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Solar Energy

Municipal Officials’ Guide to Grid-Scale Solar Development in Pennsylvania

Welcome to this new offering from Penn State about grid-scale solar development. We hope Pennsylvania municipal officials will find that the sections below answer their questions about the various aspects of this new development and provide sources for pursuing additional information. These materials are not intended to promote grid-scale solar development, but instead to build local knowledge and create more informed communities making decisions related to local energy production.

To open a subsection below, click on (+) on the right side. To close it, click on (–). You can also click on the headings.

Section 1: GRID-SCALE SOLAR “BASICS”

Section 1: GRID-SCALE SOLAR “BASICS”

Goals of This Publication

Our primary goal with this guide is to explain the emerging grid-scale solar energy development trends occurring in the Commonwealth and what might be expected in the next few years. The guide is intended to inform municipal and county officials about grid-scale solar development so they can potentially add clear, regionally consistent language addressing the specific issues around grid-scale solar energy development to their zoning ordinances and other regulations.

A resources list at the end of this publication provides sources of further information. A glossary defines unfamiliar terms. A notes section provides sources for statistics and additional information. Over time as new information becomes available to further inform this discussion, it will be added to this guide, including information about new legislation affecting solar development and the evolution of new solar technologies.

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What Is Grid-Scale Solar Development?
Grid-scale solar developments (GSSD) (also called utility-scale solar) are often called “solar arrays.” They normally consist of about one hundred to several thousand acres of ground-mounted solar panels that produce electricity for transmission into the power grid for use offsite. A grid-scale solar development typically generates more than 5 megawatts (MW) of electricity, which can be sold to a single downstream user or placed onto the grid for wider use by numerous customers.
Landscape-level view of a large field covered with solar panels. Credit: Penn State MCOR

Credit: Penn State MCOR

How Much Solar Energy Do We Have Now and How Quickly Is It Growing?
Solar energy is becoming one of the least expensive and fastest-growing forms of energy. Solar currently accounts for less than 4% of U.S. electricity production.

The U.S. Energy Information Administration predicted in 2021 that 46 gigawatts (GW) of new grid-scale electric generating capacity—almost half of it solar—would be added to the U.S. power grid in 2022.

A 1-megawatt grid-scale solar installation:

  • Typically takes up about 4–6 acres of land
  • Includes 3,000–4,000 solar panels
  • Costs more than $1 million to build
Projecting grid-scale solar deployment. Credit: PA DEP (left); EIA Data, Prepared by PA DEP
Projecting grid-scale solar deployment. Credit: PA DEP (left); EIA Data, Prepared by PA DEP

Projecting grid-scale solar deployment.

Credit: PA DEP (left); EIA Data, Prepared by PA DEP

Site Selection
In general solar developers are looking for sites that’ll cost the least to develop, so that their return on investment will be greatest. Approximately 80% of GSSD projects in the potential development queue (as of May 2022) in Pennsylvania are planned for open land, which is often agricultural land, because it is most suitable for any type of new land use transition.

Desirable site characteristics:

  • Relatively flat or gently sloping terrain (preferably less than 7% slope) facing east, south, or west
  • Within 1–3 miles of a substation with unused capacity to transmit power
  • Places where there is certainty in how the local government treats solar—what is expected for the site’s setback, fencing, panel coverage, etc.
An electrical substation. Credit: Penn State MCOR

Credit: Penn State MCOR

Advances in solar panel technology have made GSSD viable in all regions of Pennsylvania. The solar irradiance levels found at these latitudes have the potential to generate enough electricity to make projects economically feasible.
Why GSSD Here? Why Now?
Pennsylvania has more open space than many states in the Northeast and Mid-Atlantic, yet is near those population centers. The installed cost of solar panels has dropped about 70% since 2010, and the market for solar energy is hot. The US Department of Energy reported that at the end of 2020, the U.S. had proposals for at least 460 GW of grid-scale solar (GSS) power capacity.

Pennsylvania has long been an electric power exporter, sending excess electricity to surrounding states. So the state has much of the critical electrical infrastructure needed to support solar facilities. As solar companies propose and plan new sites, they will typically be looking for the most commercially viable pathway to connect to existing electrical transmission infrastructure, because those connections are a significant cost of any GSS project.

U.S. solar historic installed costs and cost forecast showing solar cost decline of approximately 70% since 2010. Credit: Dan Brockett, Penn State Extension, compiling federal data sources.

U.S. solar historic installed costs and cost forecast showing solar cost decline of approximately 70% since 2010.

Credit: Dan Brockett, Penn State Extension, compiling federal data sources.

The Leasing Process

When considering leasing land for solar energy development, it’s highly recommended that landowners not sign ANYTHING without getting qualified legal advice. A solar lease is a legal obligation that may last for 25–50 years and deeply affect how the land can be used.

Many properties will be optioned for solar development and investigated, but only 10–20% of those projects will likely be built.

 

Letter of Intent

A landowner may receive a letter of intent from the solar developer. Typically, the letter of intent:

  • Is only one page.
  • May discuss general financial terms of a lease agreement.
  • Features a nondisclosure agreement specifying that future terms negotiated cannot be disclosed to others. The landowner should modify those terms so that they can discuss the agreement with family, attorneys, and financial advisors.

 

Option Agreement

An option agreement is a private legal agreement between the landowner and the developer. No government entity has to sign off on its terms.
The option agreement establishes the option for the development company to lease the land for solar development. Typically, the option agreement:

  • Lasts for 1–5 years with the opportunity for the developer to extend that.
  • Is 2–15 pages in length.
  • Brings a financial payment to the landowner upon signing. The payment is typically a few thousand dollars per year total, not per acre.

It is critical for landowners to know that if they sign an option agreement, they are also typically agreeing to the terms of the underlying lease, contained in the option contract, in its entirety. The landowner must be satisfied with the terms of the lease before they sign the option agreement.

Once the option agreement is signed the developer has the land legally tied up and the landowner cannot sign another option agreement with a different company for the same land.

Preconstruction Activities

Studies

The relatively long period of time for the option agreement stems from the developer’s need to do due diligence research on that particular site. This involves the developer exploring in more detail what it would take to develop a particular property and ultimately decide if they want to go forward with development.

During this time the developer will:

  • Conduct title searches to see if any other entity has an interest in the land (for example, mortgage, right-of-way, easement, lease, mineral rights).
  • Submit the project into the PJM Interconnection new services queue. PJM is the regional electric grid operator. This step includes ensuring that a nearby substation has the capacity to carry the electricity generated by the new solar project.
  • Explore the municipality’s and county’s requirements for solar projects.
  • Consider local residents’ reactions to the project.
  • Work out an engineering plan for the site and seek investors for the project.
  • Potentially find a buyer for the power to be produced by the new solar array and negotiate a solar power purchase agreement with a buyer.

It’s also important to know that:

  • The developer can back out of a signed option agreement at any time. They will do this if they find something about the property that would prevent them from developing the project as envisioned.
  • The developer might develop only part of the total land under the option. This would decrease the total yearly rent the landowner receives.
  • The landowner likely cannot get out of an option agreement or amend it after they sign.

Lease

The lease is the legal document binding the landowner and the company. The company may decide to exercise the option contract on the property and then the underlying lease if their due diligence exploration of the proposed project and property are favorable. The lease:

  • Is typically 20–60 pages of complex legal language that guides the terms of project development.
  • Typically extends for about 25 years.
  • Addresses payments to the landowner on a per-acre-used annual basis. These tend to range from $300 to $2,400/acre/year (in 2022). A common range is $1,000–1,500/acre/year, with regional differences based on site characteristics such as topography, access to transmission infrastructure, and ability to construct the project given existing and proposed land use regulations.

The generic lease terms favor the solar developer, but with wise negotiation, landowners can improve the terms.

PJM Interconnection and Its Role in GSSD in Pennsylvania

PJM Interconnection is a regional electricity transmission organization that operates the electricity grid reaching more than 65 million people in the mid-Atlantic and parts of the Midwest. This includes all of Pennsylvania.

Most projects submitted to PJM for approval won’t actually be built. The developers decide to move forward only with the projects that promise the greatest return on investment, and technical and regulatory approval. As projects fall out of the PJM new services queue, new projects are added in.

Municipal and Public Input on GSSD

After the option is signed and the developer has some assurance of the availability of capacity in the nearest substation, the municipality or township typically gets their first look at the proposed project. The local municipality or county, or the company might offer a public meeting to discuss the plans.

Each state has different requirements for governmental review of solar projects. In Pennsylvania municipal or township officials are responsible for reviewing all applications to build GSS projects and regulating where and how solar projects can be built.

In Pennsylvania, the Public Utility Commission is not involved in GSS siting or permitting.

PA DEP’s role involves issuing stormwater management permits as it would for any large-scale land development.

The county conservation district is typically involved with planning to control erosion and sedimentation, and the stormwater review process.

Large-capacity solar projects operating, under development, or under construction in Pennsylvania and the Mid-Atlantic, May 2022. Credit: Solar Energy Industries Association, https://www.seia.org/research-resources/major-solar-projects-list

Large-capacity solar projects operating, under development, or under construction in Pennsylvania and the Mid-Atlantic, May 2022.

Credit: Solar Energy Industries Association, https://www.seia.org/research-resources/major-solar-projects-list

Construction Phase
If the developer decides to exercise the option and lease, the project buildout then begins. During installation of a large project, the developer will have a hundred or more workers on site for a relatively short time.

The site is mechanically cleared of trees and shrubs, if needed, and an exterior fence is built. The land is surveyed to determine the exact locations where panels will be installed. Access roads are placed between sets of panels for maintenance. Trenches are dug for wiring and panel support posts are installed. Solar panels are bolted to galvanized steel and aluminum support structures (“racks”) and wired together. Inverters and transformers (see Section 2 for more details) are installed and all system components are connected. Once the system is tested, the facility is turned on.

Current estimates are that it costs more than $1 million per MW to develop a GSS project.

Decommissioning Phase

Most leases run for 20–25 years. Typically the lease includes language allowing for extension of the lease timeframe.

A solar lease will include information about termination of the lease and what happens then. The agreement typically calls for the solar panel owner to restore the land to essentially the same condition as it was in before panel installation began. The lease may specify that funds for the cleanup and restoration be held in escrow to ensure that they’re available when needed.

Some municipalities have requirements for decommissioning in their solar ordinances. Decommissioning requirements are an active area of legislation in the Pennsylvania legislature, so check https://www.legis.state.pa.us/ for updates.

Conclusion
The low-end estimate of total investment in solar development in the U.S. is $500–700 billion over the next decade. Developers want predictability and stability in local regulations as they plan to deploy GSS technology in communities across the state. It is important for local officials to clarify GSS expectations in their zoning ordinances to ensure orderly development of solar if it is going to be permitted, just as they do with all other types of land uses, and for the benefit of all community residents.
For More Information

Agricultural and Natural Resources Law. North Carolina State University Extension. https://farmlaw.ces.ncsu.edu/energy/renewable-energy-solar-wind-biogas/solar-energy/

Community Planning for Solar Toolkit. University of Massachusetts, Amherst. https://ag.umass.edu/clean-energy/research-new-initiatives/solarplanning

Farmland Owner’s Guide to Solar Leasing. National Agricultural Law Center. https://nationalaglawcenter.org/wp-content/uploads/assets/articles/hall_solar_Leasing.pdf

Health and Safety Impacts of Solar Photovoltaics. North Carolina State University. https://content.ces.ncsu.edu/health-and-safety-impacts-of-solar-photovoltaics

New York Solar Guidebook for Local Governments. NYSERDA. https://www.nyserda.ny.gov/solarguidebook

Solar energy education resources. Penn State Extension. https://extension.psu.edu/shopby/solar

Solar Leases: Clearing Matters of Title During Solar Developer Due Diligence. North Carolina State University Extension. https://farmlaw.ces.ncsu.edu/solar-leases-clearing-matters-of-title-during-solar-developer-due-diligence/

Legal Issues Surrounding Due Diligence for Solar Development. North Carolina State University Extension. https://content.ces.ncsu.edu/legal-issues-surrounding-due-diligence-for-solar-development

Understanding Solar Energy Agreements. National Agricultural Law Center. https://nationalaglawcenter.org/wp-content/uploads//assets/articles/ferrell-solar.pdf

Utility Scale Solar: Land Use, Policy and Emerging Ordinances An Interactive Q and A Webinar. Penn State Extension. Sept. 23, 2020. https://extension.psu.edu/utility-scale-solar-land-use-policy-and-emerging-ordinances-an-interactive-q-and-a

Glossary
Decommissioning–The phase of a solar project after the operational phase during which the panels and all associated equipment are removed from the site.

Due diligence–The research and analysis done by both parties in a legal agreement to thoroughly investigate the details of the transaction in question.

Easement–A legal right to some part of another’s private land.

Escrow–Funds paid by the developer and held for use in decommissioning a solar site at the end of the lease term and restoring the land.

Gigawatt (GW)–A unit of power equal to 1 billion watts, 1 million kilowatts, or 1,000 megawatts.c

Grid-scale solar (GSS)–Solar installation intended to supply power to the grid for use off-site from where the panels are; typically >5 MW. Also called “utility-scale solar.”

Inverter–Electrical equipment that converts direct current (DC) produced from the sun’s rays to alternating current (AC), which powers most electrical equipment.e

Kilowatt–A standard unit of electrical power equal to 1,000 watts.c

Letter of intent–Document sent by solar developer to landowner. Sometimes comes before the option agreement. Can be legally binding and lay out terms of a potential lease. The main purpose is often to establish a nondisclosure agreement specifying that future terms negotiated cannot be disclosed. Also called term sheet or preliminary agreement.

Megawatt (MW)–The standard measure of a solar array’s generating capacity; equal to 1,000 kilowatts or 1,000,000 watts.c

Nondisclosure agreement (NDA)–A provision common to many solar leases stating that the signer may not divulge sensitive information contained in the agreement.

Option agreement–A legally binding agreement between a solar developer and a landowner granting rights to the developer.b

PJM Interconnection, LLC–A regional transmission organization that manages the high-voltage electricity grid reaching more than 65 million people in the Mid-Atlantic and parts of the Midwest. They also manage a long-term regional electric transmission planning process for the service area.

Right-of-way–Permanent or temporary easement allowing certain access to private land.

Solar array–Numerous solar modules grouped to collect the sun’s energy. Sometimes called a “solar facility.”

Solar developer–A company that sees a solar array from idea to construction, including identifying suitable land; conducting relevant technical studies for the site; obtaining necessary local, state, and/or federal permits; finding a buyer for the power to be produced; obtaining financing to build the solar array; and identifying a company to build the solar array. Many times, the developer sells the array to another company once building is set to start or once it is built.

Solar energy–”Radiant energy (direct, diffuse, and/or reflective) received from the sun.” a

Solar lease–A legally binding agreement between a solar developer and a landowner granting the developer the right to develop the land for solar energy production.

Solar module–Solar cells grouped to collect the sun’s energy.

Solar panel–The part of a solar energy system containing one or more photovoltaic cells or modules. Its purpose is to harness solar energy for electricity.

Solar power purchase agreement–A contract between the producer of solar power and the purchaser of the electricity generated through the solar array. It addresses how much energy the purchaser will buy and at what price.

Substation–Equipment that changes the voltage of energy. Electricity comes from the solar array to the substation and is converted into a higher voltage at the substation for transmission via high-voltage lines. Near the end user of the electricity, a substation would step the electricity down to a lower voltage usable by most appliances.

Utility-scale solar–See “grid-scale solar.”

Notes

“46 gigawatts (gw) of new grid-scale electric generating capacity” (in How Much Solar Energy Do We Have Now and How Quickly Is It Growing?)

Source: EIA Predicts Solar Will Make Up Half of New U.S. Electric Generating Capacity in 2022. Solar Industry Magazine. Jan. 2022. https://solarindustrymag.com/eia-predicts-solar-will-make-up-half-of-new-u-s-electric-generating-capacity-in-2022

 

Statistics on development of 1-megawatt grid-scale solar installation (in How Much Solar Energy Do We Have Now and How Quickly Is It Growing?)

Source: PA DEP estimate from Dan Brockett. Prices, Economics, and Impacts of Utility-Scale Solar Leasing in Pennsylvania. Penn State Extension webinar, May 4, 2021.

 

“The installed cost of solar panels has dropped about 70% since 2010” (in Why GSSD Here? Why Now?)

Source: D. Brockett, Overview of Pennsylvania Utility-Scale Solar Development: Why Here, Why Now?, Penn State Solar Law Symposium: Utility-Scale Solar Development for Lawyers, Landowners and Others. June 15, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/06/PSU-Solar-Law-Symposium-Day-1-session-1-Dan-Brockett.pdf

 

Lease rates “tend to range from $300 to $2,400/acre/year. A common range is $1,000–1,500/acre/year, with regional differences.” (in Preconstruction Activities)

Source: D. Brockett, Overview of Pennsylvania Utility-Scale Solar Development: Why Here, Why Now?, Penn State Solar Law Symposium: Utility-Scale Solar Development for Lawyers, Landowners and Others. June 15, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/06/PSU-Solar-Law-Symposium-Day-1-session-1-Dan-Brockett.pdf

 

“The low-end estimate of total investment in solar development in the U.S. is $500–700 billion over the next decade.” (in Conclusion)

Source: M. Badissy. Utility Scale Solar: Land Use, Policy and Emerging Ordinances – An Interactive Q and A. Penn State Extension webinar, Sept. 23, 2020. https://extension.psu.edu/utility-scale-solar-land-use-policy-and-emerging-ordinances-an-interactive-q-and-a

 

Some glossary definitions are adapted from or quoted from these sources: (in Glossary)

a Cumberland County Planning Department. 2011. Solar Energy Systems Model Ordinance. https://www.ccpa.net/DocumentCenter/View/7947/final-solar-4-19-11?bidId=

b Hall, P.K., E. Bachelor, and E. Romich. 2019. Farmland Owner’s Guide to Solar Leasing. National Agricultural Law Center. https://nationalaglawcenter.org/center-publications/renewableenergy/

c Office of Energy Efficiency & Renewable Energy, U.S. Department of Energy. 2011. Solar Powering Your Community: A Guide for Local Governments, 2nd ed. https://www.nrel.gov/docs/fy11osti/47692.pdf

d Office of Energy Efficiency & Renewable Energy, U.S. Department of Energy. Solar energy glossary. Accessed Dec. 10, 2021. https://www.energy.gov/eere/solar/solar-energy-glossary

e New York State Energy Research and Development Authority (NYSERDA). 2020. New York Solar Guidebook for Local Governments. NYSERDA, Albany, NY. https://www.nyserda.ny.gov/solarguidebook

Disclaimer and Funding

By Thomas B. Murphy, Director, Penn State Marcellus Center for Outreach and Research, and Joy R. Drohan, Eco-Write, LLC.

Web design by Bernd J. Haupt. PDF design by Patricia Craig.

This material is based upon work supported by the United States Department of Energy, Office of Energy Efficiency and Renewable Energy, under State Energy Program Award Number DE‑EE0008293.

This material was prepared with support and funding of the Pennsylvania Department of Environmental Protection (DEP) and the US Department of Energy’s (DOE) State Energy Program. Any opinions, findings, conclusions, or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the DEP or DOE. This report was prepared as an account of work sponsored by an agency of the U.S. Government. Neither the U.S. Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the U.S. Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the U.S. Government or any agency thereof.

Additional support provided by the Penn State College of Agricultural Sciences, the Penn State Marcellus Center for Outreach and Research, and the Penn State College of Earth & Mineral Sciences.

Section 2: GRID-SCALE SOLAR TECHNOLOGIES

Section 2: GRID-SCALE SOLAR TECHNOLOGIES

Goals of This Publication

Our primary goal with this guide is to explain the emerging grid-scale solar energy development trends occurring in the Commonwealth and what might be expected in the next few years. The guide is intended to inform municipal and county officials about grid-scale solar development so they can potentially add clear, regionally consistent language addressing the specific issues around grid-scale solar energy development to their zoning ordinances and other regulations.

A resources list at the end of this publication provides sources of further information. A glossary defines unfamiliar terms. A notes section provides sources for statistics and additional information. Over time as new information becomes available to further inform this discussion, it will be added to this guide, including information about new legislation affecting solar development and the evolution of new solar technologies.

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Introduction
How exactly are the sun’s rays harnessed to produce the electricity we use to power our appliances, our lights, and increasingly, our cars? This guide offers municipal officials an overview of the basics of what’s involved with grid-scale solar development (GSSD). Having a better understanding of the technology will offer municipal and county officials an easier pathway as they consider solar ordinances in their jurisdictions. Of course, there are also other key factors to assess as possible ordinance development proceeds.
Rows of solar panels with high tension lines in back. Credit: Photo by Dennis Schroeder, NREL 53041

Rows of solar panels with high tension lines in back.

Credit: Photo by Dennis Schroeder, NREL 53041

Basic Solar Panel Technology
A solar panel consists of numerous solar cells. Each solar cell contains semiconducting material in which electrons are excited by the sun’s rays. This generates direct current (DC). Panels are wired together into solar modules, which are wired together into a solar array to combine their voltage. Electrical current flows along conductors from the array to an inverter. The inverter transforms DC into alternating current (AC), which powers most common electrical appliances. A transformer raises, or steps up, the output voltage from the inverter to the voltage needed in the utility grid.
Solar panels are wired together and the current generated passes through an inverter (box on pole on right). Credit: Penn State MCOR
Solar panels are wired together and the current generated passes through an inverter (box on pole on right).

Credit: Penn State MCOR

A transformer at a GSS array. Credit: Penn State MCOR

A transformer at a GSS array.

