale and residential solar. For in- stance, there were multiple bills regarding the taxation, siting, and recycling of solar panels in 2021.
Multiple states considered how to tax solar and other renewable energy facilities. Colorado, Indiana, Montana, Oregon and Texas all enacted legislation surrounding the property tax assessment of land and property used for renewable energy.
Where renewable energy facilities are sited has also been an important topic considered by state legislatures. Montana SB 63 authorized the state land board to lease state lands for wind and solar development. Multiple states also passed legislation concerning the siting of renewable energy facilities on farmland. New Jersey AB 5434 encourages the dual-use of farmland and solar installations by establishing a pilot program and allows certain dual-use property to be assessed solely as farmland under certain conditions. By contrast, Maine enacted SB 206, which convenes a working group to discourage the use of high-value agricultural land for siting solar arrays and instead looks to marginal-value land for those facilities. Oregon HB 2109 concerns county permitting procedures for wind, solar, and geothermal facilities on agricultural land.
Like the aforementioned laws regarding the decommissioning of wind energy facilities, some state legislatures are passing laws related to the recycling of solar panels and decommissioning of solar facilities. Hawaii HB 1333 commissions a study to determine best practices for the recycling and disposal of solar panels. Washington HB 1393 postpones the state’s original solar panel recycling and decommissioning requirements as the state looks to establish a more comprehensive program. Conversely, Maine SB 113 establishes decommissioning requirements for solar facilities, including the submittal of a decommissioning plan for all new solar developments. Similarly, Texas SB 760 sets parameters for the removal and decommissioning of solar power facilities, and decommissioning bills from Ohio and West Virginia discussed in the wind energy section also apply to solar energy facilities.