Article By DWGP Summer Associate Kegan Nelson - UC Davis School of Law 2024The Tennessee Advisory Commission on Intergovernmental Relations (TACIR) released their draft report on utility-scale solar energy development in Tennessee on 29 June, 2023. The final report is due September 30, 2023.
The study found that Tennessee already has mechanisms in place to address most of the concerns with solar development and that the state is ready to accommodate renewable energy projects.
Land Use Concerns:
TACIR identified land use concerns including the loss of farmland, aesthetics, and the desire to protect landowners.
TACIR recommended several ways to protect farmland, including brownfield redevelopment, land trusts, and zoning. It is also possible to leave sufficient room beneath solar panels to allow for shade-resistant crops or grazing. They provided a model solar zoning ordinance to help provide uniformity for solar zoning as counties and municipalities look towards solar development, noting that some counties have already implemented zoning for solar projects.
Tennessee also has a solar decommissioning law that requires operators of a solar project to restore the land to its original condition after the project’s decommissioning. It also requires solar developers to provide financial assurance to landowners to offset any detrimental effects on the land. TACIR still recommended that landowners consult with legal counsel in developing lease terms if they wish to lease land to a solar developer.
Environmental Concerns Related to Solar Development:
Solar panels may contain substances that constitute hazardous waste as defined by Tennessee or federal law, including cadmium, lead, arsenic, copper, and selenium. However, TACIR found that most solar development waste, even that coming directly from photovoltaic panels, is classified as general non-hazardous waste, subject to the same regulations as any other waste. Additionally, most solar waste can be recycled; Middle Tennessee is home to one of the Solar Energy Industry Association’s recycling partners.
Lenders and landlords are also able to require solar developers and operators to carry insurance to cover damages from natural disasters or casualties.
Government Concerns:
TACIR examined what government entities will be involved as the solar industry grows in Tennessee. The Tennessee Valley Authority, Tennessee Division of Water Resources, Division of Solid Waste Management, state fire marshal, Local Power Companies (“LPCs”), and county and municipal agencies all have a role to play: from environmental permitting, to responding to leakages or burning materials, to certifying electrical safety.
Solar developers should be aware of federal, state, and local permitting and certification requirements to operate.
Financial Implications for Solar Development:
Solar facilities come with numerous financial considerations.
First, they affect the local property tax base. Solar facilities are assessed differently from other types of properties, especially agricultural and residential property which is often where solar is built. They are assessed at 55% value rather than the 25% assessment for agricultural and residential property and have the potential to generate significant tax revenue for local governments while not adversely affecting neighboring property values.
Solar developers in Tennessee also have the opportunity to take advantage of a wide variety of legal and financial incentives. These include state programs like the Green Energy Tax Assessment, Sales Tax Credit for Clean Energy Technology, and Tennessee Solar Access Law of 1979. It also includes federal programs such as Renewable Energy Production Tax Credits and the Greenhouse Gas Reduction Fund.
Whether you are a solar developer, a landowner, or an LPC desiring to take advantage of opportunities for solar development, DWGP can guide you. DWGP has experience with every step of project development from financing, to real estate transactions, to environmental analysis, to decommissioning. For questions about how we can help, please contact R. Keith Gordon, Esq.
A link to the draft study is available here.