Credit: Penn State MCOR

Current Options in GSS Solar Panels
The solar panels being installed now are monofacial or bifacial. Monofacial panels capture the sun’s energy only on the surface that faces the sun. Bifacial panels capture the sun’s rays that hit the surface of the panel and also the sun’s energy that’s reflected off the ground underneath the panel. Bifacial panels are more energy efficient.

Most monofacial panels today are less than 25% efficient. But new technologies are in various stages of development to increase efficiency. Bifacial capacity typically adds 2–5% greater efficiency to the panel but also increases the cost substantially.

Tracking panels are increasingly common. Single-axis tracking panels move about every 10 minutes to maintain maximum exposure to the sun as it moves throughout the day. Dual-axis tracking panels adjust to the sun’s movement throughout the day and also to its movement throughout the year. These adjustments help maximize the potential efficiency of the panels. As panels become more efficient, the amount of land needed for GSSD is expected to decrease.

GSS Operational Now in Pennsylvania

As of the end of 2021, four of the eight current grid-scale solar arrays in Pennsylvania are in Franklin County, in the southcentral part of the state. The largest in 2021 was a three-part 500-acre-total ground-mounted solar array that supplies Penn State University with 25% of their power needs across the whole campus system. The 70 MW project located just outside of Chambersburg contains more than 150,000 solar panels.

Also in Franklin County, another site supplies power for SEPTA, the regional public transportation authority serving the Philadelphia area. The site is expected to provide 20% of SEPTA’s electricity over the life of the contract.

A bifacial panel generates electricity from both the upper and lower faces. Credit: Penn State MCOR
A bifacial panel generates electricity from both the upper and lower faces.

Credit: Penn State MCOR

Transfer of Energy Produced by the Sun in Photovoltaic Panels to End-Users of the Power
A solar array is typically connected to the off-site power grid through three-phase1 power lines that run to and along the street, either aboveground or belowground, to the nearest substation. From the substation, electricity flows into the power grid via high-voltage transmission lines. Electricity flows from the grid to the “offtaker,” which could be a power company or a large industry. Electricity is used by “end users” for residential, commercial, and industrial power needs. A neighborhood transformer steps down the voltage from the transmission lines to that needed by end users.
Model of electric power generation, transmission, and distribution. Credit: Adapted from National Energy Education Development Project (public domain).
Model of electric power generation, transmission, and distribution. In the case we’re discussing here, the GSSD replaces the power plant.

Credit: Adapted from National Energy Education Development Project (public domain).

1Homes are usually served by a single-phase power supply. Commercial and industrial facilities usually have a three-phase supply, which accommodates heavy equipment requiring higher power loads.

Three-phase lines are the most common and are typically seen running along roads. They have four lines—three for power and the fourth is a ground wire.

Typical Costs of Grid-Scale Solar Development
 
GSS developers typically focus on sites where a substation is within 1–3 miles of the site where the electricity from solar is generated. Upgrading infrastructure such as poles to carry the power produced to the substation can cost more than $1 million per mile. The cost to run a new line is $150–200 per foot.

GSS installation costs about $1.13 million per built megawatt. A megawatt of solar panels typically covers about 4–6 acres, depending on the company and the technology used.

Roadside electric poles. Credit: Penn State MCOR

Credit: Penn State MCOR

Maintenance of GSS Arrays
Washing

The eastern U.S. gets enough rain and snow that this is unnecessary. Some system owners may wash the panels occasionally to increase production, but this is uncommon and would be done only in cases of severe dusty conditions.

Snow Removal

It is rare that snow would need to be removed. The panels are dark and tilted, so with a little sunshine the snow typically sloughs off within hours except in extreme cold conditions, which can happen on occasion.

Equipment Maintenance and Repair

The solar energy company typically contracts with an operating firm to perform routine technical and troubleshooting maintenance. The operator needs access to the site to handle this, and the site must be accessible by emergency vehicles in case of an accident. The turning radius at the end of the row of panels, also called the setback from end of row to fence line, must be wide enough to handle this traffic. The site must also be accessible to a snowplow in winter.

Vegetation Management

Vegetation under panels must be maintained so it doesn’t grow tall enough to shade the panels. This maintenance may be done by an outside contractor or by the landowner under the terms of the lease. Woody plants, vines, and large invasive weeds such as autumn olive and honeysuckle grow too tall and must be periodically mowed if they get established. A mower, weed whacker, or bush hog might be used.

Vegetation may also be managed with livestock, most commonly sheep, which itself creates unique access requirements and emergency management requirements. For more on “agrivoltaics”—the farming of the ground underneath a solar array—see Section 5 (to come). Agrivoltaics are a growing farming practice as more shepherds understand the opportunities to provide this service at a fee to energy companies owning solar facilities.

Clover and wildflowers growing under solar panels. Credit: Penn State MCOR

Credit: Penn State MCOR

Photovoltaic Energy Storage and Emerging Storage Technologies
Some of the inefficiency of solar energy systems comes when power is produced but not used because the grid isn’t “demanding” the power then—supply is greater than demand.

Electricity storage allows power that’s not accepted into the grid to be saved for when demand exceeds supply. Most current GSS installations don’t have storage capabilities, but it is becoming increasingly common. The most common storage systems use lithium battery technologies similar to the type powering newer electric vehicles.

Most new solar projects will have battery storage facilities. These are optimally placed within the solar array, rather than at the edge, because of equipment noise, mainly from cooling fans.

Municipal officials should be aware that in the future, solar companies may want to install newer types of energy storage technologies at existing solar arrays. This could require additional land and setback allowances to accommodate noise, light, vehicular traffic, and other impacts.

Battery Storage

Battery storage is currently the most common kind of electricity storage. It is now commercially viable, and prices declined by about 27% per year between 2015 and 2019. About 20% of the projects currently in the PJM queue include a plan for battery storage.

The quest to increase battery efficiency, reduce the use of rare earth metals, and incorporate more materials produced within the U.S. is the subject of ongoing research.

Other Energy Storage Technologies

Hydrogen is another kind of energy storage in development. Hydrogen would be stored in a tank and moved to where it would be used as a liquid fuel, expanding the scope of possibilities for solar-generated power. There are several types of hydrogen storage, but green hydrogen is most relevant to GSSD.

Green hydrogen uses excess electrical capacity from solar energy to split water into hydrogen and oxygen. The hydrogen can be stored in tanks until the power is needed. This form of energy storage is not yet commercially viable in the U.S. Its development is further along in Europe, but its potential use in the U.S., including in Pennsylvania, is rapidly advancing.

Co-location of green hydrogen storage at a GSSD could be a zoning consideration. This form of energy storage would require trucks to haul out the produced hydrogen, which would bring more people into the solar facility and have implications for transportation infrastructure nearby.

Municipal officials should keep in mind that there could be additional accessory land use considerations for possible co-located energy storage systems, as they find greater commercialization across the state in the future. Energy storage is a potential spinoff of a solar array, analogous to the need for compressor stations after initial development of shale gas wells, with accompanying noise and potential need for emergency response.

Battery storage (Dynapower) at a GSSD site. Note cooling fans on top of battery unit. Transformer in front. Credit: Penn State MCOR
Battery storage (Dynapower) at a GSSD site. Note cooling fans on top of battery unit. Transformer in front.

Credit: Penn State MCOR

Conclusion

Solar technology will likely expand in areas where it is most economical. The 2021 Solar Futures study, from the U.S. Department of Energy, laid out a possibility for the U.S. energy future: “New tools that increase grid flexibility, like storage and advanced inverters, as well as transmission expansion, will help to move solar energy to all pockets of America. Wind and solar combined will provide 75% of electricity by 2035 and 90% by 2050, transforming the electricity system.”

For More Information

Battery Storage in the United States: An Update on Market Trends. 2021. https://www.eia.gov/analysis/studies/electricity/batterystorage/

DOE Releases Solar Futures Study Providing the Blueprint for a Zero-Carbon Grid. 2021. U.S. Department of Energy. https://www.energy.gov/articles/doe-releases-solar-futures-study-providing-blueprint-zero-carbon-grid

Health and Safety Impacts of Solar Photovoltaics. 2017. North Carolina Clean Energy Technology Center, North Carolina State University. https://content.ces.ncsu.edu/health-and-safety-impacts-of-solar-photovoltaics

Low-Conflict Solar. Alyssa Edwards, Lightsource bp. Penn State Solar Law Symposium, June 17, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/06/PSU-Solar-Law-Symposium-Thurs-Alyssa-Edwards.pdf

Photovoltaic Energy Factsheet. 2021. Center for Sustainable Systems, University of Michigan. https://css.umich.edu/factsheets/photovoltaic-energy-factsheet

Solar in PA: A Developer’s Perspective. Phillip Guerra, Forefront Power. Penn State Solar Law Symposium, June 17, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/06/PSU-Solar-Law-Symposium-Thurs-Guerra-Phillip.pdf

Solar Energy Development in Pennsylvania—What’s Currently Happening and What’s Expected. Penn State Extension webinar, Aug. 5, 2020. https://extension.psu.edu/solar-energy-development-in-pennsylvania-whats-currently-happening-and-whats-expected

Solar Photovoltaic Technologies Basics. Solar Energy Technologies Office, U.S. Department of Energy. n.d. https://www.energy.gov/eere/solar/solar-photovoltaic-technology-basics

Glossary
Notes
“Most monofacial panels today are less than 25% efficient.” (in Current Options in GSS Solar Panels)

Source: Photovoltaic Energy Factsheet. 2021. Center for Sustainable Systems, University of Michigan.
https://css.umich.edu/factsheets/photovoltaic-energy-factsheet

 

Information on Penn State’s solar arrays in Franklin County (in GSS Operational Now in Pennsylvania)

Source: Solar Projects at Penn State. Penn State Sustainability Institute. n.d. https://sustainability.psu.edu/campus-efforts/operations/energy/solar-projects/

 

Information on SEPTA’s solar array in Franklin County (in GSS Operational Now in Pennsylvania)

Source: Alyssa Edwards, Lightsource bp. Low-conflict Solar. Penn State Solar Law Symposium: Utility-Scale Solar Development for Lawyers, Landowners and Others. June 17, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/06/PSU-Solar-Law-Symposium-Thurs-Alyssa-Edwards.pdf

 

“The cost to run a new line is $150–200 per foot.” (in GSS Operational Now in Pennsylvania)

Source: Phillip Guerra, Forefront Power. Solar in PA: A Developer’s Perspective. Penn State Solar Law Symposium: Utility-Scale Solar Development for Lawyers, Landowners and Others. June 17, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/06/PSU-Solar-Law-Symposium-Thurs-Guerra-Phillip.pdf

 

“GSS installation costs about $1.13 million per built megawatt.” (in How Much Does Grid-Scale Solar Development Typically Cost?)

Source: PA DEP estimate from Dan Brockett. Prices, Economics, and Impacts of Utility-Scale Solar Leasing in Pennsylvania. Penn State Extension webinar, May 4, 2021.

 

Battery storage “prices have declined by about 27% per year between 2015 and 2019.” (in How Is Solar Energy Currently Being Stored, and What Storage Technologies Are Now Emerging?)

Source: Battery Storage in the United States: An Update on Market Trends. 2021. U.S. Energy Information Administration. https://www.eia.gov/analysis/studies/electricity/batterystorage/

 

2021 Solar Futures study from the U.S. Department of Energy (in Conclusion)

Source: DOE Releases Solar Futures Study Providing the Blueprint for a Zero-Carbon Grid. 2021. U.S. Department of Energy. https://www.energy.gov/articles/doe-releases-solar-futures-study-providing-blueprint-zero-carbon-grid

Disclaimer and Funding

By Thomas B. Murphy, Director, Penn State Marcellus Center for Outreach and Research, and Joy R. Drohan, Eco-Write, LLC.

Web design by Bernd J. Haupt. PDF design by Patricia Craig.

This material is based upon work supported by the United States Department of Energy, Office of Energy Efficiency and Renewable Energy, under State Energy Program Award Number DE‑EE0008293.

This material was prepared with support and funding of the Pennsylvania Department of Environmental Protection (DEP) and the US Department of Energy’s (DOE) State Energy Program. Any opinions, findings, conclusions, or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the DEP or DOE. This report was prepared as an account of work sponsored by an agency of the U.S. Government. Neither the U.S. Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the U.S. Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the U.S. Government or any agency thereof.

Additional support provided by the Penn State College of Agricultural Sciences, the Penn State Marcellus Center for Outreach and Research, and the Penn State College of Earth & Mineral Sciences.

Section 3: PHYSICAL IMPACTS OF GRID-SCALE SOLAR DEVELOPMENT

Section 3: PHYSICAL IMPACTS OF GRID-SCALE SOLAR DEVELOPMENT

Goals of This Publication

Our primary goal with this guide is to explain the emerging grid-scale solar energy development trends occurring in the Commonwealth and what might be expected in the next few years. The guide is intended to inform municipal and county officials about grid-scale solar development so they can potentially add clear, regionally consistent language addressing the specific issues around grid-scale solar energy development to their zoning ordinances and other regulations.

A resources list at the end of this publication provides sources of further information. A glossary defines unfamiliar terms. A notes section provides sources for statistics and additional information. Over time as new information becomes available to further inform this discussion, it will be added to this guide, including information about new legislation affecting solar development and the evolution of new solar technologies.

BLANK
Introduction

There’s an increasing likelihood that Pennsylvania will see a large investment in grid-scale solar development (GSSD) in the near future. Across Pennsylvania, especially in the southcentral and northwest parts of the state, we’re seeing a surge in interest for GSSD.

Every year solar panels get both less expensive and more efficient, so the cost of building grid-scale solar (GSS) is much less than what it was even a few years ago. Solar energy is typically reliable and becoming more affordable.

Penn State researchers recently analyzed all the 2,500+ zoning ordinances in Pennsylvania and found that only about 5% specifically allow principal-use solar (the generation of solar energy for use off-site). Eighty-seven percent of the municipal zoning ordinances in Pennsylvania include no guidance on solar energy generation, not even rooftop solar for individual homes.

Most municipalities in Pennsylvania don’t have ordinance requirements for GSSD clearly laid out. This can generate additional work, cost, and delay for municipalities facing this form of energy development from solar energy companies. It’s inefficient if municipal officials have to come up with new requirements on a case-by-case basis as GSS projects are proposed. With many municipal officials serving only part-time, the expected investment in solar could quickly overwhelm the current capacity to address project review.

Instead, it can be wise to specify the requirements for GSSD in the zoning ordinance and let the developer identify the most efficient way to meet the requirement given the constraints of the site or abandon the location and move to a different site. Having a clear ordinance saves money, time, and hassle for the township and the developer. Most importantly, officials should be careful to keep the burden on the developer to prove they are not causing additional burdens for a municipality or county as they consider the solar company’s new GSS proposal.

This publication identifies the ways that GSSD affects a community and the landscape and suggests ways to address potential concerns.

After construction, a solar array is typically quiet as a new land use, with minimal traffic. GSSD may increase property taxes for the property owner, but doesn’t increase the local school population, use much water, or generate wastewater, as many other types of land development can do.

A man is silhouetted in front of a long row of solar panels. Credit: Randy Montoya, Sandia Labs, U.S. DOE, Flickr. Licensed under CC BY-NC-ND 2.0

Credit: Randy Montoya, Sandia Labs, U.S. DOE, Flickr. Licensed under CC BY-NC-ND 2.0

Traffic Impact
So far there has been little attention in Pennsylvania zoning ordinances to road impacts of GSSD. There is general language about road impacts in many ordinances, but not specific to solar development.
During GSS site construction there would be increased truck traffic to bring in materials, including semitrailers. During the construction phase of a new GSS project, there can be hundreds of workers there at the high point of panel installation and wiring. Depending on the scale of the project, this construction phase can last for months and create temporary traffic flow and parking issues that must to be planned for and managed.

Planning recommendations:

  • Require that developers indicate which roads traffic for the project will use.
  • Require projected traffic counts for the construction phase.
  • Reserve the right to require a traffic study.
  • Include notification of off-site work to a right-of-way and/or roadside powerline.
  • Require notification of any new roads needed or proposed upgrades to roads.
  • Require the developer to have surety bonds in place for roads before construction begins if road condition is an issue before the project starts.

During operation of the solar array, there would normally be no workers present, except for occasional maintenance or repair work.

Grid-scale solar site under construction. Credit: Scott Kurkoski, Esq

Credit: Scott Kurkoski, Esq

Noise
The noise of an operating GSS array is not normally audible above background noise outside the system’s fence. The inverters, which convert direct current (DC) from the panels into alternating current (AC) used by the electric grid, are the noisiest equipment unless there is battery storage on-site. Inverters make a low buzzing noise of about 55 decibels. Transformer noise differs depending on the voltage involved and the type of cooling system used, but the average is also about 55 decibels. The motors that move tracking panels also generate some noise when the panels are in motion, often once every 10 minutes or so. Any noise for equipment on-site typically fades to background levels 50–150 feet from the site.
Most new solar projects will have electricity storage facilities. These are typically, but not always, placed within the solar array, rather than at the edge, because of equipment noise, commonly from cooling fans. Municipal officials should be aware that in the future, solar companies may want to install energy storage technologies at existing solar arrays. This could require additional land and setback allowances to accommodate noise.

Planning recommendations:

  • Consider siting inverters, transformers, and battery storage near the middle of the array to the extent possible.
  • Consider reserving open space near the middle of the array to accommodate future addition of electricity storage equipment.
  • Consider a noise study done by the solar developer.
  • Have a protocol to measure noise internal and external to the site. Determine who will take measurements, where tests will be done, and who will cover the cost.

Performance Standard More Flexible than Prescriptive Requirements

A performance standard states a general requirement that a developer has to meet, but allows the developer to implement a solution that makes the most sense for the site. An alternative to a performance standard is a prescriptive requirement outlining exactly how a developer must address a particular concern. Developers often seek variances for prescriptive requirements if they see a more cost-efficient way to meet the requirement. Having clear performance standards generally results in greater cost- and time-efficiency for both developers and municipal planners.

 

The under-side of a long row of solar panels, showing an inverter. Credit: Penn State MCOR

The under-side of a long row of solar panels, showing an inverter.

Credit: Penn State MCOR

Glare

Local residents may wonder if a solar array will produce noticeable glare, possibly endangering drivers on nearby roads. Potential neighbors may wonder if an array will reflect light back into their property or irritate local livestock.

Solar panels generate power by absorbing light, not reflecting it. They are generally less reflective than windows. Solar companies don’t want glare, because it’s an inefficient loss of energy.

Some environmental and aviation consulting firms apply the U.S. Federal Aviation Administration’s glint and glare standards to perform a glint and glare study and determine the potential for temporary after-image glare or permanent eye damage glare from a proposed solar development on neighboring land users. Such a study maps the glare minutes per year based on different important points on the landscape (for example, different runways at an airport, single- and two-story homes nearby, and cars and trucks on specific roads).

A sample of a final results table for a glint and glare study conducted for a proposed GSSD facility in Pennsylvania. The results of this analysis predicted no glare for any receptor.

A sample of a final results table for a glint and glare study conducted for a proposed GSSD facility in Pennsylvania. The results of this analysis predicted no glare for any receptor. Green: low potential for temporary after-image glare; yellow: potential for temporary after-image glare; red: potential for permanent eye damage glare.

Glint and glare studies normally find that there’s little glare or reflection risk. If issues are identified, the developer could adjust the placement and/or angles of the panels to lessen glare.

Requiring a glint and glare study and adjustment of the project as needed given the results of the study is a performance standard that provides an effective way for the developer to satisfy potential concerns about glare. A glare study tends to be more effective than a prescriptive system to “eliminate” glare, such as fencing, especially in hilly terrain where some points will be above the fence line.

Planning recommendation:

  • Consider requesting that solar developers do a glint and glare study to identify any potential adverse impacts on neighboring land use. If significant impacts are found, require the developer to adjust the project plans as needed to reduce or eliminate the issue.
Viewshed

Some people may be concerned about neighboring property values and where the panels will be visible from. An ordinance can require the developer to submit a GIS study showing the viewshed of the proposed array and offer screening or alternative placement or orientation to address concerns. Some communities require visual screening with earthen berms, vegetation, or fencing to minimize this potential issue. Plastic inserts in fences or windscreens attached to fences are sometimes used to reduce visual impacts. Additional setbacks from roads are another tool some municipalities and counties use to reduce impacts to viewsheds.

Planning recommendations:

  • Require the developer to conduct a GIS viewshed analysis for the proposed array and adjust screening, placement, or orientation to address concerns.
  • Allow latitude with zoning officer to determine amount of vegetative buffering needed to screen the proposed solar facility from nearby roads and residential/light commercial development.
Screening
Many people don’t want to see solar panels. Some municipal and county governments have requirements for screening. A line of trees, an earth berm, and/or fencing may block the view, especially along the road. When vegetative screening is used, there often is language in ordinances requiring replacement should trees be destroyed or die.

Some ordinances are prescriptive, even specifying the type of trees and height and density for screening. Instead of this strict prescriptive approach, it can be better to require the developer to propose a screening plan that accounts for the realities of the location as long it does the job of screening the site. Screening can be adjusted based on the proximity and type of neighboring land uses and roads. Sometimes screening may be unnecessary if the site is not near residential buildings or next to a public road.

Some new ordinances encourage or incentivize pollinator-friendly vegetation for buffer/screening areas.

Planning recommendations:

  • Require the developer to propose a screening plan that accounts for the realities of the location and effectively screens the site.
  • Screening is normally accomplished through a mix of evergreen and deciduous trees and may be done in conjunction with fencing. Other sections of existing ordinance language may cover similar scenarios with other types of light commercial development within the municipality/county. Consider modifications to screening option, adjusting for the unique characteristics of GSS, particularly the lot size of the overall development and height of the panels.
Saplings planted for vegetation screening of a GSSD. Credit: Penn State MCOR

Saplings planted for vegetation screening of a GSSD.

