Solar Decommissioning Agreement
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Solar developers and counties negotiate decommissioning terms based on the specific needs of the county and the solar power plant. Some counties may or may not have requested decommissioning conditions, with varying degrees of specificity. Many Virginians are unaware that a solar project is being commissioned for the end of the project. The typical life cycle of a utility solar project looks like this: residents and local governments may also wonder: How will a utility solar site leave the country after it closes? SolUnesco is committed to creating an environment in which the land is returned in as good or better condition. SolUnesco will recommend planting wild grasses and fake fetuques and leaving the streets intact for future use by the owners. After the arable land has been removed from production for thirty years or more, the solar project will use it richer and healthier than before for agricultural purposes after recovery. As policymakers have led to the adoption of renewable energy and zero-emission technologies, the cost of solar energy infrastructure has fallen and the rate of solar installations has skyrocketed. In the last five years, about 185 million photovoltaic modules have been installed. With a relatively short project duration, it is important to put on the sustainability hat and consider what happens at the end of the project period.
This is where the creation of a solar dismantling plan comes into play. Although solar energy is a more environmentally friendly energy production technology, it also has the potential to generate a lot of waste. Therefore, recycling is an important aspect to keep projects as sustainable as possible. Recycling of photovoltaic panels does not occur on the side of the road – many states do not even have facilities that can accommodate complete modules. Some recycling plants accept some components of the panels, but others do not. Your panels may need to be transported in a different condition to be recycled, or disassembled and recycled in multiple locations. Look at recycling opportunities in your area and address these costs early on. This market is dynamic, so it is also important to understand the changes from year to year. Federal requirements and guidelines generally do not exist for the dismantling of solar installations, and government requirements are rare and far apart, so local requirements prevail. It is important to understand what is required by your local planning commission, site council or other governing bodies.
Even if your local unit doesn`t have specific requirements, it often has the final say on project approval. Points such as permit, schedule, financial guarantees, environmental requirements, and regulations for waste disposal or recycling can determine the success of a project. A second variant can be found in the conditions of financial security for dismantling. These conditions can take the form of performance guarantees, parental guarantees, letters of credit or certified funds, which are often published within 30 days of receiving a permit of occupation. As a relatively new source of power generation, many utilities and developers have yet to face the challenge of large-scale solar shutdown in the utility sector. We`ve presented four tips to help solar energy owners take early action to help projects with a 20- to 30-year future until the project is complete. Over the past year, SolUnesco has conducted research and published reports on Virginia`s decommissioning requirements in ninety-five counties (Review of Counties Solar Decommissioning Requirements). At the Environment Virginia Symposium, Jon shared our latest research on solar dismantling and explained solUnesco`s perspectives on best practices for Virginia counties. While decommissioning may seem like a distant challenge, working with your local unit at the beginning of your project paves the way for a smooth approval process and eventual decommissioning of the project.
Most licensing authorities require financial security to protect themselves if the owner of the solar energy goes bankrupt or if the project fails and needs to be stopped prematurely. According to the local authority, different forms of financial insurance are required. Preparing financial insurance early is crucial to understanding when payment is required. Projects usually have a sufficiently long value that bonds do not have to be accounted for until year 10 or 15, which frees up bond capital in the first few years. These are not insignificant sums of money, so it is important to have an accurate estimate of decommissioning prepared or reviewed by a professional engineer or licensed contractor. B. On March 27, SolUnesco President Jon Hillis presented at the 2019 Virginia Environment Symposium. Speaking to other industry and environmental leaders, Jon discussed the evolving requirements of Virginia counties for solar power plants as part of their permitting process. Jon has generally focused on the decommissioning requirements imposed on these solar power plants by counties. These examples of best practices ensure that all parties reap the mutual benefits of utility solar systems in Virginia. And the benefits will be great.
Currently, it is estimated that a sample of six solar projects in five Virginia counties are contributing: As with wind energy agreements, solar power plant contracts must now include provisions stating that the recipient must demonstrate that it will be able to meet its restoration obligations. The amount of the financial guarantee depends on the amount by which the estimated cost of the beneficiary`s relocation and restoration obligations exceeds the replacement value of the solar installations minus the value of the solar installations promised to cover unpaid debts. SB 760 requires that these estimates be determined by an independent engineer licensed by a licensed third party in Texas. The beneficiary shall bear all costs related to obtaining the financial guarantee and determining the estimated costs and values. The recipient must submit the redevelopment estimate to the landowner or before the 10th anniversary of commercial operation under the Solar Energy Agreement and at least every 5 years thereafter for the term. For more information, including questions regarding the development of contractual terms for SB 760 compliant solar power plants, please contact Kara Hayenga, Jennifer Pier, Brian Pullin or another member of Husch Blackwell`s renewable energy group. SB 760 applies to “solar energy system contracts”, which the law defines as a lease agreement between a beneficiary and a landowner that authorizes the beneficiary to operate a solar energy system on the leased property. SB 760 defines the term “solar energy system” to include a solar energy device such as solar panels and any equipment or device used to support the operation of the solar energy device. Similar to Section 301 of the Public Utilities Code (which sets out decommissioning requirements for wind turbine contracts), SB 760 likely also applies to easement agreements that operate as a lease, but the Bill does not apply to sub-agreements solely for transportation, energy storage, access or collection line purposes.
However, Senate Chapter 301 and Bill 760, in their definitions of “wind turbine” and “solar power plant,” include an entity or equipment used “to support the operation” of a wind turbine generator or solar power plant. For example, facilities and equipment such as battery storage systems that are “used” to support a wind or solar project are subject to legal requirements for the dismantling of wind and solar energy. This may be due to various reasons. First, final decommissioning costs can be affected by fluctuations in market prices and technological changes. Local governments naturally want to protect their interests in the face of possible price changes. However, the decision to eliminate the recovery value of the compute is not the solution and can indeed create a financial barrier to solar projects, often for little or no benefit to the community. An example of the variation in decommissioning is the recovery value of solar systems. In short, the salvage value is the remaining value of a component of an energy system at the end of a project`s life cycle. While the Virginia Code recognizes the salvage value in utility removal operations and commercial transactions, most counties remain silent about its inclusion in calculating net decommissioning costs.
At first glance, SB 760 does not appear to apply to solar energy system contracts entered into before September 1, 2021, nor to amendments to solar energy system contracts entered into before or after the effective date of the law, since the law only applies to solar energy system contracts “entered into” after September 1, 2021. .