Credit: Penn State MCOR

Fencing
A GSSD is essentially a power plant, so people and animals should be excluded. There are electrical connections above and below ground. Fencing of the site perimeter is typically required, and fence height and type are often specified in a zoning ordinance. Commonly this is 7- or 8-foot-high chain link fence, sometimes with barbed wire on top. Appropriate hazard signs as required by the National Electric Code should be posted on the fencing warning of the electrical hazard inside.
Site perimeter fence with privacy inserts. Also note setback between panels and fence for vehicle access. Credit: Penn State MCOR

Site perimeter fence with privacy inserts. Also note setback between panels and fence for vehicle access.

Credit: Penn State MCOR

The tall, sturdy gate and perimeter fence, and buffer area between panels and fence for vehicle access. Credit: Penn State MCOR

The tall, sturdy gate and perimeter fence, and buffer area between panels and fence for vehicle access.

Credit: Penn State MCOR

The specific site plan can influence the type of fencing that makes the most sense. Where sheep will graze the vegetation inside the solar site, the developer may want to use high tensile livestock fencing. At some sites, there may be a desire to use wildlife-friendly fencing that lets some small wildlife pass through the site.

The amount of setback of the panels from the fence, and of the fence from the property line, should be indicated in the lease or included in a township ordinance. This should allow for operation and maintenance workers to perform their tasks and emergency management personnel to access the site and turn around at the fence line as needed.

Planning recommendation:

  • Require a perimeter fence of the entire solar array and related equipment, with sufficient setback from the panels to allow for needed maintenance and emergency access.
Setbacks
Many zoning ordinances adopt the same general setback rules for GSS, no matter the size, as for other similar uses. The ordinance may say that the GSSD must comply with the setbacks of the underlying zoning district for principal structures. Other times, special conditions created by GSSD are considered in this type of energy development and new setback requirements are proposed.

Another option is to propose a minimum distance from adjacent residential districts or structures. The setback of panels typically ranges from 20 to 300 feet from the property line of neighboring actively used parcels and can be determined as part of the ordinance development process. Front setbacks from roadways vary as well, and some municipalities and counties are making them more stringent as a way of preserving the character of the surrounding zoning district.

The site layout and setbacks must allow for emergency response access in case a worker is injured on-site, or in case of fire.

Planning recommendations:

  • Require compliance with the underlying zoning districts for principal structures.
  • Alternatively or additionally, require setback of a certain distance from adjacent residential districts and structures.
GSS panels are set back from the road. Note the privacy screening on the fence and the trees planted for visual screening. Credit: Scott Kurkoski, Esq

GSS panels are set back from the road. Note the privacy screening on the fence and the trees planted for visual screening.

Credit: Scott Kurkoski, Esq

Height Requirements

Many zoning ordinances set maximum height requirements for GSS panels. Planners should consider the concerns they hear from residents when developing the height requirement. A maximum of 10–20 feet high for ground-mounted GSS is common. Height requirements can be influenced by topography—whether the parcel is on a hilltop, a hollow, or a flat.

Planning recommendation:

  • Set a maximum height for ground-mounted solar panels. The optimal height will vary by site, but the maximum cannot be exceeded.
Lot/Parcel Size

Proposed GSS facilities in Pennsylvania are commonly 100 acres or more, with most ranging from 500 to 1,000+ acres. Larger sized solar facilities are more economical for the energy companies to construct and operate over time. If multiple projects can be built as one facility, it requires fewer access points into the electrical transmission grid for the same number of megawatts of electricity produced. Accordingly, solar companies are commonly looking at sites that might allow their projects to cross property lines to “scale up” the proposed solar facility.

Existing zoning regulations often make a de facto prohibition on GSSD. Some ordinances have a minimum lot size for GSS of 100 acres, or only 50% of the parcel developed in GSS. In other cases, this delineation might be for a percentage of the prime soils that may exist on the site. The average farm size in Pennsylvania is ~120 acres, so only a small number of farms could meet this condition. The average parcel size of forested lands in the state is even smaller. Most Pennsylvania GSS projects to date have been done on pooled land owned by more than one landowner.

Some regulations also specify a maximum area to be occupied by solar panels. Some are as low as 10 acres. Developers lose the capacity for scale with such a requirement, and the municipality signals to developers that they don’t want big projects.

These types of restrictions are giving rise to lawsuits as unconstitutional or a taking of land, so care should be taken to ensure that they are able to withstand legal challenge and meet Pennsylvania’s Municipal Planning Code.

Planning recommendation:

  • All considerations of minimum lot sizes for GSS or percentage of parcel allowed for GSS development must meet Pennsylvania Municipalities Planning Code requirements.
Lighting

Neighbors may be concerned that a GSSD will have a lot of lights on overnight. This would diminish dark skies for star gazing or could disrupt sleeping. Solar arrays typically only light up the area around transformers, not all the panels. These lights can be on motion activation to reduce impact to dark sky areas. Municipalities may also require GSS facilities to have downward-pointing lights that don’t illuminate the night sky.

Planning recommendation:

  • Require dark sky–protective lighting through the use of motion-activated and/or downward-pointing lights around equipment as needed.
The use of downward-pointing lights only as needed around the transformer and related equipment helps to minimize light pollution from GSSDs. Lights on this equipment are often motion-activated. Credit: Penn State MCOR

The use of downward-pointing lights only as needed around the transformer and related equipment helps to minimize light pollution from GSSDs. Lights on this equipment are often motion-activated.

Credit: Penn State MCOR

Fire Safety and First Responder Safety

Some people wonder about the possibility of fires at solar arrays. Most of the materials in panels are not flammable, and the small amount that is can’t support a significant fire. The flammable parts include the polymer (plastic) outer layers, other plastic parts, and the wiring insulation. Heat from a small flame cannot ignite a solar panel. For example, a wildfire in grass beneath a 3-acre array in California did not ignite the panels mounted on fixed-tilt racks just above the grass.

Firefighters don’t need special equipment to fight fire at a GSSD, but they do need specialized training. The fire department must be made aware of the array, and firefighters must know how to de-electrify the site. The National Electric Code includes requirements that make it easier for first responders to safely and effectively turn off a solar energy system. Numerous groups, including the International Association of Fire Fighters, have developed relevant training materials.

Conclusion

Having GSS specifications outlined up front tells developers the critical criteria they need in initial site selection, so they know what to expect in construction. Ideally, zoning ordinances have answered the question of how a communities want to build GSS before developers propose construction.

Wider examination of solar development in other states such as North Carolina and Minnesota reveals that townships with overly prescriptive regulations are often inundated with variance requests. Analysis of many zoning ordinances suggests that starting the process of regulating GSSD by thinking about what problems GSS creates on the landscape and addressing those issues is efficient for both county and municipal officials and solar developers. Using flexible performance standards that put the onus of proof on the developer to propose a workable solution that is efficient for them can minimize extra work for township officials.

For More Information

Comments for Joint Hearing of the Agriculture and Rural Affairs & Local Government Committees on “Utility Scale Solar Development & Local Government Ordinances.” Prof. M. Badissy, Penn State Dickinson Law. 2021. https://agriculture.pasenategop.com/wp-content/uploads/sites/26/2021/05/Prof-Badissy-Penn-State-Dickinson-Law-Testimony-re-Local-Solar-Ordinance-Research.pdf

Federal Aviation Administration (FAA) Policy: Review of Solar Energy System Projects on Federally-Obligated Airports. 2021. https://www.federalregister.gov/documents/2021/05/11/2021-09862/federal-aviation-administration-policy-review-of-solar-energy-system-projects-on-federally-obligated

National Electrical Code. National Fire Protection Association. 2020. https://www.nfpa.org/codes-and-standards/all-codes-and-standards/list-of-codes-and-standards/detail?code=70

New York Solar Guidebook for Local Governments. NYSERDA. 2020. https://www.nyserda.ny.gov/solarguidebook

An Overview of Sound from Commercial Photovoltaic Facilities. RSG, Inc. NOISE-CON 2020. https://rsginc.com/wp-content/uploads/2021/04/Kaliski-et-al-2020-An-overview-of-sound-from-commercial-photovolteic-facilities.pdf

PA Solar Ordinances: Local Regulation and National Trends. Penn State Solar Law Symposium. 2021. https://aglaw.psu.edu/wp-content/uploads/2021/07/PSU-Solar-Law-Symposium-Day-2-session-5-Badissy.pdf

Top Five Large-Scale Solar Myths. National Renewable Energy Laboratory. 2016. https://www.nrel.gov/state-local-tribal/blog/posts/top-five-large-scale-solar-myths.html

Utility-Scale Solar Development. Penn State Extension webinar. June 2020. https://extension.psu.edu/utility-scale-solar-development

Utility-Scale Solar and Siting Considerations: Stormwater, Vegetation, Fencing, and Ag Use. Penn State Extension webinar. April 27, 2021. https://extension.psu.edu/utility-scale-solar-and-siting-considerations-stormwater-vegetation-fencing-and-ag-use

Glossary
Notes

“Penn State researchers recently analyzed all the 2,500+ zoning ordinances in Pennsylvania” (in Introduction)

Source: Comments for Joint Hearing of the Agriculture and Rural Affairs & Local Government Committees on “Utility Scale Solar Development & Local Government Ordinances.” Prof. M. Badissy, Dickinson Law, Penn State University. 2021. https://agriculture.pasenategop.com/wp-content/uploads/sites/26/2021/05/Prof-Badissy-Penn-State-Dickinson-Law-Testimony-re-Local-Solar-Ordinance-Research.pdf

 

Inverters are the noisiest equipment. (in Noise)

Source: Top Five Large-Scale Solar Myths. National Renewable Energy Laboratory, 2016. https://www.nrel.gov/state-local-tribal/blog/posts/top-five-large-scale-solar-myths.html

 

Inverter decibel value (in Noise)

Source: An Overview of Sound from Commercial Photovoltaic Facilities. Kaliski, K., I. Old, and E. Duncan. 2020. RSG, Inc. Presented at NOISE-CON 2020. https://rsginc.com/wp-content/uploads/2021/04/Kaliski-et-al-2020-An-overview-of-sound-from-commercial-photovolteic-facilities.pdf

 

Transformer decibel value (in Noise)

Source: NEMA Standards Publication TR 1-2013 (R2019). National Electrical Manufacturers Association, p. 4.

 

“Any noise for equipment on-site typically fades to background levels 50–150 feet from the site.” (in Noise)

Source: New York Solar Guidebook for Local Governments. NYSERDA. 2020. https://www.nyserda.ny.gov/solarguidebook

 

“The setback of panels typically ranges from 20 to 300 feet from the property line of neighboring actively used parcels.” (in Setbacks)

Source: PA Solar Ordinances: Local Regulation and National Trends. Mohamed Badissy, Penn State. Penn State Solar Law Symposium, June 17, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/07/PSU-Solar-Law-Symposium-Day-2-session-5-Badissy.pdf

 

“A maximum of 10–20 feet high for ground-mounted GSS is common.” (in Height Requirements)

Source: Local Law for Solar Project Development in Pennsylvania. Badissy, M. Feb. 17, 2022. Mercer County planners’ webinar. Penn State Extension.

 

Fire safety and first responder safety (in Fire Safety and First Responder Safety)

Source: Health and Safety Impacts of Solar Photovoltaics. 2017. North Carolina Clean Energy Technology Center. North Carolina State University. https://content.ces.ncsu.edu/health-and-safety-impacts-of-solar-photovoltaics

Renewable Energy Ordinance Framework, Solar PV Delaware Valley Regional Planning Commission. 2016. https://www.dvrpc.org/energyclimate/ModelOrdinance/solar/pdf/2016_DVRPC_Solar_REOF_Reformatted_Final.pdf

Disclaimer and Funding

By Thomas B. Murphy, Director, Penn State Marcellus Center for Outreach and Research, and Joy R. Drohan, Eco-Write, LLC.

Web design by Bernd J. Haupt. PDF design by Patricia Craig.

This material is based upon work supported by the United States Department of Energy, Office of Energy Efficiency and Renewable Energy, under State Energy Program Award Number DE‑EE0008293.

This material was prepared with support and funding of the Pennsylvania Department of Environmental Protection (DEP) and the US Department of Energy’s (DOE) State Energy Program. Any opinions, findings, conclusions, or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the DEP or DOE. This report was prepared as an account of work sponsored by an agency of the U.S. Government. Neither the U.S. Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the U.S. Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the U.S. Government or any agency thereof.

Additional support provided by the Penn State College of Agricultural Sciences, the Penn State Marcellus Center for Outreach and Research, and the Penn State College of Earth & Mineral Sciences.

Section 4: ENVIRONMENTAL IMPACTS OF GRID-SCALE SOLAR DEVELOPMENT

Goals of This Publication

Our primary goal with this guide is to explain the emerging grid-scale solar energy development trends occurring in the Commonwealth and what might be expected in the next few years. The guide is intended to inform municipal and county officials about grid-scale solar development so they can potentially add clear, regionally consistent language addressing the specific issues around grid-scale solar energy development to their zoning ordinances and other regulations.

A resources list at the end of this publication provides sources of further information. A glossary defines unfamiliar terms. A notes section provides sources for statistics and additional information. Over time as new information becomes available to further inform this discussion, it will be added to this guide, including information about new legislation affecting solar development and the evolution of new solar technologies.

BLANK
Introduction

As people see more grid-scale solar development (GSSD) pop up on the landscape, they may wonder if these installations have adverse effects on human or animal health. This section addresses baseline environmental assessment prior to construction, stormwater management, leaching of metals from panels, stray voltage concerns, radiation and electromagnetic fields, impacts to wildlife, and disposal or recycling of panels at the end of their useful life.

Grid-scale solar (GSS) arrays are a recent addition to the landscape, but photovoltaic technology and its potential environmental effects have been studied since the 1950s. There are many ways solar developers can minimize the impact of GSSD on the environment.

Looking down 2 long rows of large solar panels, with clover growing between the rows. Credit: Penn State MCOR

Credit: Penn State MCOR

Site Selection
In addition to the site selection criteria discussed in Section 1, solar developers prefer to avoid:

  • Floodplains and wetlands.
  • Corrosive or rocky soil.
  • Karst landscapes.
  • Sites likely to experience higher than average risk of tornadoes, snow loads, and wind.
  • Shading: A 50 percent drop in efficiency can occur with even 10 percent shading of an array.
  • An airport within 2 miles. If this can’t be avoided, the Federal Aviation Administration requires developers to conduct a glint and glare study (see Section 3).
  • A cell tower on the same property. Some cell tower agreements have language deterring solar development.
  • Crossing over a railroad easement.
  • Proximity to cemeteries, golf courses, or residential neighborhoods.
  • Properties in Pennsylvania’s Clean and Green program, a preferential tax assessment program through which
  • property taxes are based on use values rather than fair market values.

Planning recommendations:

  • Minimize placement of GSSD on agricultural land classified as “prime.”
  • Encourage the use of agrivoltaics—the farming of the ground underneath a solar array—especially on prime agricultural land.
Baseline Environmental Assessment

When a reputable solar developer identifies a site of interest for GSSD, they conduct site-specific environmental studies for:

  • Toxic and hazardous waste liability
  • Wildlife habitat
  • Threatened and endangered species
  • Wetland and waterway delineations
  • Cultural resources, to look for signs of important artifacts buried at the site
  • Viewshed, to inform design of site screening from nearby roads and neighboring residences
  • Sound assessment
  • Consultation with the U.S. Fish and Wildlife Service and state wildlife agency, to check for nonpublic information about the site

Planning recommendation:

  • Require most or all of the above site-specific studies to be conducted and reports submitted with permit application.
Best Management Practices (BMPs) for Construction and Operations

Reliable solar developers use BMPs for construction and operations to address site challenges:

  • Implement avoidance strategies and setbacks from sensitive and valuable habitat
  • Use previously disturbed land at each site as much as possible
  • Schedule construction outside of breeding season, if possible
  • Manage invasive plant species by applying appropriate control measures
  • Promptly and sustainably dispose of waste generated during construction to avoid attracting wildlife
  • Follow Avian Power Line Interaction Committee recommendations on power lines and electrical infrastructure as needed to protect raptors from collision and electrocution
  • Conduct wildlife and natural resources awareness training for staff and contractors on sensitive resources
  • Develop environmental management plans to document and track sustainability commitments and site-specific environmental data
  • Follow all commonly accepted biosecurity measures when working on or between farms hosting animal/livestock operations to reduce the spread of animal diseases or invasive pests

Planning recommendation:

Stormwater Management

The Pennsylvania Department of Environmental Protection (DEP) and county conservation districts are involved in reviewing a site design to manage stormwater, depending on site construction and layout. DEP requires a National Pollutant Discharge Elimination System (NPDES) permit for solar projects with earth disturbance greater than 1 acre.

Stormwater management should be improved on this portion of the site. Hay bales help to slow the flow of stormwater. Replanting grass would be most helpful. Credit: Penn State MCOR

Stormwater management should be improved on this portion of the site. Hay bales help to slow the flow of stormwater. Replanting grass would be most helpful.

Credit: Penn State MCOR

This access road has been planted with grass. Credit: Penn State MCOR

This access road has been planted with grass.

Credit: Penn State MCOR

Different governing bodies evaluate GSSD differently when it comes to stormwater management. Some governing bodies consider the panels to be impervious (impenetrable to water) and therefore require stormwater management for 100% of the water that hits the panels. This deters this development by raising costs. Other governing bodies, such as the U.S. Environmental Protection Agency (USEPA), have decided that solar panels are pervious, meaning that precipitation falling on them rolls off and soaks into the ground and does not leave the site. This requires a less complex and less expensive stormwater management plan. Other entities consider them to be 25% or 50% pervious, and everything in between. Municipalities may signal their relative openness to GSSD by how they rate solar panels’ imperviousness.

The treatment of the roads within a GSS array affects stormwater management because it figures in the percentage of the site that is impervious to precipitation. The main access road to a site is typically gravel, but the interior roads are typically seeded to grass. The interior roads are for mowing, repair, maintenance, and emergency access.

Existing federal, state, and local rules help guide GSSD to minimize impacts on surface and groundwater, and wetlands. Built stormwater management features such as berms, swales, and retention ponds help to minimize erosion and stormwater runoff.

County conservation districts approve earth-moving plans (erosion and sedimentation [E&S] plans). Projects are expected to use E&S best practices as needed. These include minimizing the extent and duration of earth disturbance, protecting existing drainages and vegetation, avoiding soil compaction, and preventing or minimizing increased stormwater runoff.

Other specifications that may need to be met include impervious surface coverage limits, which relate to E&S control and stormwater control, and landscaping requirements. Stormwater controls must be maintained for the life of the project.

Planning recommendations:

  • Require the submission of a complete stormwater management system design with permit application as applicable.
  • Consider several options to rate solar panel surface area as completely pervious, or not, depending on the municipality’s requirements for stormwater management planning and/or amount and type of vegetative cover under and around the panels if they are placed.
Leaching of Metals from the Panels and Integrity of the Panels

Solar panels typically consist of tempered glass, common plastics, copper, silver, and semiconductor materials that can be recovered and reused, and an aluminum frame. To protect photovoltaic (PV) cells in crystalline silicon–based panels from corrosion throughout their years of useful life, the cells are encased between two layers of plastic to keep out moisture. The top of the panel facing the sun is finished with tempered glass and the underside, facing the ground, with a plastic sheet. The material encapsulating the PV cells is the same material that’s used in car windshields to give them extra strength. So if a panel is damaged, it may crack but is unlikely to break into small pieces. A panel’s warrantied life depends on it remaining intact.

Solar panels used in GSS are either crystalline silicon or thin film. Crystalline silicon–based technology consists of silicon wafers that are made into cells and assembled into panels. Nontoxic silicon makes up more than 25% of the earth’s crust.

Crystalline silicon–based panels in a GSS array contain only very small quantities of a few other chemicals and metals. These are embedded into the tempered glass–encased array and do not have direct exposure to the external environment, and thus, are not subject to leaching. A tiny amount of lead (typically less than 0.5 ounce) is used in a crystalline silicon–based panel.

Thin-film panels consist of thin layers of the semiconductor cadmium telluride (CdTe) embedded on glass, polymer, or metal. As described above, solar panels are enclosed in a hard, tough case, so the metals inside them pose negligible toxicity risk to public health and safety. Most of the metal and other valuable materials in old or broken panels can be reused in future panels, so having a viable panel decommissioning plan and recycling program is helpful.

The USEPA uses the toxicity characteristic leaching procedure (TCLP) to determine whether, with breakage, contaminants from solar panels could leak at toxic levels to groundwater from landfills. USEPA has strict limits under the federal Resources Conservation and Recovery Act. Most or all solar panels being installed today pass this test, and manufacturers adhere to various performance and safety standards, including those of UL (Underwriters Laboratory). The panels are labeled nonhazardous waste and can be disposed of in landfills.

If there is continuing concern about leaching of heavy metals from GSS panels, baseline testing of soils where the panels will be installed can be done to determine the presence of any chemicals or metals of concern, and compared against future testing post-construction.

Some local building codes include specifications for wind speeds that all built structures, including ground-mounted solar arrays, must meet. Assessments of GSS facilities after Hurricane Sandy in 2012 and Hurricane Matthew in 2016 found only minor or no damage from wind or flooding.

Planning recommendations:

  • Require the solar developer to submit the results of the TCLP test for the panels they propose to install with the permit application.
  • Require that the GSSD meet local building code specifications for wind speed.
Schematic of the layers of a CdTe solar panel. Adapted from US DOE Solar Energy Technologies Office. https://www.energy.gov/eere/solar/cadmium-telluride

Schematic of the layers of a CdTe solar panel. Adapted from US DOE Solar Energy Technologies Office. https://www.energy.gov/eere/solar/cadmium-telluride

Radiation and Electromagnetic Fields

In modern life we are all exposed to electromagnetic fields (EMF) with no known health impact. EMF from solar arrays are “non-ionizing.” Non-ionizing radiation does not have enough energy to damage DNA. Non-ionizing fields come from computers, appliances, cell phones, and wireless routers.

EMF generated by solar arrays is similar to that generated by household appliances and quickly dissipates with distance, posing no health risk to neighbors. EMF levels at the perimeter fence of a solar array are less strong than those experienced when close to a television, refrigerator, or microwave. EMF from a solar array disappears at night when the system does not produce energy.

People with a pacemaker or other similar medical device sometimes wonder if the EMF from a solar array could affect device operation. Inverters produce the greatest EMF in a solar facility, and they are typically located near the center of the facility to reduce exposure to EMF and noise from their cooling fans. The level of EMF at the edge of a GSS array is well below recommended exposure limits and continues to decrease with distance from the array.

Planning recommendation:

  • Recommend placement of inverters, transformers, and electricity storage systems (batteries, etc.) near the center of the facility or away from residential areas.
Stray Voltage Concerns

Some neighbors raising livestock next to a proposed GSSD may express concerns about “stray voltage.” The U.S. Department of Agriculture defined “stray voltage” as “a small voltage (less than 10 volts) measured between two points that can be simultaneously contacted by an animal.” Some animals, especially cows and pigs, are more sensitive to stray voltage than people are. If they are subjected to continuous stray voltage, their eating and drinking behavior may be affected, thereby reducing production.

Some farmers have stated that underground power lines contribute to the problem, and underground power lines would be present at a GSSD. But studies show that stray voltage likely results from old and mismatched wiring and electrical equipment on the farm, rather than any interaction with a GSSD.

Because GSS facilities are in essence power plants, the equipment in a solar array is capable of producing deadly electric shock. But the substantial perimeter fencing and appropriate signage about the dangers, as required by the National Electric Code, should keep the public out of the facility.

Planning recommendation:

  • Require an 8-foot fence around the site perimeter, with signs as required by the National Electric Code warning of potential shock hazards.
Impacts to Wildlife

Threatened and Endangered Species

Reputable solar developers in Pennsylvania consult with the U.S. Fish and Wildlife Service and the Pennsylvania Department of Conservation and Natural Resources to determine whether endangered or threatened species may be present at the site. They identify potential impacts to threatened or endangered species during construction, operations, or maintenance, and work to lessen impacts. Most companies seek to avoid animal mortality and disruption or loss of breeding, wintering, and migration habitats. They aim to lessen impacts by using construction buffers around sensitive habitat when it can’t be avoided, especially during breeding and nesting season, and by setting aside funding to offset unavoidable impacts.

Birds

Some people think that GSSD kills birds. This stems from confusion with concentrated solar thermal development, which occurs almost exclusively in the Southwest. The 2020 New York Solar Guidebook for Local Governments concluded that there is “minimal impact” to birds from GSSD in New York, given a review by the National Renewable Energy Laboratory. Another U.S. Department of Energy summary of the impact of GSSD on birds stated that the impact “isn’t well understood” and is currently being studied.

Planning recommendations:

  • Require the submission of a habitat/threatened and endangered species study with permit application.
  • Require mitigation of habitat and wildlife impacts.
  • Require use of native plants for site vegetation and screening.
  • Specify minimum distance of panels and other site equipment from waterways or wetlands.
Red-tailed hawk perched on the edge of a solar panel. Credit: Deb Nystrom, Flickr, Licensed under CC BY 2.0

Credit: Deb Nystrom, Flickr, Licensed under CC BY 2.0

Disposal and/or Recycling of Solar Panels at the End of Their Useful Life

As noted above, both crystalline silicon– based and cadmium telluride (CdTe) thin-film panels are safe to dispose of in landfills. But reputable solar panel manufacturers plan for recycling and decommissioning of the panels they produce.

Solar panel recycling is still fairly new because there hasn’t yet been a great volume of panels that have reached the end of their useful life.

As more panels reach the end of their life, dedicated solar panel recycling facilities will be better able to maximize the efficiency of recycling.

In 2016 the US Solar Energy Industry Association (SEIA) started a national solar panel recycling program in cooperation with leading panel manufacturers. The goal is to make the industry landfill-free. The program aggregates the services offered by recycling vendors and panel manufacturers, making it easier to select a cost-effective and environmentally responsible end-of-life panel management solution.

Europe has a successful mandatory solar industry–funded program for panel recycling. It makes manufacturers responsible for end-of- life panel management.

The balance of a GSS system (non-panel components, including inverters and transformers) contains common and generally benign materials that would be found with other forms of electricity production.

In 2016–’17, a North Carolina assessment found the salvage value of solar array equipment to be greater than estimates of the cost to remove the entire system.

Because solar arrays can replace fossil-fuel- burning electricity generation, they help clean the air, reduce pollution-induced illnesses, and divert metals from the waste stream. Research from the U.S. Department of Energy’s National Renewable Energy Laboratory and the Lawrence Berkeley National Laboratory suggests that the benefits provided by the reduction in air pollution from solar energy are worth more than the electricity generated.

Recommendations for panel bonding and decommissioning are discussed in Section 6.

Conclusion

The negative health and safety impacts of GSSD have been shown to be negligible. Assuming deployment of new GSS technologies is commercially viable, there are added benefits of air pollution reduction and health improvements associated with solar facilities.

For More Information

Avian Power Line Interaction Committee. https://www.aplic.org/

Chapter 102 Permitting for Solar Panel Farms, Frequently Asked Questions (FAQ). PA Department of Environmental Protection. January 2, 2019, Revised, April 30, 2021, Version 1.1. https://files.dep.state.pa.us/Water/BPNPSM/StormwaterManagement/ConstructionStormwater/Solar_Panel_Farms_FAQ.pdf

On the Path to Sunshot: The Environmental and Public Health Benefits of Achieving High Penetrations of Solar Energy in the United States. 2016. Berkeley Lab, National Renewable Energy Laboratory. https://www.nrel.gov/docs/fy16osti/65628.pdf

Health and Safety Impacts of Solar Photovoltaics. 2017. North Carolina Clean Energy Technology Center. North Carolina State University. https://content.ces.ncsu.edu/health-and-safety-impacts-of-solar-photovoltaics

Low-Conflict Solar. Alyssa Edwards, Lightsource bp. Penn State Solar Law Symposium: Utility-Scale Solar Development for Lawyers, Landowners, and Others. June 17, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/06/PSU-Solar-Law-Symposium-Thurs-Alyssa-Edwards.pdf

Myths and Facts about Solar Energy. n.d. Center for Energy Education. https://center4ee.org/debunking-solar-myths/

New York Solar Guidebook for Local Governments. NYSERDA. 2020. https://www.nyserda.ny.gov/solarguidebook

NPDES Permit Basics. U.S. Environmental Protection Agency. n.d. https://www.epa.gov/npdes/npdes-permit-basics

Overview of Pennsylvania Utility-Scale Solar Development: Why Here, Why Now?, D. Brockett, Penn State Solar Law Symposium: Utility-Scale Solar Development for Lawyers, Landowners, and Others. June 15, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/06/PSU-Solar-Law-Symposium-Day-1-session-1-Dan-Brockett.pdf

Photovoltaic Stormwater Management Research and Testing. National Renewable Energy Laboratory. https://www.nrel.gov/solar/market-research-analysis/pv-smart.html

Renewable Energy Ordinance Framework. Solar PV Delaware Valley Regional Planning Commission. 2016. https://www.dvrpc.org/energyclimate/ModelOrdinance/solar/pdf/2016_DVRPC_Solar_REOF_Reformatted_Final.pdf

A Review of Avian Monitoring and Mitigation Information at Existing Utility Scale Solar Facilities. Environmental Science Division, Argonne National Laboratory. April 2015. https://doi.org/10.2172/1176921

SEIA National PV Recycling PrA Review of Avian Monitoring and Mitigation Information at Existing Utility Scale Solar Facilities. Environmental Science Division, Argonne National Laboratory. April 2015. https://www.seia.org/initiatives/seia-national-pv-recycling-program

Solar in PA: A Developer’s Perspective. Phillip Guerra, Forefront Power. Penn State Solar Law Symposium: Utility-Scale Solar Development for Lawyers, Landowners, and Others. June 17, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/06/PSU-Solar-Law-Symposium-Thurs-Guerra-Phillip.pdf

Solar Power and Birds. National Audubon Society. https://www.audubon.org/news/solar-power-and-birds

Top Five Large-Scale Solar Myths. 2016. National Renewable Energy Laboratory. https://www.nrel.gov/state-local-tribal/blog/posts/top-five-large-scale-solar-myths.html

Solar PV Delaware Valley Regional Planning Commission. 2016. https://www.dvrpc.org/energyclimate/ModelOrdinance/solar/pdf/2016_DVRPC_Solar_REOF_Reformatted_Final.pdf

Health and Safety Impacts of Solar Photovoltaics. 2017. North Carolina Clean Energy Technology Center. North Carolina State University.  https://content.ces.ncsu.edu/health-and-safety-impacts-of-solar-photovoltaics

Top Five Large-Scale Solar Myths. National Renewable Energy Laboratory. 2016. https://www.nrel.gov/state-local-tribal/blog/ posts/top-five-large-scale-solar-myths.html

Effects of Electrical Voltage/Current on Farm Animals: How to Detect and Remedy Problems. 1991. U.S. Department of Agriculture, Agriculture Handbook No. 696. https://naldc.nal.usda.gov/download/CAT92970513/PDF

Reinemann, D.J., Stray Voltage and Milk Quality: A Review, Veterinary Clinics of North America: Food Animal Practice, 28(2), 2012, 321-345. https://doi.org/10.1016/j.cvfa.2012.03.008

A Review of Avian Monitoring and Mitigation Information at Existing Utility Scale Solar Facilities. Environmental Science Division, Argonne National Laboratory. April 2015. https://doi.org/10.2172/1176921

Large-Scale Solar Siting. n.d. Solar Energy Technologies Office. U.S. Department of Energy. https://www.energy.gov/eere/solar/large-scale-solar-siting

Glossary
Notes

“A 50 percent drop in efficiency can occur with even 10 percent shading of an array.” (in Site Selection)

Source: Renewable Energy Ordinance Framework, Solar PV Delaware Valley Regional Planning Commission. 2016. https://www.dvrpc.org/energyclimate/ModelOrdinance/solar/pdf/2016_DVRPC_Solar_REOF_Reformatted_Final.pdf

 

Information on leaching of metals from the panels and integrity of the panels, radiation and electromagnetic fields, and disposal and/or recycling of solar panels (in Leaching of Metals from the Panels and Integrity of the Panels, Radiation and Electromagnetic Fields, and Disposal and/or Recycling of Solar Panels at the End of Their Useful Life)

Source: Health and Safety Impacts of Solar Photovoltaics. 2017. North Carolina Clean Energy Technology Center. North Carolina State University. https://content.ces.ncsu.edu/health-and-safety-impacts-of-solar-photovoltaics

 

“EMF generated by solar arrays is similar to that generated by household appliances and quickly dissipates with distance, posing no health risk to neighbors.” (in Radiation and Electromagnetic Fields)

Source: Top Five Large-Scale Solar Myths. National Renewable Energy Laboratory. 2016. https://www.nrel.gov/state-local-tribal/blog/posts/top-five-large-scale-solar-myths.html

 

USDA definition of stray voltage (in Stray Voltage Concerns)

Source: Effects of Electrical Voltage/Current on Farm Animals: How to Detect and Remedy Problems. 1991. U.S. Department of Agriculture, Agriculture Handbook No. 696. https://naldc.nal.usda.gov/download/CAT92970513/PDF

 

Stray voltage affects livestock eating and drinking behavior. (in Stray Voltage Concerns)

Source: Stray voltage and milk quality: a review. 2012. Veterinary Clinics: Food Animal Practice, 28(2), 321–345, as cited in Islam et al. 2020. Indonesian Journal of Electrical Engineering and Informatics. Impact of Stray Voltage on Renewable Energy-based Farm in Pacific Island Country. https://doi.org/10.52549/ijeei.v8i4.1531

 

“stray voltage likely results from old and mismatched wiring and electrical equipment on the farm” (in Stray Voltage Concerns)

Source: What is stray voltage and where does it come from? https://www.agrivolt.com/strayvoltage

 

Review of bird impacts from GSSD (Impacts to Wildlife—Birds)

Source: “A Review of Avian Monitoring and Mitigation Information at Existing Utility Scale Solar Facilities.” Environmental Science Division, Argonne National Laboratory, Apr. 2015, http://www.evs.anl.gov/downloads/ANL-EVS_15-2.pdf

 

GSSD impact to birds “isn’t well understood” (Impacts to Wildlife—Birds)

Source: Large-Scale Solar Siting. n.d. Solar Energy Technologies Office. U.S. Department of Energy. https://www.energy.gov/eere/solar/large-scale-solar-siting

 

First Solar recovery rates (in Disposal and/or Recycling of Solar Panels at the End of Their Useful Life)

Source: Responsible Solar. First Solar. https://www.firstsolar.com/About%20Us/Responsible%20Solar

Disclaimer and Funding

By Thomas B. Murphy, Director, Penn State Marcellus Center for Outreach and Research, and Joy R. Drohan, Eco-Write, LLC.

Web design by Bernd J. Haupt. PDF design by Patricia Craig.

This material is based upon work supported by the United States Department of Energy, Office of Energy Efficiency and Renewable Energy, under State Energy Program Award Number DE‑EE0008293.

This material was prepared with support and funding of the Pennsylvania Department of Environmental Protection (DEP) and the US Department of Energy’s (DOE) State Energy Program. Any opinions, findings, conclusions, or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the DEP or DOE. This report was prepared as an account of work sponsored by an agency of the U.S. Government. Neither the U.S. Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the U.S. Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the U.S. Government or any agency thereof.

Additional support provided by the Penn State College of Agricultural Sciences, the Penn State Marcellus Center for Outreach and Research, and the Penn State College of Earth & Mineral Sciences.

Section 5: LAND CONVERSION ISSUES WITH GRID-SCALE SOLAR DEVELOPMENT

Goals of This Publication

Our primary goal with this guide is to explain the emerging grid-scale solar energy development trends occurring in the Commonwealth and what might be expected in the next few years. The guide is intended to inform municipal and county officials about grid-scale solar development so they can potentially add clear, regionally consistent language addressing the specific issues around grid-scale solar energy development to their zoning ordinances and other regulations.

A resources list at the end of this publication provides sources of further information. A glossary defines unfamiliar terms. A notes section provides sources for statistics and additional information. Over time as new information becomes available to further inform this discussion, it will be added to this guide, including information about new legislation affecting solar development and the evolution of new solar technologies.

BLANK
Introduction

As energy transitions are occurring across the nation, the conversion of land, mainly in rural communities, to energy production, is increasing. With estimates of 80,000 acres of land surface being converted to solar energy production in the Commonwealth by 2030, impacts to the current use of land have risen to the forefront of most grid-scale solar discussions. Concerns focus mainly on the impact to prime farmlands but also include siting on forested and other lands.

Lands that are attractive for grid-scale solar development (GSSD) may expand. The federal Investment and Jobs Act of 2021 authorized the construction of new high-voltage power lines, which could open up more properties to this potential development.

Looking down 2 long rows of large solar panels, with clover growing between the rows. Credit: Penn State MCOR

Credit: Penn State MCOR

Loss of Farmland

In the Northeast and Mid-Atlantic, the amount of remaining farmland is limited, so governments tend to be protective of this resource. During the planning and permitting of new solar facilities, this may require extra regulatory steps and a plan for on-site agrivoltaics—the combination of GSSD with some limited agricultural activities, such as sheep grazing, beekeeping, growing vegetables, or other types of conventional ag production scaled to fit among the installed solar panels (see below).

Siting GSSD on farmland can be appealing for a few reasons:

  • With one contract the company can get access to a significant number of acres. Often, with larger planned GSSD projects, a number of contiguous properties must be leased to make the project commercially feasible.
  • The land is already cleared.
  • Taxes are lower in rural areas.

When comparing agriculture to GSSD, the margin of net profit per acre for agriculture will vary from highly productive ground to marginal ground, but solar is likely more profitable on all types of land on a per acre basis. However, if farming is a family’s livelihood, they also need to consider issues such as the next generation’s wishes for the farm and the land, the opportunities to and desire to farm in some fashion within the solar array, and community interests.

There are also secondary issues of allowing the transition of prime farmland for any other type of development, from housing to commercial warehouse construction, or in this case, GSSD. For example, agricultural support industries such as grain mills and feed stores could face challenging economics to stay in business and support area farmers if many acres in an area are filled with solar panels. So thoughtful consideration of all types of land transitions, including new energy development, is critical going forward.

Some argue that pausing farming for about 25 years allows the soil to rest and return in better condition at the end of the solar array’s life. In reality, this technology and its deployment is relatively new. And the time of its use on these lands is likely to be measured in decades. It is to be determined if the land will revert to agriculture or whether its terminal use will be for energy production with newer technology utilized there in the future.

September 1, 2021 - Farmer Brittany Staie (left) of Sprout City Farms, and farm manager at Jack's Solar Garden in Longmont, Colo., and farmer Kailey Littlehorn of Sprout City Farms, harvest beans, just one of the many types of produce which grows at Jack’s Solar Garden in Longmont, Colo. Jack’s is a 1.2-MW, five-acre community solar farm and is the largest agrivoltaic research project in the U.S. The solar project was designed and built by Namasté Solar. (Photo by Werner Slocum / NREL)
Jack’s Solar Garden, Longmont, Colorado, is a premier site demonstrating the farming of crops under a community solar array. https://www.jackssolargarden.com/

Credit: Photo by Werner Slocum, NREL 65581

Strategies to Reduce Farmland Loss

To reduce the loss of farmland, solar developers are using siting protocols to develop land more efficiently, which may include the use of bifacial panels to increase power yields, not leaving odd pieces of farmland undeveloped, and maximizing access to other parts of the site for continued farming.Various states have adopted preference and penalty programs to steer grid-scale solar (GSS) placement. Massachusetts and New Jersey offer positive incentives for development on preferred sites. Numerous states impose a tax penalty for converting land covered by preferential agricultural tax assessments to GSS. Some states provide incentives to owners of high-quality farmland to limit their ability to develop their land. New Jersey, Massachusetts, and Connecticut have processes that can stop or delay solar development on farmland. It should also be noted that these states have considerably less farmland available within their borders than Pennsylvania does, and the farmland they have is facing intense development pressures from other sectors as well, such as housing and industry. It is estimated that if built out as planned, there might 80,000 acres of GSS in Pennsylvania by 2030. The state is over 28 million acres in total land mass.

As of July 2022, the Pennsylvania General Assembly had not chosen to incentivize or disincentivize GSS projects on any type of land.

Municipalities may minimize future impediments to returning GSS land to farming by considering what their ordinance requires on the land. For example, a stormwater retention pond would require earth-moving, and the farmer is unlikely to get that land back to farming. Minimizing interior access roads is another way to ensure more of the solar site may be returned to some type of agricultural production in the future.​

Solar and Forest Land

When GSS is proposed for forest land, the trees are often of low value and the land is generally not as highly productive as open farmland. Private forest land has been broken into smaller and smaller parcels in the Mid-Atlantic over the last several centuries. These smaller parcels often lose their full ecological function as they decrease in size.

The Chesapeake Bay Foundation recommends that governments incentivize solar installations in appropriate locations through credits, regulatory relief, and/or faster application processing for preferred locations. They recommend providing no state incentives to locate GSS on forest lands of more than 20 acres. Some counties and municipalities are limiting forested acre transitions to less than 5 acres per project through language in local solar ordinances.

Use of Brownfields/Greyfields, Abandoned Mine Lands, and Other Reclaimed Sites as GSS Sites

There are numerous advocates for the placement of GSSD on brownfields, closed landfills, abandoned minelands, and other sites that have seen previous industrial use. This is happening to some extent, and can help preserve other open land, but solar developers typically prefer to build the most economically efficient projects. Brownfields and other previously developed sites often have or may have environmental pollution problems left over from the previous use of the site that must be addressed. One big limitation to the reuse of brownfield sites is they are often not close to high-voltage transmission lines and/or the needed electrical substations that provide access to the regional power grid.

Pennsylvania’s brownfield program offers liability protection for future landowners, which should encourage more brownfield development for GSSD.

This solar farm was built on top of a landfill located in Rehoboth, MA. The landfill had not been used for decades and now provides clean renewable energy to customers nearby. Credit: Lucas Faria, U.S. Department of Energy, https://www.energy.gov/eere/solar/large-scale-solar-siting

This solar farm was built on top of a landfill located in Rehoboth, MA. The landfill had not been used for decades and now provides clean renewable energy to customers nearby.

Credit: Lucas Faria, U.S. Department of Energy, https://www.energy.gov/eere/solar/large-scale-solar-siting

Abandoned coal processing plant, overgrown and unused. Shenandoah, Pennsylvania. Credit: Bill Dickinson, Flickr, Licensed under CC BY-NC-ND 2.0

Credit: Bill Dickinson, Flickr, Licensed under CC BY-NC-ND 2.0

Historic power production facilities already in place—for example, a coal plant that may be scheduled to come off-line—can be extremely valuable as solar production sites because of the existing connections to the power grid. The zoning for these sites would typically already allow for GSSD. Municipalities may be approached for GSSD at these sites. Unused power production facilities on the site would likely be demolished. The existing grid connections would be revamped because the amount of power stemming from solar is different from that from coal.

The U.S. Environmental Protection Agency’s (EPA) RE-Powering America’s Land initiative encourages renewable energy development on brownfields when this development is consistent with the community’s vision for the site. USEPA and the U.S. Department of Energy’s National Renewable Energy Laboratory have also developed guidance on how to best redevelop municipal landfills for GSSD.

A greyfield site is underused land, often in an industrial area. It may also host formerly viable commercial land use such as a shuttered or unused mall and its parking lots. Greyfields have the advantages that they do not include legacy environmental pollution problems and they are often less expensive to develop than rural areas because they are already served by utilities.

It could be ideal to funnel GSSD to brownfields and greyfields locations when they exist near electrical transmission infrastructure. However, legacy pollution or its potential, especially on brownfield sites, can raise the development cost and uncertainty for these sites. Reclaimed mineland may have drainage issues, and rooftop development involves expensive engineering. Municipalities can encourage or discourage use of different types of land for GSSD with their zoning ordinance.

Agrivoltaics as a Means of Preserving Farm Functionality and Diversifying Income

It is increasingly common that the ground underneath a solar array is planted in seed mixes of native grasses and legumes, or in other cases, with pollinator-friendly flowering plants. The vegetation still might need to be mowed several times per year because some of these plants get tall enough to block light to the panels. The lease should address how this regular maintenance will be done and the project must be planned to allow for this. Companies typically pay $300–$500 per acre per year (in 2022) for mowing, sometimes to the landowner, if this is agreed in the terms in the solar lease controlling the GSS project. Paying the landowner to mow or graze the site can make the deal more palatable to landowners and the community.

Grazing

Similar payments may be made to a shepherd for their sheep to graze a site. (Horses and cows are big enough to potentially damage the solar panels, and goats may eat the panel wiring, so sheep are preferred). Many sites will be mowed because there aren’t enough sheep to graze all the sites.

Research at Cornell University found in 2018 that labor hours needed for site vegetation management were 2.5 times less with sheep grazing than with mechanical and pesticide management. Tampa Electric reported that sheep grazing reduced their vegetation maintenance costs by 75% over traditional mowing at its GSS sites, although cost savings estimates closer to 20–40% may be more common.

Agrivoltaics is relatively new, and possibilities and accommodations are still being worked out. Farmers in England have raised poultry under solar panels. The panels must be high enough that the poultry don’t roost on the panels and potentially foul them. Some farmers are proposing manure injection on land between the solar panels. Grazing GSS lands with sheep may also increase carbon storage in the soil over time.

The American Solar Grazing Association is a producer-owned business cooperative with about 450 members that assists its farmer members in techniques and skills when negotiating contracts with solar companies. In some cases, they organize the sharing of transportation equipment to move livestock. The organization is interested in cooperatively marketing lambs and wool produced from solar-grazing flocks. Currently, more than 50% of the lamb and mutton consumed in the U.S. is imported from New Zealand and Australia, so expanding market opportunities for local lamb and wool would benefit both area farmers and the local economies where this additional solar grazing may occur.

The American Solar Grazing Association, in partnership with Ernst Conservation Seeds & Pollinator Service in northwestern Pennsylvania, developed a seed mix called Fuzz & Buzz specially designed for solar grazing and to support a diverse range of pollinators. The plant mix grows to 2–3 feet high, so it doesn’t shade the panels, and has been optimized for palatability to sheep.

Sheep take a break from munching on vegetation at the Nittany 1 solar array in Pennsylvania. Credit: Penn State MCOR

Sheep take a break from munching on vegetation at the Nittany 1 solar array in Pennsylvania.

Credit: Penn State MCOR

Benefits of Agrivoltaics

The establishment of grazing or native pollinator habitat on solar farms allows both GSSD and agricultural land use to coexist.

Agrivoltaics can provide various benefits:

  • Use native vegetation for soil and water protection, decreasing erosion.
  • Increase farm viability, helping farm family financial security for about 25 years, diversifying farmer income and preserving the rest of the land.
  • Possibly increase future fertility of soil.

Challenges with Agrivoltaics

  • Requirements and recommendations are still being fine-tuned through research and trial and error. Several states, including Massachusetts, have proposed or passed legislation requiring pollinator habitat or agrivoltaics with GSSD.
  • The cost of native seed mixes is higher than traditional revegetation seed mixes.
  • Seedling establishment takes a few years, and during this time competitive grasses and weeds must be kept at bay.
  • Stormwater management permit requirements can be difficult to achieve until the plants are fully established.
  • Zoning requirements restricting vegetation height may need to be revamped. Shepherds want the grass to grow to about 18 inches high before bringing in sheep.

Agrivoltaics Best Practices

These are some best practices for agrivoltaics:

  • Plant short, low-maintenance, native seed mix underneath and around the panels.
  • Use a diverse pollinator seed mix between panel rows.
  • Plant site buffers with pollinator-friendly vegetation.
  • Plant native shrubs along the property boundary if compatible with other screening vegetation.
  • Strive for a diversity of native flowers that bloom throughout the growing season, as well as native grasses.
  • If possible, use underutilized areas of the farm, such as sloping pasture or support land.
  • Many solar developers try to work with the landowner if they’re interested in working the site through beekeeping or grazing.

Pollinator Habitat

Pollinator species when managed correctly will eventually suppress weeds, requiring less herbicide. Their deep root systems help reduce erosion. But for the first few years until the plants are established and out-competing grasses and weeds, the vegetation may need more maintenance.

With typical grass below panels, solar arrays are often mowed every 4–6 weeks in the growing season, when the grass gets close to the panels. This is an inefficient system because it’s a regular expense throughout the ~25-year life of the project. If specially chosen pollinator-friendly plants are planted under panels instead, they grow to only 2–3 feet high, which is below the panels, and mowing can happen just once or twice a year.

Operators of pollinator-planted solar arrays typically work with local conservation groups, seed growers, and consultants to choose and buy seed tailored to and local to the site, and to oversee the vegetation.

Research conducted on pollinator habitat under solar panels in Minnesota found:

  • Three times more beneficial plant species than on traditionally managed GSS arrays.
  • Four times more pollinating insects.

Additional benefits may also accumulate. Encouraging pollinators and other beneficial insects might help increase local agricultural yields. Higher energy output may result from a solar array planted in pollinator habitat because the plants keep the ground cooler and solar panels operate more efficiently when they are cooler.

At least fifteen states have guidelines for pollinator seed mixes and management practices. Maryland and Minnesota have developed pollinator-friendly solar certification programs.

Before proposing a pollinator project, it’s important to consider what pesticides have been used on the land in the past because some can linger in the soil and kill seeds.

A beekeeper dressed in protective gear tends beehives in front of a field of long rows of solar panels. Credit: Photo by Dennis Schroeder, NREL 52948.

Credit: Photo by Dennis Schroeder, NREL 52948.

Crops

Growing crops under solar panels is not yet common and is done mostly at research sites. One commercial solar crop site operates in Colorado; other sites are in the planning phase. There is considerable research in both the U.S. and Europe to find new options for diverse forms of agriculture to be commercialized under solar panels. Crops in GSS arrays benefit from a mix of sun and shade, and cooler temperatures in summer and during the day and warmer temperatures in winter and at night. These minor differences basically balance out to produce little difference in crop growth rates, but the environment can be more comfortable for farmworkers. The growing season may be extended and water needs may be less.

Some crops that have done well in the GSS setting include lettuces, tomatoes, peppers, chard, kale, broccoli, and brussels sprouts. But this is likely only commercially viable in smaller acreage settings.

The panels might be raised higher (to ~7–10 feet) to give the option of growing vegetable crops underneath them. But if the panels stand higher, they become more obvious, so a higher fence might be needed and the viewshed of the project will increase. Higher panels may be subject to higher wind speeds, requiring longer support posts, which may be more expensive. There may also be ordinance language with maximum height limits.

Jack’s Solar Garden, Longmont, Colorado, is a premier site demonstrating the farming of crops under a community solar array. https://www.jackssolargarden.com/ Credit: Photo by Werner Slocum, NREL 65563

Jack’s Solar Garden, Longmont, Colorado, is a premier site demonstrating the farming of crops under a community solar array. https://www.jackssolargarden.com/

Credit: Photo by Werner Slocum, NREL 65563

GSSD on Preserved Farmland

Pennsylvania’s Clean and Green Program provides preferential tax treatment for enrolled agricultural lands. GSSD may not occur on enrolled lands. Landowners can withdraw from the program if they want to host a solar array, but rollback taxes and a penalty are due for the period of enrollment in the program. Typically, the developer would pay those taxes and the penalty. Broadly, an amendment to the Clean and Green Program permits solar development as long as 50% or more of the energy produced is used on the property, but that would not apply for GSSD.

In the interest of farmland preservation, the Pennsylvania Department of Agriculture oversees the state’s Agricultural Security Areas (ASA) and Conservation Easement Purchase programs. If land is enrolled in a qualifying ASA, state or local governments can purchase conservation easements from the farmer. These exist in perpetuity and prevent the landowner from allowing GSSD on the land.

There are currently no restrictions or limitations related to GSSD on a property that is simply enrolled in an ASA. However, the property may be removed from the ASA when the township does a 7-year review if it no longer meets the evaluation criteria in the ASA. There is no penalty for changing use or removing property.

For land under conservation easement purchased with federal, state, or local money or any combination thereof in Pennsylvania, GSSD is not currently permitted.

It’s an open question whether GSSD would be allowed on land under conservation easement from a private land trust. Some land trusts have struggled to draft easement language to allow responsible siting of GSSD, because the conversion to GSSD normally does not adhere to the mission of the land trust.

Black-eyed Susans grow beneath solar panels. Credit: Photo by Dennis Schroeder, NREL 53020

Credit: Photo by Dennis Schroeder, NREL 53020

Conclusion

Farmland is an attractive option for GSSD, but local and county governments can incentivize or restrict placement of development through local ordinances. Brownfields, greyfields, abandoned mine lands, and other reclaimed sites can be economical to develop for this use if there is transmission infrastructure close by. Agrivoltaics—grazing or encouraging pollinator habitat or possibly growing vegetables under solar panels—can allow for economic and environmental benefits to developers, farmers, neighbors, and ecosystems. Farmland enrolled in Pennsylvania’s Clean and Green Program cannot be developed for GSSD without the rollback taxes and penalties being paid. Land under a publicly funded conservation easement cannot be developed for GSSD. It remains unclear whether lands under private conservation easement can be developed in this way.

For More Information

The Agricultural, Economic, and Environmental Potential of Co-locating Utility Scale Solar with Grazing Sheep. 2018. David R. Atkinson Center for a Sustainable Future, Cornell University. https://cpb-us-e1.wpmucdn.com/blogs.cornell.edu/dist/f/6685/files/2015/09/Atkinson-Center-report-2018_Final-22l3c5n.pdf

Agrivoltaics Provide Food, Power and Money: A Triple Win. 2021. https://www.engineering.com/story/agrivoltaics-provide-food-power-and-money-a-triple-win

Agrivoltaics Scores Impressive Triple Win, But Some Food Safety Concerns Remain. 2021. Food Safety News. https://www.foodsafetynews.com/2021/03/agrivoltaics-scores-impressive-triple-win-but-some-food-safety-concerns-remain/

American Solar Grazing Association. https://solargrazing.org/

Anatomy of a Utility-Scale Solar Leasing Relationship. Brook Duer. Penn State Solar Law Symposium: Utility-Scale Solar Development for Lawyers, Landowners, and Others. June 15, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/06/PSU-Solar-Law-Symposium-Day-1-Session-2-Brook-Duer.pdf

Approaches to Balancing Solar Expansion and Farmland Preservation: A Comparison across Selected States. 2018. T. Grout and J. Ifft, EB 2018-04. Charles H. Dyson School of Applied Economics and Management, Cornell University. https://dyson.cornell.edu/wp-content/uploads/sites/5/2019/02/Cornell-Dyson-eb1804.pdf

Best Practices for Siting Solar Photovoltaics on Municipal Solid Waste Landfills. 2013. National Renewable Energy Laboratory and U.S. Environmental Protection Agency. https://www.nrel.gov/docs/fy13osti/52615.pdf

Dual-Use: Crop and Livestock Considerations. 2018. University of Massachusetts, Amherst. https://ag.umass.edu/clean-energy/fact-sheets/dual-use-crop-livestock-considerations

Ernst Conservation Seeds, Ernst Pollinator Service and American Solar Grazing Association Partner on Pollinator-Friendly Fuzz & Buzz Seed Mix for Solar Arrays. 2020. https://www.ernstseed.com/ernst-conservation-seeds-ernst-pollinator-service-american-solar-grazing-association-partner-pollinator-friendly-fuzz-buzz-seed-mix-solar-arrays/

ERI, GPI release new resources to facilitate Indiana solar and wind development. Environmental Resilience Institute, Indiana University, and Great Plains Institute. 2020. https://eri.iu.edu/news-and-events/_news/archive/2020/20201221-eri-gpi-release-model-solar-ordinance-renewable-energy-guide.html

Farmer’s Guide to Going Solar. n.d. Solar Energy Technologies Office, U.S. Department of Energy. https://www.energy.gov/eere/solar/farmers-guide-going-solar

Growing Plants—And Providing Solar Energy. Science Friday. 2022. https://www.sciencefriday.com/segments/growing-plants-and-providing-solar-energy/

Large-Scale Solar Siting. n.d. Solar Energy Technologies Office. U.S. Department of Energy. https://www.energy.gov/eere/solar/large-scale-solar-siting

Low-Impact Solar Development Strategies Guidebook. Open EI, NREL https://openei.org/wiki/InSPIRE/Guidebook

Planning & Zoning for Solar Energy Systems: A Guide for Michigan Local Governments. Michigan State University. https://www.canr.msu.edu/resources/planning-zoning-for-solar-energy-systems-a-guide-for-michigan-local-governments

Principles and Practices for Realizing the Necessity and Promise of Solar Power. 2020. Chesapeake Bay Foundation. https://www.cbf.org/document-library/cbf-guides-fact-sheets/principles-and-practices-for-solar-power.pdf

RE-Powering America’s Land. U.S. Environmental Protection Agency. https://www.epa.gov/re-powering

Siting Solar in Virginia: Protecting Virginia’s Historic Landscapes While Meeting State’s Clean Energy Goals. 2020. American Battlefields Trust. https://www.battlefields.org/preserve/solar/siting-solar-virginia

Utility Dive Does a Deep Dive on Solar Grazing. 2020. American Solar Grazing Association. https://solargrazing.org/utility-dive-does-a-deep-dive-on-solar-grazing/

Utility Scale Solar: Land Use, Policy, and Emerging Ordinances, An Interactive Q and A Webinar. Penn State Extension. September 23, 2020. https://psu.mediaspace.kaltura.com/media/1_1j2si5jk

Glossary
Notes

“The margin of net profit per acre will vary from highly productive ground to marginal ground, but solar is likely more profitable on all types of land on a per acre basis.” (in Loss of Farmland)

Source: Overview of Pennsylvania Utility-Scale Solar Development: Why Here, Why Now? D. Brockett. Penn State Solar Law Symposium: Utility-Scale Solar Development for Lawyers, Landowners and Others. June 15, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/06/PSU-Solar-Law-Symposium-Day-1-session-1-Dan-Brockett.pdf

 

“Companies typically pay $300–$500 per acre per year (in 2022) for mowing” and similar payments for grazing. (in Agrivoltaics as a Means of Preserving Farm Functionality and Diversifying Income)

Source: Solar Development in Rural Pennsylvania. D. Brockett, testimony. Center for Rural Pennsylvania. October 1, 2021.

 

“Research at Cornell University found…” (in Agrivoltaics as a Means of Preserving Farm Functionality and Diversifying Income—Grazing)

Source: The Agricultural, Economic, and Environmental Potential of Co-locating Utility Scale Solar with Grazing Sheep. 2018. David R. Atkinson Center for a Sustainable Future, Cornell University. https://cpb-us-e1.wpmucdn.com/blogs.cornell.edu/dist/f/6685/files/2015/09/Atkinson-Center-report-2018_Final-22l3c5n.pdf

 

“Tampa Electric reported…” (in Agrivoltaics as a Means of Preserving Farm Functionality and Diversifying Income—Grazing)

Source: Utility Dive Does a Deep Dive on Solar Grazing. 2020. American Solar Grazing Association. https://solargrazing.org/utility-dive-does-a-deep-dive-on-solar-grazing/

 

The American Solar Grazing Association “is interested in cooperatively marketing lambs and wool produced from solar-grazing flocks.” (in Agrivoltaics as a Means of Preserving Farm Functionality and Diversifying Income—Grazing)

Source: Electric Sheep: Grazing in Arrays Supports Economy, Climate. Cornell Chronicle. https://news.cornell.edu/stories/2021/10/electric-sheep-grazing-arrays-supports-economy-climate

 

Agrivoltaics best practices (in text box)

Source: New York Solar Guidebook for Local Governments. 2020. https://www.nyserda.ny.gov/solarguidebook , p. 179.

 

“Research conducted on pollinator habitat under solar panels in Minnesota found…” (in Agrivoltaics as a Means of Preserving Farm Functionality and Diversifying Income—Pollinator Habitat)

Source: Large-Scale Solar Siting. Solar Energy Technologies Office. U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. https://www.energy.gov/eere/solar/large-scale-solar-siting

 

“minor differences basically balance out” (in Agrivoltaics as a Means of Preserving Farm Functionality and Diversifying Income—Crops)

Farmer’s Guide to Going Solar. n.d. Solar Energy Technologies Office, U.S. Department of Energy. https://www.energy.gov/eere/solar/farmers-guide-going-solar

Disclaimer and Funding

By Thomas B. Murphy, Director, Penn State Marcellus Center for Outreach and Research, and Joy R. Drohan, Eco-Write, LLC.

Web design by Bernd J. Haupt. PDF design by Patricia Craig.

This material is based upon work supported by the United States Department of Energy, Office of Energy Efficiency and Renewable Energy, under State Energy Program Award Number DE‑EE0008293.

This material was prepared with support and funding of the Pennsylvania Department of Environmental Protection (DEP) and the US Department of Energy’s (DOE) State Energy Program. Any opinions, findings, conclusions, or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the DEP or DOE. This report was prepared as an account of work sponsored by an agency of the U.S. Government. Neither the U.S. Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the U.S. Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the U.S. Government or any agency thereof.

Additional support provided by the Penn State College of Agricultural Sciences, the Penn State Marcellus Center for Outreach and Research, and the Penn State College of Earth & Mineral Sciences.

Section 6: Localized Economic Impacts of Grid-Scale Solar Development

Goals of This Publication

Our primary goal with this guide is to explain the emerging grid-scale solar energy development trends occurring in the Commonwealth and what might be expected in the next few years. The guide is intended to inform municipal and county officials about grid-scale solar development so they can potentially add clear, regionally consistent language addressing the specific issues around grid-scale solar energy development to their zoning ordinances and other regulations.

A resources list at the end of this publication provides sources of further information. A glossary defines unfamiliar terms. A notes section provides sources for statistics and additional information. Over time as new information becomes available to further inform this discussion, it will be added to this guide, including information about new legislation affecting solar development and the evolution of new solar technologies.

BLANK
Introduction
Every energy source has both positive and negative impacts. We need to understand them so we can make informed decisions. Communities typically host grid-scale solar developments (GSSD) for economic reasons. People’s views about GSSD may be influenced by whether the community sees GSSD being foisted on them, or if they see it as an economic development opportunity.
Impacts to Property Value

There is currently a lack of decisive unbiased research on whether the presence of grid-scale solar (GSS) affects nearby property values. Studies funded by solar developers tend to find little or no impact. A study from the University of Rhode Island in 2020 found house prices reduced by an average of 1.7% ($5,751) within one mile of a GSS array in Massachusetts or Rhode Island. Within one-tenth of a mile, the reduction was 7%. The greatest losses were seen when GSS replaced farm or forest land. This research suggests the value of placing GSSD away from residential properties, where possible.

GSS developers are now commonly taking into consideration the distance to potential residential housing, if possible. In other cases, the use of vegetative screening and fencing to buffer the view of the facilities from neighboring properties or a public roadway has become an industrywide best management practice and a common goal of most township and county solar ordinances dealing with viewshed impacts.

Aerial view of solar panels, road, and crop fields. Credit: Andreas Gucklhorn, Unsplash, https://unsplash.com/photos/Ilpf2eUPpUE

Credit: Andreas Gucklhorn, Unsplash, https://unsplash.com/photos/Ilpf2eUPpUE

Land Lease Revenues for Property Owners

GSS lease income is expected to be a significant economic impact, with total payments potentially exceeding $80 million per year spread among landowners in about 54 Pennsylvania counties. Lease rates in October 2021 were typically between $1,000 and $1,200 per acre per year but can range between $800 and $2,000 per acre per year, depending on a number of factors, including proximity to existing electrical infrastructure, contracted downstream power sales, and size of project. Most lease offers include a rent escalator, which is an annual increase in rent, typically between 1.5 and 2.5%.

The lease price per acre is likely to be greater than what farmers could earn growing common crops, especially if lower productivity lands are converted to GSS. A lease provides a stable source of diversified income to the landowner, giving some insurance against difficult weather years and other difficulties that can come with farming. It is not uncommon to hear of farmers considering this new income stream as a way to help fund a secure retirement.

The lease for GSSD affects heirs and any subsequent owners of the land for the lease period. The lease and its payments pass to the land’s next owners. The terms of the lease can affect the future property value because the right to construct a solar facility or the actual solar equipment, if installed, will carry forward for the life of the lease. A potential buyer may or may not see the same value in the solar facility being on the land as the selling landowner.

With Midwest wind energy development, research showed that many landowners used the lease payments to invest in other areas of their farm and improve its overall productivity. So GSS might bring about greater farm efficiency for the acres remaining in agriculture. This pattern was also seen in areas where farm owners leased land for shale energy production. So we might expect that landowners hosting GSSD could use this new income stream to follow a similar pattern.

Other landowners might invest in the community with their supplemental earnings from a GSS lease, producing a feedback effect that results in greater capital availability for the community. This outcome is the ideal, where investment in GSS is mutually beneficial for the broader community. Pending research at Penn State University is going to explore this potential outcome in greater detail in early 2023.

A solar array with a windmill in the background and snow covering the ground. Credit: Pexels, CC0

Credit: Pexels, CC0

In a 2022 University of Michigan study, researchers are interviewing Midwest GSS leaseholders to learn about the effects of the lease payments on their lives and farming operations. Initial interviews have found that some farmers are using GSS leasing as a farm diversification strategy, choosing to lease less productive land to a solar developer and using lease revenue on it to reinvest in their farming operation. However, interviews and preliminary results also indicate that solar developers are purchasing, rather than leasing, land much more than expected: over one-third of the land in these Midwestern solar developments is now owned by a solar developer, and many farmers with solar leases have indicated that the solar developer first offered to buy the land, rather than lease it. Preliminary results also show that nonresident leaseholders (i.e., those living out of county or even out of state) are more numerous. Of all of the acreage in these midwestern GSSDs, roughly 40% are held by an in-county taxpayer, 20% are held by an in-state but out-of-county taxpayer, and nearly 40% are held by an out-of-state taxpayer. Furthermore, there are many fewer individual leaseholders than expected, even for very large projects. If the final findings confirm these trends, the positive impacts of GSSD to rural economies could be different than some communities are anticipating in the near- and long-term. Nonresident leaseholders tend to spend the proceeds from the lease payments in locations other than where GSSD is being constructed and operated.

Land purchase offers for GSSD are more difficult to track because there have been very few in Pennsylvania, but those Penn State Extension is aware of have sold above local fair market value due to the increased potential as an energy production location. We’re starting to see increased activity in purchase offers for potential landholdings to site GSSD in neighboring states.

Effects of GSSD on Regional/State Economics

Many unknowns remain about the economic effects of GSSD. We don’t yet have sufficient data to know what happens to surrounding farms and farm-based businesses if, for example, 2,000 acres are taken out of production in an area. This is an issue that is becoming more common in the dialogue between municipalities and nearby farmers as GSSD facilities are proposed.

It is unknown in Pennsylvania how GSS affects nearby farmland lease rates, but logically if a landowner can make several times as much from a GSS lease as from a farming lease, we would expect ag lease rates to go up nearby. The biggest challenge in this situation will most likely rest with the farmers who depend on leased land, because they’ll have to pay more or it won’t be accessible. They won’t get any direct benefit from the new solar development, but they have an associated increase in indirect crop production costs.

Some governing bodies may decide to establish an overlay zoning district encompassing land within, say, 3 miles of an electrical substation, because these areas are most attractive to solar developers given the lower cost to hook into the electricity distribution grid if capacity to do so is available at those locations. An overlay district may have unique development requirements given the needs of the proposed land use and the lands in the district.

Sun over a corn field. Credit: Jake Gard, Unsplash, https://unsplash.com/photos/CetB-bTDBtY

Credit: Jake Gard, Unsplash, https://unsplash.com/photos/CetB-bTDBtY

Estimated breakdown of construction costs/MW for a 20 MW project and for 9.9 GW statewide. Credit: Robert Young, PA DEP

Estimated breakdown of construction costs/MW for a 20 MW project and for 9.9 GW statewide.

Credit: Robert Young, PA DEP

GSS companies often make philanthropic commitments to local organizations where they’re building or operating a site. They may also invest in habitat conservation projects in the area as part of their corporate sustainability commitment or the power purchase agreement for the site, or to encourage local buy-in to the development.

Construction of GSS facilities will have a local economic impact, but it will likely be short-lived and associated with the construction and installation process, because panels are generally manufactured elsewhere.

The Economics Behind GSSD
Several economic and regulatory factors influence the costs and benefits of GSSD.

Power Purchase Agreements

A 10-megawatt (MW) solar array is capable of producing 10 MW of electricity per hour to the grid, assuming the sun is shining. This facility might actually average 2–5 megawatt-hours (MWh) per day for 365 days per year. PJM Interconnect, LLC, the regional electric grid operator in Pennsylvania, much of the Mid-Atlantic, and parts of Midwest, paid roughly $18–20/MW in May 2021. This is the wholesale power price (also called the spot price).

Negotiating a power purchase agreement (PPA) is a necessary step in the development of a GSSD. Through a PPA, a GSS developer consents to build a solar array if the electricity buyer agrees to purchase the electricity produced there. This is a long-term agreement, typically 10–25 years, with most PPAs averaging 20 years. The agreement may include a price ceiling and/or floor, or there may be a set price. Toward the end of the contract, the purchaser may be able to extend the agreement. A PPA could have a lot of variability depending on the needs and wants of the developer, financer, broker, and end user.

The Alternative Energy Portfolio Standard

Pennsylvania’s alternative energy portfolio standard (AEPS) requires the grid operator to produce a certain percentage of total electricity from renewable energy sources. The AEPS is the benchmark regulated utilities in Pennsylvania have to meet. The AEPS currently says that 0.5% of a grid operator’s total in-state energy production must come from solar. This is referred to as a “solar carve-out.” The state’s AEPS sunset at 0.5% in 2021. Bills that would raise this percentage to between 5.5 and 10% have been introduced in the state legislature. If one of these bills should pass, that would significantly expand the demand for solar energy production.

Part of a high-voltage electricity transmission tower. Credit: Art Wall, KIttenprint, Unsplash, https://unsplash.com/photos/m5nbvV8sXO0

Credit: Art Wall, KIttenprint, Unsplash, https://unsplash.com/photos/m5nbvV8sXO0

Solar Renewable Energy Credits

Solar renewable energy credits (SRECs) are a market instrument that utilities and electricity suppliers use to measure compliance with Pennsylvania’s AEPS. Corporations and institutions also use SRECs to increase their support for alternative energy. One SREC equals 1 MWh of solar energy generated from a qualifying facility. SRECs must be generated in Pennsylvania to count for compliance.

Developers and brokers can sell SRECs to utilities and electricity suppliers through the state SREC program. For example, an electricity supplier with no solar production capacity would buy SRECs to amount to 0.5% of their total annual energy production or pay a compliance premium for not meeting Pennsylvania’s AEPS.

Several mainly Mid-Atlantic and Midwest states have a system for SRECs. The price is driven by supply and demand. If the market is short (there’s more demand than supply), prices will rise. If the market is long, prices will fall. In Pennsylvania, SRECs have a useful life of 3 years. An SREC in PA has cost $25–$45 per credit over the past 3 years.

State SREC price
$/MWh (in June 2022)
Maryland 59
Massachusetts 292
New Jersey 235
Ohio 5.75
Pennsylvania 41
Washington, D.C. 380–435

Solar Renewable Energy Credits

Solar renewable energy credits (SRECs) are a market instrument that utilities and electricity suppliers use to measure compliance with Pennsylvania’s AEPS. Corporations and institutions also use SRECs to increase their support for alternative energy. One SREC equals 1 MWh of solar energy generated from a qualifying facility. SRECs must be generated in Pennsylvania to count for compliance.

Developers and brokers can sell SRECs to utilities and electricity suppliers through the state SREC program. For example, an electricity supplier with no solar production capacity would buy SRECs to amount to 0.5% of their total annual energy production or pay a compliance premium for not meeting Pennsylvania’s AEPS.

Several mainly Mid-Atlantic and Midwest states have a system for SRECs. The price is driven by supply and demand. If the market is short (there’s more demand than supply), prices will rise. If the market is long, prices will fall. In Pennsylvania, SRECs have a useful life of 3 years. An SREC in PA has cost $25–$45 per credit over the past 3 years.

Based on these rates, a GSS operator would be eager to sell SRECs into the Washington, D.C., market and get $380 or more per SREC. There are limits in some states as to whether the SREC has to be from power produced in-state or if it can come from an out-of-state generator.  

GSS developers make money from the sale of electricity and from the sale of SRECs that allow other entities to meet environmental requirements for supporting green power.

Pennsylvania is the number one net electricity exporter in the United States, primarily to New York and New Jersey.

Public Tax Subsidies
GSSD benefits the local community by creating jobs, diversifying energy options, increasing the tax base, and providing supplemental income for landowners.

Governments can encourage or discourage different kinds of economic development, including different kinds of energy infrastructure, through various policies and regulations. Different government policymakers may not align on which kinds of investment should be encouraged. In general, policymakers want to find the sweet spot where taxes on a new venture aren’t prohibitive to new investment, but aren’t so low that there’s nothing in it for the community. This dynamic is at play in GSSD.

There are numerous kinds of tax-based incentives for solar development that drive the appeal for GSSD developers.

Solar Investment Tax Credit

The federal investment tax credit (ITC) has been an important factor in the growth of solar energy throughout the country. This is a tax credit available to energy project installers, developers, or financers who install designated renewable energy generation equipment (see Section 48 of the Internal Revenue Code of 2006 (as amended)). As currently written (June 2022), these groups can apply a percentage of the project’s engineering, procurement, and construction costs as a credit toward their income taxes in a one-time dollar-for-dollar reduction. If a business doesn’t have enough tax liability to claim the entire credit in a single year, they can carry the remainder over the following 20 years. The ITC does not cover interconnection or some other related “soft” development and financing costs.

The ITC rate for commercial installations that begin construction in 2022 is 26%, and for those starting in 2023, it’s 22%. The credit for GSS installations drops to a permanent 10% for projects starting construction in 2024 and later unless Congress renews it. The ITC has changed as energy policies change, and it may be modified or extended.

Because solar companies often don’t have much profit to tax, the ITC has become an investment vehicle. Investors using it are often large entities, such as banks and hedge funds, with a lot of profit that they want to offset with a deduction on their taxes. The solar developer develops the array, but an investor finances the project and takes the ITC. This can serve as an incentive for companies to finance GSSD.

Looking down a long row of solar panels. Roadside electric lines are visible behind the panels. Credit: Penn State MCOR

Credit: Penn State MCOR

Payment in Lieu of Taxes (PILOT)

Pennsylvania does not currently allow payment in lieu of taxes (PILOT) for GSS, but some states, such as New York and Ohio, do. PILOTs exist to reduce the tax burden on the land and/or GSS owner, while preserving some of the revenue that would have been paid in property taxes. Where PILOT is part of the current tax code, a taxing jurisdiction can notify a GSS developer within a certain time after the developer states their plan to construct a GSS facility that the developer must make an annual payment to offset part of the property tax revenue the facility would have generated. A PILOT must be equal to or less than what would have been paid in property taxes.

PILOTs have the advantage that they create a more stable revenue stream versus standard property tax, which tends to be heavily front-loaded in the early years after development. These payments can be especially consequential in less populous rural communities.

Work at the University of Michigan calculated a reasonable range of PILOTs between $3,000 and $10,000 per megawatt AC (MWAC). A megawatt AC is a measure of solar energy output after inverters convert the direct current (DC) produced by PV panels to alternating current (AC) for use by end users. The researchers calculated that $7,500 per MWAC “would closely match the total lifetime equivalent ad valorem property tax payments.” Ad valorem taxes reflect the value of the asset. In Ohio, PILOTs range from $6,000 to $9,000 per MWAC. Where a community wants to encourage GSSD, they will commonly set a PILOT rate that is beneficial to the taxing jurisdiction but doesn’t hinder GSSD.

Host Community Agreements

New York allows host community agreements (HCAs) in GSSD, but they are not yet practiced in Pennsylvania. PILOT payments are sometimes paired with HCAs. HCAs allow greater flexibility than PILOTs in providing certain benefits directly to the municipality where the GSS project lies. HCAs can be adapted to meet the municipality’s needs and allocated as the host community prefers. A bill proposing to allow HCAs between municipalities and owners of certain power plants was introduced in the 2019–2020 Pennsylvania legislative session.

Solar Viability in Pennsylvania

Given these economic factors, how viable is GSSD in Pennsylvania? Will it really take off? What are the main driving factors?

Corporate and Governmental Sustainability Pledges

Many corporations are choosing to set corporate sustainability goals to meet their customers’ expectations. In Pennsylvania, many electricity producers are under state mandate – the AEPS – to produce at least some of their total power from solar sources. They will pursue the least expensive projects to achieve these mandates.

United Nations Climate Action reports that more than 1,200 companies, 1,000 cities, 1,000 educational institutions, and 400 financial institutions have pledged to take action to cut global carbon emissions by half by 2030. These pledges are important drivers of the alternative energy economy, including solar. Companies such as Google, Microsoft, and Amazon have made pledges. They may not be concerned with developing only the least expensive form of alternative energy.

As an example, Pennsylvania’s PULSE program aims for the state government to source nearly 50% of its annual energy consumption from renewables. This investment was the largest solar commitment by any government in the United States when it was announced in June 2021.

There is a trend now toward larger arrays, which tend to be more economical on a per MW basis because of fixed costs like connection to the grid, access roads, and shared equipment. Variable costs such as labor, equipment, and maintenance may also decrease with larger arrays.

Unpredictable Economic and Political Forces

A number of factors could influence the demand for and the actual building of new GSS facilities:

  • New federal or state climate policies and mandates
  • Price of solar panels and the components needed for other forms of alternative energy
  • Demand for electric vehicles and other new demands
  • The shape of the economic recovery from the COVID-19 pandemic

 

International Relations and Tariffs

International human rights may play a role in the availability of solar panels. The U.S. Congress passed and President Biden signed the Uyghur Forced Labor Protection Act in December 2021 to address concerns about slavery and forced labor in the Xinjiang region of China. It took effect in June 2022. It bans the U.S. import of goods made in that region unless the importer can show that the goods were not made with forced labor. This region provides 45% of the world’s polysilicon, a critical component of solar panels.

In 2018 President Trump placed tariffs up to 30% on most solar equipment from Southeast Asia, which was supplying 80% of all such equipment used in the U.S. The intent was to help U.S. manufacturers of solar panels. The tariffs slowed and stalled many project installations. In June 2022, President Biden declared a two-year pause for tariffs on these solar imports.

The prices of solar panel components, including polysilicon, steel, copper, and aluminum, have risen 10–25% since the beginning of 2021, along with the cost to transport materials. These increases represent a reversal of about a decade of declining prices for solar panels, and how much these increases will affect the demand for solar energy is unclear.

Lessons for GSSD from Recent Marcellus Shale Development
 

Parts of Pennsylvania saw tremendous investment in Marcellus shale natural gas development in the 2000s and 2010s. Several lessons learned from that industry could be valuable to the GSS industry.

Workforce Implications

There is a misconception that solar jobs are only temporary. The U.S. solar industry employed more than 230,000 people in 2020. Installers must be willing to travel to different sites.

GSSD is occurring in Pennsylvania now. The state does not currently have the trained workforce in local communities in the numbers that will potentially be needed. It takes time, effort, and planning to build the institutional capacity to train the right number of people with the right skills at the right time.

GSSD installation capacity is expanding in the United States. A number of skills can be repurposed from programs already in place, but new skills are also needed. The industry is organizing training for employees regionally.

However, regulators don’t want to be trained by the industry. The TOPCORP training program may serve as a useful model for GSS regulator training. TOPCORP is a unique national collaboration among industry, universities, and nongovernmental organizations created to train environmental regulatory agency personnel to inspect oil and gas facilities. The Penn State Marcellus Center for Outreach and Research is a partner. Many more GSS projects are in the planning/exploration phase now than in the construction phase, so training efforts may need to scale up quickly.

A group of people in a TOPCORP training class on a shale gas drilling pad. Credit: Penn State MCOR

Credit: Penn State MCOR

Direct, Indirect, and Induced Economic Development

Direct economic development from GSS comes from the dollars spent to build a facility and keep it operational once it’s built.

Indirect economic development comes as local businesses sell goods or services to the industry. This may involve customizing local businesses to the needs of the industry. Those business owners will need to determine how to optimize this opportunity. GSSD is also an opportunity for new entrepreneurs. It presents a somewhat different challenge to local businesses than Marcellus development did because GSSD is more spread out across the state, whereas Marcellus development was concentrated in certain regions. The salaries of people working with these businesses, where the indirect economic effects of GSSD are generated, are not paid directly by the company building or operating the solar facility.

Induced economic development from GSSD comes as industry employees spend their wages in the local economy. This can produce additional business opportunities beyond what the solar industry generates directly. Because there are few workers after the construction phase, this type of economic development from GSSD is likely to be minimal.

Marcellus shale natural gas development in Pennsylvania occurred in somewhat of a boom-bust cycle. The greatest workforce needs came during initial construction of wells. Once the wells were installed, companies needed only a handful of people to maintain them over time. This pattern will be similar for GSSD.

There is some evidence of land rent inflation in areas near electrical substations or GSS arrays, but we lack hard data as of yet (June 2022). As GSSD concentrates, this is more of a concern. It’s also possible that GSSD lease rates may increase as more facilities are built. This happened with Marcellus development as competition for land resources increased and the market for natural gas was strong.

Landowners should keep in mind that some companies approaching owners about lease options are start-ups. They may have limited experience in the field and a limited track record of success in seeing lease options exercised to project build-out. These companies aim to lock up the land through option agreements and sell those to a larger company. Landowners should also be aware that the company holding an interest in their land may change several times throughout the life of the project. This also happened with Marcellus development. It is the leaseholder’s responsibility to be fully informed throughout the lease term.

Decommissioning
 

Most companies say the life of their solar panels is 20–25 years. Typically, the lease terms include language allowing for extension of the lease timeframe, under like conditions, possibly with an escalator clause to adjust pricing. At some point in the future when the lease expires, the panels and all the equipment will be removed and the land could potentially go back to its prior use, or it might be redeveloped for other commercially viable uses at that time. This process is referred to as decommissioning and should be addressed in a GSS lease and/or in a zoning ordinance. Property-specific decommissioning details need to be worked out and included in the lease, although the actual decommissioning won’t happen for many years.

Some municipalities have requirements for decommissioning in their solar ordinances. Typically, all equipment aboveground would be removed other than components such as electrical poles on the road, interior roadways on the site, or other constructed features that the current landowner prefers to maintain. Cable conduit buried below 3–4 feet might not be removed because the cost of removal would be greater than the value of the materials, although the cables themselves would likely be pulled out and recycled for their valuable metal content. Cables are typically placed in plastic conduit well below plow depth, so this alone shouldn’t stop the reversion of the land to farming. Concrete pads below transformers and battery storage would typically be broken up and removed.

Decommissioning requirements in a zoning ordinance should protect the landowner in case the solar developer or operator goes out of business or abandons the property. Requirements should place the risk on the company, while not creating undue roadblocks to GSSD if a community is interested in pursuing this option.

Decommissioning terms should:

  • Address project dismantling, removal, and restoration as separate phases
  • Require removal of any aboveground equipment, wiring, and structural components, and possibly the removal of belowground equipment
  • Require restoration, grading, and reseeding of any disturbed soil after the removal of equipment, or immediate return of the land to another allowed use. Soil compaction should be remediated as part of this process as well.
  • Specify a deadline for equipment removal and restoration of the land to preconstruction conditions
  • Mandate the posting and maintenance of financial security in the form of trust funds, escrow accounts, bonding, or letters of credit to equal the true cost of decommissioning minus salvage value, as determined by a qualified third-party. Adjust the value of the bond to account for inflation over the 20+ year life of the project’s operation.
  • Grandfather projects permitted prior to the effective date of legislation

Challenges to Return to Farming

If the desire is to return the land to ag use, municipalities should consider whether anything in their solar ordinance would make this difficult. Stormwater management practices, movement of topsoil, tree planting, and the use of earth berms for screening could hinder the return to agricultural use. It may be advisable to limit access roads because they lead to soil compaction.

Even if the land under GSS panels is planted in forages or pollinator plants, it’s possible that the process of decommissioning could negate the 2–3 decades of good stewardship of the soil with severe compaction if the work is done at the wrong time or with improper machinery.

Bills were proposed in the 2021–2022 session of the Pennsylvania legislature that would require bonding to restore the land to certain conditions upon removal of GSS panels.

Solar panels with purple flowers. Credit: Andres Siimon, Unsplash, https://unsplash.com/photos/fCv4k5aAZf4

Credit: Andres Siimon, Unsplash, https://unsplash.com/photos/fCv4k5aAZf4

Financial Assurance

Most of the costs of GSSD occur during construction and right after start-up. Maintenance costs during site operation are relatively low. So that probably lessens the likelihood of a company abandoning an operating project. But a GSS array can be sold during the life of the lease, so a decommissioning bond is important.

One of the challenges with a solar decommissioning bond is determining 20+ years into the future the cost to remove the panels and all the related infrastructure, and offsetting that cost against the recaptured potential value of the recycled materials, particularly the more valuable metals. Most landowners and municipalities don’t have the market savvy to assess that outcome.

Various approaches are being used to place a value on a decommissioning bond. A bond should include an inflation escalator to account for the growth of costs over time. Active research at Penn State Law indicates that most Pennsylvania solar ordinances that mention decommissioning also have a bonding requirement. Similar methods are being used in other states as well.

Some decommissioning legislation introduced in the Pennsylvania legislature names the state as the authority with jurisdiction over decommissioning and would require bonding to the state to complete decommissioning if the owner/operator defaults. With the current legal framework (as of June 2022), a decommissioning bond or other financial assurance is typically payable to the municipality, county, and/or landowner until such time as pending legislation might be passed to create a state requirement for a decommissioning bond.

Ohio has a new law that requires such a bond to the state, with the amount updated every 5 years. This is similar to the pending legislation in Pennsylvania. The Ohio law also specifies 12 months to complete decommissioning and that the state will complete decommissioning if the owner/operator defaults.

Need for Focus on Panel Recycling

Solar energy is commonly viewed as an environmentally friendly alternative energy source. For the industry to maintain its “green” image, it must develop a viable plan to recycle and reuse valuable materials in solar panels and to safely dispose of the materials that can’t be reused.

The International Renewable Energy Agency estimated in 2016 that by 2050 about 78 million metric tons of solar panels will have reached the end of their useful life. This number will be even larger if panels are replaced before the end of their life as panel technology advances. The same study estimated that by 2050 the total value of recoverable materials from outdated solar panels could be more than $15 billion. Some panels may be refurbished at or near the end of their life and sold for lower-end uses. The cost of transporting used panels is another factor.

A broken solar panel. The pieces in a broken solar panel typically remain together in a sheet. Credit: nostal6ie, Shutterstock

The pieces in a broken solar panel typically remain together in a sheet.

Credit: nostal6ie, Shutterstock

The solar industry currently estimates that one ton of solar panels has approximately $550 in potential value if separated into individual components and resold. Most of the value comes from the silver, aluminum, silicon, and copper in the panel. Recycling the useful parts of panels is currently labor-intensive. It must be cost-effective if it is become common practice. In the end, only 10–15% of the original panel volume is waste needing final disposal.

Other countries are much further ahead of the U.S. in panel recycling efforts. The European Union requires solar manufacturers to recycle. Japan requires that solar developers and owners pay into a decommissioning fund.

First Solar is the only U.S. solar panel manufacturer with an active recycling program. It covers only their own products—up to two million panels per year. Through this program, it costs $20–$30 to recycle one panel, but the same panel can be sent to a landfill for only $1–$2.

Pennsylvania does not currently require panels to be recycled, but future legislation may change this. Pennsylvania has expertise in the mining and metal refining industries, and in extracting, processing, and marketing metals. Panel recycling may become a growth sector in Pennsylvania.

Repowering

Although not currently done, there is some thought being given to the technical and financial benefits to not decommissioning GSS facilities, but instead to replacing panels every 10–15 years to optimize productivity. This is called “repowering.” This practice would help get the maximum value from the project for the community. It is assumed that much of the racking and site infrastructure such as roads and fencing would still be useful.

What type of energy might we be using in 30 or 40 years? Many times, the most difficult aspect of developing a new facility is finding the right place for it. If the goal is to repower a site perhaps with the next form of energy production, it may not be unreasonable to assume that with different technology, the property currently hosting a GSS array is still the right place.

Conclusion

GSSD has the potential to affect property values; landowners’ bottom lines; and regional, state, and federal economics and politics. Some effects may be positive and others negative. Many unpredictable factors are influencing the potential buildout: the fate of regulatory requirements for alternative energy use, the existence and size of public tax subsidies for GSSD, the costs of solar versus other forms of alternative energy, and international relations and tariffs. Pennsylvania officials can look to lessons learned from the Marcellus shale natural gas boom in preparing for GSSD.

Decommissioning of solar panels at the end of their life and/or lease period remains a speculative topic because GSSD typically has not yet reached this point in the U.S. There’s a lot of opportunity to develop and optimize panel recycling and materials reuse programs. More exploration and fine-tuning of requirements for financial assurance for decommissioning will be required going forward. The same is true in knowing whether repowering a GSS site is a viable option.

For More Information

About the AEPS Act. n.d. Pennsylvania Public Utility Commission. https://pennaeps.com/

The Dark Side of Solar Power. Harvard Business Review. June 18, 2021. https://hbr.org/2021/06/the-dark-side-of-solar-power

Gov. Wolf Announces Largest Government Solar Energy Commitment in the U.S. March 22, 2021. https://www.governor.pa.gov/newsroom/gov-wolf-announces-largest-government-solar-energy-commitment-in-the-u-s/

Guide to the Federal Investment Tax Credit for Commercial Solar Photovoltaics. 2021. U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. https://www.energy.gov/sites/prod/files/2021/02/f82/Guide%20to%20the%20Federal%20Investment%20Tax%20Credit%20for%20Commercial%20Solar%20PV%20-%202021.pdf

Solar Land Lease Agreements for Landowners. 2019. Pennsylvania Public Utility Commission. https://www.puc.pa.gov/Electric/pdf/Renewable/FS-Solar_Land_Lease_Agreements_FAQ.pdf

Renewable Energy Explained. Portfolio Standards. 2021. U.S. Energy Information Administration. https://www.eia.gov/energyexplained/renewable-sources/portfolio-standards.php

Senate Bill 1086; Regular Session 2019-2020. Pennsylvania General Assembly. https://www.legis.state.pa.us/cfdocs/billinfo/bill_history.cfm?syear=2019&sind=0&body=S&type=B&bn=1086

Solar Energy Development and Land Conservation. 2019. WeConservePA. https://conservationtools.org/guides/182

Solar Jobs Census 2020. Interstate Renewable Energy Council. https://irecusa.org/resources/national-solar-jobs-census-2020/

State Solar Renewable Energy Certificate Markets. 2021. U.S. Environmental Protection Agency. https://www.epa.gov/greenpower/state-solar-renewable-energy-certificate-markets

Tax Treatments for Solar Energy Development in the United States. O. Hintz, E. Gold, E. Uebelhor. University of Michigan. 2021. https://closup.umich.edu/sites/closup/files/2021-08/closup-wp-54-Hintz-Uebelhor-Gold-Inventory-of-State-Solar-Property-Tax-Treatments.pdf

TOP energy training. TOPCORP. https://topenergytraining.com/

Utility-Scale Solar: Land Use, Policy and Emerging Ordinances. M.R. Badissy, S. Mills, and D. Brinley. Penn State Extension. Sept. 23, 2020. https://extension.psu.edu/utility-scale-solar-land-use-policy-and-emerging-ordinances-an-interactive-q-and-a

Glossary
Notes

University of Rhode Island study on house prices near GSSD. (in Impacts to Property Value)

Source: URI researcher: Housing prices decline within mile of solar energy arrays. URI News. https://www.uri.edu/news/2020/09/uri-researcher-housing-prices-decline-within-mile-of-solar-energy-arrays/?fbclid=IwAR30VrYqR8FyEmsfrwE84WLbl7VWD_CSvs0YHWg6YaBlVJCKwO1jwZFc1AM

 

GSSD land purchase offers in Pennsylvania. (in Land Lease Revenues for Property Owners)

Source: Solar Development in Rural Pennsylvania. D. Brockett, testimony. Center for Rural Pennsylvania. October 1, 2021.

 

Farm owner responses to wind energy development in the Midwest. (in Land Lease Revenues for Property Owners)

Source: Farming the Wind: The Impact of Wind Energy on Farming. 2015. Sarah Mills. University of Michigan. https://closup.umich.edu/research/farming-wind-impact-wind-energy-farming

 

Preliminary results of 2022 University of Michigan study about Midwest GSS leaseholders. (in Land Lease Revenues for Property Owners)

Source: Sarah Mills. University of Michigan. https://fordschool.umich.edu/faculty/sarah-mills

 

Power purchase agreements. (in The Economics Behind GSSD)

Source: Prices, Economics, and Impacts of Utility-Scale Solar Leasing in Pennsylvania. D. Brockett. Penn State Extension webinar, May 4, 2021.

 

Pennsylvania’s alternative energy portfolio standard. (in The Economics Behind GSSD)

Source: Utility Scale Solar: Land Use, Policy, and Emerging Ordinances–An Interactive Q and A. D. Brinley. Penn State Extension webinar, Sept. 23, 2020. https://extension.psu.edu/utility-scale-solar-land-use-policy-and-emerging-ordinances-an-interactive-q-and-a

 

SRECs. (in The Economics Behind GSSD)

Sources: Overview of Pennsylvania Utility-Scale Solar Development: Why Here, Why Now? D. Brockett. Penn State Solar Law Symposium: Utility-Scale Solar Development for Lawyers, Landowners and Others. June 15, 2021. https://aglaw.psu.edu/wp-content/uploads/2021/06/PSU-Solar-Law-Symposium-Day-1-session-1-Dan-Brockett.pdf

Alternative Energy Credits and the Renewable Energy Marketplace in Pennsylvania. 2016. Ed Johnstonbaugh. Penn State Extension. https://extension.psu.edu/alternative-energy-credits-and-the-renewable-energy-marketplace-in-pennsylvania

U.S. Environmental Protection Agency. 2022. Green Power Markets, Policies, and Regulations. https://www.epa.gov/green-power-markets/policies-and-regulations

SRECTrade’s bid pricing.2022. http://SRECTrade.com.

 

Solar investment tax credit. (in Public Tax Subsidies)

Sources: New York Solar Guidebook for Local Governments. 2020. New York State Energy Research and Development Authority (NYSERDA). https://www.nyserda.ny.gov/solarguidebook

Residential and Commercial ITC Factsheets. 2021. Solar Energy Technologies Office, U.S. Department of Energy. https://www.energy.gov/eere/solar/articles/residential-and-commercial-itc-factsheets

 

Payment in lieu of taxes. (in Public Tax Subsidies)

Source: Payment in Lieu of Taxes Considerations and Model Interpretation. 2021. E. Gold and S. Mills. University of Michigan. https://closup.umich.edu/sites/closup/files/uploads/3_12_PILT_Memo_and_Explainer_CLOSUP.pdf

 

Host community agreements. (in Public Tax Subsidies)

Sources: New York Solar Guidebook for Local Governments. NYSERDA. p. 12. https://www.nyserda.ny.gov/solarguidebook

New York State Public Service Commission Establishes Host Community Benefit Program. 2021. Phillips Lytle LLP. https://www.renewableenergypost.com/public-service-commission/new-york-state-public-service-commission-establishes-host-community-benefit-program/

 

Entities committed to halving global carbon emissions by 2030. (in Solar Viability in Pennsylvania)

Source: For a livable climate: Net-zero commitments must be backed by credible action. United Nations Climate Action. https://www.un.org/en/climatechange/net-zero-coalition

 

Forced labor concerns for Chinese-made solar panels. (in Solar Viability in Pennsylvania)

Source: Supply Chains Widely Tainted by Forced Labor in China, Panel Is Told. New York Times. April 8, 2022. https://www.nytimes.com/2022/04/08/business/economy/china-forced-labor.html

 

30% tariff on most solar equipment from Southeast Asia. (in Solar Viability in Pennsylvania)

Source: President Trump Slaps Tariffs on Solar Panels in Major Blow to Renewable Energy. Time Magazine. July 3, 2019. https://time.com/5113472/donald-trump-solar-panel-tariff/

 

Biden declared two-year pause on solar imports tariff. (in Solar Viability in Pennsylvania)

Source: Biden pauses solar panel tariffs to jumpstart installations, U.S. companies weigh challenge. PBS News Hour. June 7, 2022. https://www.pbs.org/newshour/economy/biden-pauses-solar-panel-tariffs-to-jumpstart-installations-u-s-companies-weigh-challenge

 

Price increase of 10–25% in solar panel materials since the beginning of 2021. (in Solar Viability in Pennsylvania)

Source: Renewables 2021. Analysis and forecast to 2026. 2021. International Energy Agency. https://iea.blob.core.windows.net/assets/5ae32253-7409-4f9a-a91d-1493ffb9777a/Renewables2021-Analysisandforecastto2026.pdf

 

Bills introduced in 2021–2022 PA legislature session to require bonding. (in Decommissioning)

Sources: Pennsylvania General Assembly. House Bill 2104. https://www.legis.state.pa.us/cfdocs/billInfo/billInfo.cfm?sYear=2021&sInd=0&body=H&type=B&bn=2104

Pennsylvania General Assembly. Senate Bill 284.

https://www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?sYear=2021&sInd=0&body=S&type=B&bn=284

 

Statistics on solar panel end of life and recycling. (in Decommissioning)

Source: End-of-Life Management: Solar Photovoltaic Panels. 2016. International Renewable Energy Agency. https://www.irena.org/publications/2016/Jun/End-of-life-management-Solar-Photovoltaic-Panels

 

Estimated potential value of one ton of solar panels. (in Decommissioning)

Source: Comments for Joint Hearing of the Pennsylvania Senate Environmental Resources & Energy and Agriculture and Rural Affairs Committees. Thomas Murphy, Penn State. May 12, 2021.

 

European Union and Japanese solar recycling efforts. (in Decommissioning)

Source: Solar panel recycling in the US—a looming issue that could harm industry growth and reputation. 2020. PV Magazine. https://pv-magazine-usa.com/2020/12/03/solar-panel-recycling-in-the-us-a-looming-issue-that-could-harm-growth-and-reputation/

 

First Solar recycling panel costs. (in Decommissioning)

Source: The Dark Side of Solar Power. 2021. Harvard Business Review. https://hbr.org/2021/06/the-dark-side-of-solar-power

Disclaimer and Funding

By Thomas B. Murphy, Director, Penn State Marcellus Center for Outreach and Research, and Joy R. Drohan, Eco-Write, LLC.

Web design by Bernd J. Haupt. PDF design by Patricia Craig.

This material is based upon work supported by the United States Department of Energy, Office of Energy Efficiency and Renewable Energy, under State Energy Program Award Number DE‑EE0008293.

This material was prepared with support and funding of the Pennsylvania Department of Environmental Protection (DEP) and the US Department of Energy’s (DOE) State Energy Program. Any opinions, findings, conclusions, or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the DEP or DOE. This report was prepared as an account of work sponsored by an agency of the U.S. Government. Neither the U.S. Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the U.S. Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the U.S. Government or any agency thereof.

Additional support provided by the Penn State College of Agricultural Sciences, the Penn State Marcellus Center for Outreach and Research, and the Penn State College of Earth & Mineral Sciences.

Section 7: TAX IMPLICATIONS OF LAND CONVERSIONS FOR GRID-SCALE SOLAR DEVELOPMENT

Section 7: TAX IMPLICATIONS OF LAND CONVERSIONS FOR GRID-SCALE SOLAR DEVELOPMENT

Goals of This Publication

Our primary goal with this guide is to explain the emerging grid-scale solar energy development trends occurring in the Commonwealth and what might be expected in the next few years. The guide is intended to inform municipal and county officials about grid-scale solar development so they can potentially add clear, regionally consistent language addressing the specific issues around grid-scale solar energy development to their zoning ordinances and other regulations.

A resources list at the end of this publication provides sources of further information. A glossary defines unfamiliar terms. A notes section provides sources for statistics and additional information. Over time as new information becomes available to further inform this discussion, it will be added to this guide, including information about new legislation affecting solar development and the evolution of new solar technologies.

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Current Status of Taxation on Grid-Scale Solar Development in Pennsylvania
​The Assessment Law Committee (ALC) of the Assessors’ Association of Pennsylvania (AAP) has been working since early 2021 to develop a uniform approach to taxation of grid-scale solar (GSS) projects. Below we summarize that committee’s approach to valuation. This is informed by their interpretation of current statutes and case law.

Tax treatment of grid-scale solar development (GSSD) in Pennsylvania is currently (July 2022) governed by Chapter 88 of Pennsylvania’s Consolidated County Assessment Law (2016). Assessment methods are based on case law, and could change as different issues are litigated or legislation passes. The ALC will be putting forth a formal recommendation to the County Commissioners Association of Pennsylvania, with a copy to the Pennsylvania Local Government Commission. As of July 2022, no legislation addressing GSSD assessment had been submitted to the Pennsylvania legislature.

Pennsylvania’s Consolidated County Assessment Law (section 8811) lists the following exception—items not subject to tax:

“Machinery, tools, appliances and other equipment contained in any mill, mine, manufactory or industrial establishment shall not be considered or included as a part of the real estate in determining the value for taxation of the mill, mine, manufactory or industrial establishment.” The AAP ALC is interpreting this to mean that solar panels themselves, transformers, inverters, and other equipment used in GSSD are not subject to taxation.

Pennsylvania’s Consolidated County Assessment Law (section 8811) says that buildings “permanently attached to land or connected with water, gas, electric or sewage facilities” are subject to tax. It also says “that portion of a steel, lead, aluminum or like melting and continuous casting structure which encloses or provides shelter or protection for the elements for the various machinery, tools, appliances, equipment, materials, or products involved in the mill, mine, manufactory, or industrial process” are subject to taxation. The AAP ALC is interpreting these two statements to mean that buildings associated with GSSD are taxable, including the facilities in which battery storage is housed.

Furthermore, Pennsylvania’s Consolidated County Assessment Law (section 8811) says that “No wind turbine generators or related wind energy appliances and equipment, including towers and tower foundations, shall be considered or included as part of the real property in determining the fair market value and assessment of real property used for the purpose of wind energy generation. Real property used for the purpose of wind energy generation shall be valued under section 8842(b)(2) (relating to valuation of property).”

Man using a screwdriver to affix a solar panel. Credit: VAKS-Stock Agency/https://shutterstock.com

Man using a screwdriver to affix a solar panel.

Credit: VAKS-Stock Agency/https://shutterstock.com

Section 8842, Valuation of property, reads, “The valuation of real property used for the purpose of wind energy generation for assessment purposes shall be developed by the county assessor utilizing the income capitalization approach to value. The valuation shall be determined by the capitalized value of the land lease agreements, supplemented by the sales comparison data approach as deemed necessary by the county assessor. The lessee, or lessor on behalf of the lessee, shall provide the nonproprietary lease and lease income information reasonably needed by the county assessor to determine value by September 1.” The AAP ALC is interpreting these statements to mean that solar panels and related equipment in GSSD are not taxable; that the land on which GSSD occurs and associated taxable structures (fencing, etc.) should be valued using the income approach to value; and that leaseholders must provide a copy of their lease to the county assessor as a basis for valuation.

The AAP ALC notes that the income approach is based on “the concept that current value is the present worth of future benefits to be derived through income production by an asset over the remainder of its economic life. The income approach uses capitalization to convert the anticipated benefits of the ownership of property into an estimate of present value.”

In determining recommended assessment procedures, the state’s assessors also consider relevant case law once it reaches the Commonwealth Court level for cases involving the valuation of machinery and equipment at power generation facilities.

Remember that the above guidelines are currently just suggestions from the AAP ALC. Ideally, these recommendations would be codified into law by the Pennsylvania legislature. However, the Franklin County, Pennsylvania, tax assessor used the above guidelines to determine taxation on four grid-scale solar developments in the county that have come online since 2020. Representatives of the AAP ALC presented their recommended tax guidelines to the County Commissioners Association Assessment and Taxation Committee in August 2022.

Steps in the income approach to value

In a summary presentation, the AAP ALC offers these steps in GSSD assessment:

  1. Estimate Potential Gross Income (PGI).
  2. Estimate vacancy and rent loss.
  3. Subtract vacancy and credit loss from PGI, and then add miscellaneous or ancillary income; this equals Effective Gross Income (EGI).
  4. Estimate expenses, fixed, operating, and reserves.
  5. Subtract expenses from EGI; this equals Net Operating Income (NOI).
  6. Develop a Cap Rate:
    • Determine the Effective Tax Rate
    • Add Cap Rate and Effective Cap Rate together to get final Cap Rate
  7. Divide NOI by the cap rate you calculate to arrive at value.

 

GSSD assessment steps

The AAP ALC offers this example of GSSD assessment using those steps:

How to value a 500-acre solar farm by the income approach to value?

Sample # 1 – Simple Income Approach

  1. 500 acres x $1,000/acre [lease rate] = $500,000 = Potential Gross Income (PGI)
  2. $25,000 vacancy & credit loss (5%)
  3. $500,000 ‐ $25,000 = $475,000 = Effective Gross Income (EGI)
  4. $47,500 in expenses (10%)
  5. $475,000 ‐ $47,500 = $427,500 – Net Operating Income (NOI)
  6. Cap rate of 8%
  7. $427,500 / 8% = $5,343,750
  8. $5,343,750 x 82.8% = $4,424,625 Assessment
    (Market Value x Common Level Ratio = Assessment)

 

Definitions:

Cap rate (capitalization rate): “used in the world of commercial real estate to indicate the rate of return that is expected to be generated on a real estate investment property. This measure is computed based on the net income which the property is expected to generate and is calculated by dividing net operating income by property asset value and is expressed as a percentage. It is used to estimate the investor’s potential return on their investment in the real estate market.” https://www.investopedia.com/terms/c/capitalizationrate.asp

Common level ratio: “A ratio that measures how a county’s base year assessments compare with current real estate market valuations.” https://dced.pa.gov/local-government/boards-committees/steb-ted-faq/

Vacancy & credit loss: “In the rental industry and real estate investing market, vacancy and credit loss is the amount of money—or the percentage of net operating income—that is estimated to not be realized due to non-payment of rents and vacant units. … Your vacancy and credit loss will adjust your gross potential income.” https://www.thebalancemoney.com/vacancy-and-credit-loss-in-real-estate-investing-2867366

Effects of Pennsylvania’s Clean and Green Program on GSSD Land Conversion

If acreage is valued at an agricultural assessment rate, the land use may change to a commercial or industrial assessment value instead if GSS is added. The percentage increase would vary per county and within a county, depending on location.

Pennsylvania’s Clean and Green tax program, which strives in part to preserve farmland, provides preferential tax treatment for enrolled agricultural lands (for more information, see Section 5). GSSD may not occur on enrolled lands. A property in Clean and Green can be removed from the program to allow GSSD, but a rollback tax penalty worth 7 years of the difference in preferential property taxes (the difference between the tax on the land in the Clean and Green program and the tax on the land outside the program) will be due in a cumulative one-time payment. The solar developer typically pays this (this arrangement should be stated in the lease). The penalty is not thought to be large enough to stop GSSD from proceeding on land formerly in the Clean and Green program.

If only part of a land parcel enrolled in Clean and Green will be developed for GSS, the entire parcel must be unenrolled at the same time, then the non-GSSD part(s) can go back into the program if the owner desires and program qualifications are met. The lump sum tax rollback penalty would still be due.

Under current Clean and Green regulations, if at least half of the energy generated is used on the farm, that land use is not a violation of the program, but this exception would not apply with GSSD.

It’s possible that rules could change and allow GSS with agricultural use (agrivoltaics, see Section 5) beneath the panels to still qualify for some classifications of “agricultural” land use.

Sheep grazing under solar panels. Credit: Penn State MCOR

Sheep grazing under solar panels.

Credit: Penn State MCOR

GSSD assessment steps for Clean and Green

The rate for taxation (millage) does not change for Clean and Green properties. The assessment is reduced because the land is taxed on the use value rather than the market value. Here’s an example from the AAP ALC showing the different assessment value for the Clean and Green program:

How to value 1,359.56-acre proposed solar farm?

Sample # 2: $500 per acre lease rate for forested land

  1. PGI = $679,780
  2. Vacancy & credit loss ‐5% = $33,989
  3. EGI = $645,791
  4. Expenses 10% = $64,579
  5. NOI = $581,211
  6. Loaded cap = 10.2% (using 8.5% cap and effective tax rate of 1.7%)
  7. Market Value = $581,211 / 10.2% = $5,698,155
  8. Assessed value = $1,327,670

Millage 67.82, Total tax on land only $90,042, Tax per acre = $66.23

$1,327,670 x (67.82/1,000) = $90,042 / 1,359.56 = $66.23

 

Currently under Clean and Green the assessed value per acre is $50.18 and the tax is $3.40 per acre. ($50.18 x 0.06782 = $3.40)

Currently, the non-Clean and Green assessed value would be the “base year” rates established during the county’s last reassessment, $257.71 per acre and the tax is $17.48 per acre. ($251.72 x 0.06782 = $17.48)

With the lease calculations above, the assessed value per acre would be $976.54 and the tax would be $66.23 per acre.

$1,327,670 / 1,359.56 [acres]= $976.54 x 0.06782 = $66.23 per acre

Effects of GSS Taxation on Leaseholders

Landowners considering a GSS lease should consult their attorney, and possibly the county tax assessor, about the potential tax implications. Paying for any potential increased real estate taxes with GSSD should be negotiated through the land lease. Leases typically state that the developer agrees to pay any tax increase due to the GSS.

Close-up of a solar panel. Credit: Wayne National Forest, CC BY 2.0, Wikimedia Commons

Credit: Wayne National Forest, CC BY 2.0, Wikimedia Commons


GSS Differs from Other Land Use Impacts in Relation to Public Services

GSS may be an ideal land use for local government, assuming the tax level increases to some extent, because this land use requires minimal services from local government. GSSD does not bring children needing education or a facility requiring significant amounts of municipal water, or any requirement for sewer capacity. There might be minor law enforcement issues such as vandalism. Especially as on-site battery power storage becomes more common on these sites, there is a potential fire safety hazard requiring first responders to have specialized training. The site will be a major construction project both during construction and during decommissioning at the end of the lease, which will bring significant short-term truck traffic and potential road impacts.

Aerial view of many solar panels in a field. Credit: Markus Spiske, Unsplash, CC

Credit: Markus Spiske, Unsplash, CC

Rows of solar panels under a partly cloudy sky. Credit: American Public Power Association, Unsplash, CC

Credit: American Public Power Association, Unsplash, CC

Pending Taxation Changes Being Considered at the Municipal, County, and/or State Level

As mentioned above, as of July 2022, no legislation addressing GSSD assessment had been submitted to the Pennsylvania legislature. Tax assessment methods could change as different issues are litigated or legislation passes.

There is debate about the co-location of agriculture with GSSD—called “agrivoltaics” (see Section 5)—and how that may affect taxation. What degree of agricultural activity should count as agriculture for tax benefits? How many sheep need to graze the land per acre? What if the groundcover is a wildflower mix meant to support pollinators—does that count as agriculture? Would states make the general assumption that New York State has so far: if the land is under solar panels it’s not considered for agricultural taxation? This is a topic for debate and may change, but the AAP ALC generally does not see agrivoltaics qualifying a GSS project for agricultural land use taxation.

A woman walks underneath many rows of solar panels. Credit: Werner Slocum, NREL

Credit: Werner Slocum, NREL

Estate and Succession Planning with Solar Leases

Pennsylvania’s farmers are increasing in average age, and there’s often a lack of succession planning for what will happen to the farm business and the land after the current operator retires, is unable to continue farming, or passes away. Adding in a GSS lease further complicates this issue.

Besides the desire to pass along the land and perhaps a business, estate planning is often driven by the desire to minimize taxes. Federal estate and gift taxes are unlikely to affect most landowners because the federal estate and gift tax exclusion amount is more than $12 million per person, but these federal tax laws can and do change with the political climate.

Currently, Pennsylvania inheritance tax is the foremost concern in most situations. The rate differs depending on who is receiving the asset, and ranges from 0% for a spouse to 15% when the recipient is someone other than a child, grandchild, or sibling. Certain agricultural and family business exemptions would exempt most farm business assets from inheritance tax. But GSSD may cause those exemptions to be inapplicable for the real estate used for GSS. Further guidance is needed from the Pennsylvania Department of Revenue, and a court case may be necessary for a final decision of how the incorporation of agrivoltaics (Section 5) to a GSSD may affect farm taxation.

Leaseholders may pursue valuation discounting of their potential future earnings if the solar developer decides to exercise the lease option and develop the property for solar. This can produce very sizable reductions in future taxes, but this planning must be done during the option phase of a lease. The reduction in taxation takes into account the uncertainties of whether the company will decide to exercise the lease option, the future prospects of the solar industry, and other factors. Valuation discounting requires appraisal and valuation of the leasehold interest by an appraiser or certified public accountant.

With any succession plan, there are various tools that can be used to transfer and transition assets and to minimize taxes. These tools for transfer and transition include limited liability companies (LLCs) and trusts. Every case is different in succession planning, so property owners are encouraged to talk to a qualified estate and succession planning attorney and/or tax planner.

Sunset over rows of solar panels. Credit: Thinnapob Proongsak/Shutterstock.com

Credit: Thinnapob Proongsak/Shutterstock.com

Conclusion

Assessment of GSSD in Pennsylvania is currently in flux (July 2022). The Assessment Law Committee of the Assessors’ Association of Pennsylvania has analyzed Pennsylvania’s Consolidated County Assessment Law and relevant case law and developed recommendations for valuing GSSD. They state:

  • Solar panels themselves, transformers, inverters, and other equipment used in GSSD are not subject to taxation.
  • Buildings associated with GSSD are taxable, including the facilities in which battery storage is housed.
  • The land on which GSSD occurs and associated taxable structures should be valued using the income approach to value.
  • Leaseholders must provide a copy of their lease to the county assessor as a basis for valuation.

The ALC will put forth a formal recommendation to the County Commissioners Association of Pennsylvania, with a copy to the Pennsylvania Local Government Commission, on GSSD valuation. As of July 2022, no legislation addressing GSSD assessment had been submitted to the Pennsylvania legislature. Assessment methods could change as different issues are litigated or legislation passes.

Pennsylvania’s Clean and Green tax program provides preferential tax treatment for enrolled agricultural lands. Currently, GSSD may not occur on enrolled lands. If property is removed from the program for GSSD, a rollback tax penalty is due. The penalty is not thought to be large enough to stop GSSD from proceeding on farmland formerly in the Clean and Green program.

Landowners considering a GSS lease should consult their attorney and county tax assessor about the potential tax implications and be sure that their lease addresses the payment of additional property taxes due to GSSD.

For More Information

Assessment Law and Procedure in Pennsylvania, 17th ed. Pennsylvania Bar Institute. https://www.pbi.org/ProductCatalog/Product.aspx?ID=43554

New York Solar Guidebook for Local Governments. New York State Energy Research and Development Authority. https://www.nyserda.ny.gov/solarguidebook

Glossary
Notes
Chapter 88 of Pennsylvania’s Consolidated County Assessment Law. (in Current Status of Taxation on Grid-Scale Solar Development (GSSD) in Pennsylvania)

Source: 2016 Pennsylvania Consolidated Statutes, Title 53 – Municipalities Generally, Chapter 88 – Consolidated County Assessment. Justia. https://law.justia.com/codes/pennsylvania/2016/title-53/chapter-88

 

All information about proposed tax treatment of GSSD in Pennsylvania. (in Current Status of Taxation on Grid-Scale Solar Development (GSSD) in Pennsylvania)

Source: Call with Charles “JR” Hardester, Lawrence County, Pennsylvania, assessor, and Josh Zeyn, Tioga County, Pennsylvania, assessor, July 8, 2022.

 

“If acreage is valued at an agricultural assessment rate, the land use may change to a commercial or industrial assessment value instead if GSS is added.” (in Current Status of Taxation on Grid-Scale Solar Development (GSSD) in Pennsylvania)

Source: Call with Randy Waggoner, Perry County, Pennsylvania, assessor, June 23, 2022.

 

“If only part of a land parcel enrolled in Clean and Green will be developed for GSS…” (in Effects of Pennsylvania’s Clean and Green Program on GSSD Land Conversion)

Source: Utility-Scale Solar for Municipal Officials. T. Murphy. Penn State Extension webinar, Jan. 18, 2022.

 

“Typically, the lease states that the developer agrees to pay the higher taxes due to the GSS equipment.” (in Effects of GSS Taxation on Leaseholders and Neighboring Properties)

Source: Call with Charles “JR” Hardester, Lawrence County, Pennsylvania, assessor, and Josh Zeyn, Tioga County, Pennsylvania, assessor, July 8, 2022.

 

“To cover these increased costs, the developer may negotiate lower lease payments to cover this cost, commit less to community philanthropy, or negotiate a higher power purchase agreement, so essentially all costs are offset.” (in Effects of GSS Taxation on Leaseholders and Neighboring Properties)

Source: Call with David Kay, senior extension associate, Cornell University, June 10, 2022.

 

“In the U.S. Southwest and Midwest, GSS revenues help average out tax collections….” (paragraph, in GSS Taxation in Other Midwest and Northeast States)

Source: Utility-Scale Solar: Land Use, Policy and Emerging Ordinances. M. R. Badissy, Penn State Extension. Sept. 23, 2020. https://extension.psu.edu/utility-scale-solar-land-use-policy-and-emerging-ordinances-an-interactive-q-and-a

 

All information about GSS taxation in New York State. (in GSS Taxation in Other Midwest and Northeast States)

Source: Call with David Kay, senior extension associate, Cornell University, June 10, 2022.

 

“Numerous states have tax penalties for converting land in agricultural tax assessment categories to GSSD.” (in Effects of Farmland Preservation Tax Benefit and Penalty Programs on GSSD in Other Midwest and Northeast States)

Source: Approaches to Balancing Solar Expansion and Farmland Preservation: A Comparison across Selected States, T. Grout & J. Ifft, Cornell University. EB 2018-04, May 2018. https://dyson.cornell.edu/wp-content/uploads/sites/5/2019/02/Cornell-Dyson-eb1804.pdf

 

“In Michigan, land enrolled in the state’s farmland preservation program under a 7-year contract gets a tax break.” (in Effects of Farmland Preservation Tax Benefit and Penalty Programs on GSSD in Other Midwest and Northeast States)

Utility-Scale Solar: Land Use, Policy, and Emerging Ordinances, An Interactive Q and A Webinar. S. Mills. Penn State Extension webinar. Sept. 23, 2020. https://psu.mediaspace.kaltura.com/media/1_1j2si5jk

 

Massachusetts has GSSD-specific incentives for redevelopment of brownfields. (in Effects of Farmland Preservation Tax Benefit and Penalty Programs on GSSD in Other Midwest and Northeast States)

Source: Developing Solar Photovoltaics on Contaminated Land. Commonwealth of Massachusetts. https://www.mass.gov/lists/developing-solar-photovoltaics-on-contaminated-land


GSS Differs from Other Land Use Impacts in Relation to Public Services

Source: Call with David Kay, senior extension associate, Cornell University, June 10, 2022.


Estate and Succession Planning with Solar Leases

Source: Estate and succession planning with solar leases. J. Kiessling. Penn State Extension webinar, July 26, 2022. https://psu.mediaspace.kaltura.com/media/Clip+of+Estate+planning+with+Solar+Leases/1_c9qnzimr

Disclaimer and Funding

By Thomas B. Murphy, Director, Penn State Marcellus Center for Outreach and Research, and Joy R. Drohan, Eco-Write, LLC.

Web design by Bernd J. Haupt. PDF design by Patricia Craig.

This material is based upon work supported by the United States Department of Energy, Office of Energy Efficiency and Renewable Energy, under State Energy Program Award Number DE‑EE0008293.

This material was prepared with support and funding of the Pennsylvania Department of Environmental Protection (DEP) and the US Department of Energy’s (DOE) State Energy Program. Any opinions, findings, conclusions, or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the DEP or DOE. This report was prepared as an account of work sponsored by an agency of the U.S. Government. Neither the U.S. Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the U.S. Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the U.S. Government or any agency thereof.

Additional support provided by the Penn State College of Agricultural Sciences, the Penn State Marcellus Center for Outreach and Research, and the Penn State College of Earth & Mineral Sciences.

Section 8: ORDINANCE CONSIDERATIONS FOR GRID-SCALE SOLAR DEVELOPMENT

Section 8: ORDINANCE CONSIDERATIONS FOR GRID-SCALE SOLAR DEVELOPMENT

Goals of This Publication

Our primary goal with this guide is to explain the emerging grid-scale solar energy development trends occurring in the Commonwealth and what might be expected in the next few years. The guide is intended to inform municipal and county officials about grid-scale solar development so they can potentially add clear, regionally consistent language addressing the specific issues around grid-scale solar energy development to their zoning ordinances and other regulations.

A resources list at the end of this publication provides sources of further information. A glossary defines unfamiliar terms. A notes section provides sources for statistics and additional information. Over time as new information becomes available to further inform this discussion, it will be added to this guide, including information about new legislation affecting solar development and the evolution of new solar technologies.

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The Importance of Having a Solar Ordinance
 

Recent research at Penn State Dickinson Law reviewing Pennsylvania’s more than 2,500 municipal zoning ordinances showed that only 5% of local zoning codes in the state currently provide specific guidance for grid-scale solar (GSS) projects, also known as principal use solar, where the energy generated is used off-site.

The study sought to determine what guidance is provided for the development of solar energy projects—in particular, authorization of such facilities as a “right” or “conditional use.” A conditional use is an exception to the zoning code that allows use of a property in a way that doesn’t conform to the zoning code. It is controlled by the municipal governing body rather than the zoning board. Grid-scale solar development (GSSD) is generally subject to approval as a conditional use in Pennsylvania zoning codes where it is addressed.

The Penn State team started this project in response to requests to Penn State Extension by local government officials seeking guidance on solar ordinances. The team also wanted to identify common practices within Pennsylvania and the U.S., with the goal of preparing a library of information for municipal officials.

Eighty-seven percent of zoning codes in the Commonwealth provide no guidance on the development of solar energy facilities, whether on a home’s roof or covering hundreds of acres. The remaining 13% primarily address accessory use solar for the generation of electricity used on-site (typically homes).

Sunrise over a large solar facility in a hilly region. Credit: RenataP/Shutterstock.com

Credit: RenataP/Shutterstock.com

Principal use solar is often implicitly or explicitly prohibited in zoning ordinances. Many times, an ordinance fails to mention solar at all or mentions it without specifying where or under what circumstances it is permitted.

In summary, most municipalities in Pennsylvania don’t have GSS requirements clearly laid out. This means extra work and extra costs for both developers and municipalities. Municipalities don’t have the time or the staffing to come up with new site requirements on a case-by-case basis. Laying out clear expectations for GSSD in a zoning ordinance lets developers know the standards they must meet.

The Problems Raised by Having Only Limited Guidance
 

The lack of guidance on GSS projects in most municipal zoning codes is important because Pennsylvania has experienced a ten-fold increase in GSS capacity over the past decade, with an even faster pace of project development expected during the next decade.

When a municipality does not specifically address GSSD requirements in an ordinance, the uncertainty around permitting normally increases the cost of solar projects. This is due to the need to work through the regulatory process and the potential for new ordinance development addressing solar, including possible public outreach meetings. It increases the time to develop projects while addressing community, landowner, and developer concerns.

These “soft” costs (including permitting and inspection, financing, installation labor, land acquisition, etc.) have begun to play a greater role in solar project development because fixed costs, such as hardware and engineering, have trended downward over the past ten years. Developers can save money by wisely choosing the jurisdictions they deal with. U.S. Department of Energy researchers have found that the total price of installation is higher by $0.64–0.93 per watt for jurisdictions having the most onerous zoning restrictions versus those having most favorable regulations. This price differential adds up when a solar company is considering a 5-megawatt or larger solar facility. As a result, the ability of local governments to enact clear guidance for GSS projects has a direct and growing impact on a project’s overall costs.

Most companies would rather try to develop in a jurisdiction where there’s a known ordinance, because they know what they’re dealing with, whether it’s most favorable or not. Even better than a municipal-based approach may be a county-wide or region-wide approach. Inconsistent and unpredictable land use regulations from one municipality to the next may generate a less comprehensive outcome for this type of energy development on a region-wide basis.

Three men installing a solar panel in a large solar array. Credit: Frame Stock Footage/Shutterstock.com

Credit: Frame Stock Footage/Shutterstock.com

Like other energy projects, the electricity produced from GSS is sold into a regulated market with strict standards and limited margins. Storage capacity for electricity is currently limited. Oil and gas margins are greater, and producers can store the products and sell when the price is high. The electricity market is not highly liquid, meaning that there are relatively few buyers and sellers and it is not easy to convert the product into cash without affecting its market price. Therefore, the industry has less tolerance for risk and unknowns. It also faces the challenge of being a new energy system that many are unfamiliar with.

Local Regulation

In Pennsylvania, zoning is done locally by townships under the authority of the Municipalities Planning Code. Responsibility for siting GSSD generally lies at the township level, although a number of counties administer zoning that affects local municipalities. The county conservation district has to approve the site’s erosion and sedimentation and stormwater management plans.

In Pennsylvania, zoning is done locally by townships under the authority of the Municipalities Planning Code. Responsibility for siting GSSD generally lies at the township level, although a number of counties administer zoning that affects local municipalities. The county conservation district has to approve the site’s erosion and sedimentation and stormwater management plans. Local planning for GSSD should ideally include an up-to-date comprehensive plan and zoning code consistent with that plan, as well as a solar energy ordinance. Communities can be proactive before GSS proposals arise. Leaders should think about different renewable energy sources and how and whether or where they fit with the community’s long-term goals. If a community doesn’t plan ahead for where they want GSSD and how they want to regulate it, they may end up with it where they didn’t want it. Most of new GSSD is expected to occur in rural areas. Developers will favor places that see this as an economic opportunity to grow their property tax revenues. Research from the U.S. Department of Energy’s National Renewable Energy Lab shows that “communities that address solar in their codes have more installed solar per capita.”

Establishing specific guidance at the local level clarifies the planning process for officials, residents, and investors by:

  • Clarifying regulatory costs through predictable permitting procedures and fees
  • Building awareness among residents about the implications of GSSD and reflecting their localized concerns in policy
  • Creating a consistent and manageable framework for officials to apply to projects despite variations across location, scale, technologies, and purpose
A woman uses a laptop computer amidst a large solar array. Credit: VAKS-Stock Agency/Shutterstock.com

Credit: VAKS-Stock Agency/Shutterstock.com

Many municipal ordinances currently have no provision related to solar. If a use is not specifically permitted in the ordinance, it’s considered a conditional use or special exception use

The Scope of Solar Ordinances
 

Where GSSD is placed within a jurisdiction is an important local consideration. An effective zoning ordinance outlines GSS to be the principal use of land in certain districts. Some municipalities may say it should be placed only in industrial zones, and in others, it may be permitted in ag districts or other more rural designations.

A solar array behind a wire fence. Credit: Gerry Machen, Flickr, CC 2.0

Credit: Gerry Machen, Flickr, CC 2.0

Some municipalities are taking a less prescriptive approach to GSSD. In those cases, the municipality gives a framework of what must be adhered to in terms of development outcomes for projects, letting the solar developer propose possible ways to fit their project into the community in a less disruptive way. In this approach, it is generally considered best practice to specify only the desired outcome and let developers choose how they prefer to achieve those outcomes.

For example, an ordinance might specify that the panels not be seen from the frontage road and let the developer decide how to achieve this. Conversely, if a screening requirement is very specific, such as saying that the developer must plant a certain species of tree along the road frontage at certain spacing, the municipality may get frequent variance applications to modify this requirement. Each variance application requires a hearing of the zoning board, which increases the work and cost for the municipality.

If a certain outcome should be avoided, that also should be specified up front in the ordinance. Examples might include a noise level at the perimeter fence or a glare level not to exceed.

When a municipality is ready to develop a solar ordinance, they should gather the needed expertise with their solicitor and/or with a consultant familiar with the technology and solar development trends. The municipality should always seek to develop an ordinance compatible with existing land use plans and regulations.

Content of Solar Ordinances

Many municipalities want to adopt an ordinance that reasonably protects the health, safety, and welfare of the community, but may allow for accessory or principal solar development. In deciding what to include in a solar ordinance, municipal officials should consider the unique issues GSSD creates on the landscape and tailor the ordinance to address those concerns.

A solar ordinance starts with clear definitions of terms. If a term in an ordinance is ambiguous, the Pennsylvania Municipalities Planning Code says that the applicant can decide how the term is defined.

A solar ordinance defines the districts where GSSD is allowed, and for each of those districts, whether GSSD is:

  • A permitted use, meaning that anyone who chooses to do this has the right to.
  • A special exception use, which would require approval from the zoning board.
  • A conditional use, which would require approval from elected officials of the jurisdiction, such as the board of supervisors, county commissioners, or borough council. These groups can attach conditions to the approval.
Aerial of large solar array being installed on a snowy flat landscape. Credit: Todd Wilson/Shutterstock.com

Credit: Todd Wilson/Shutterstock.com

Many municipal ordinances currently have no provision related to solar. If a use is not specifically permitted in the ordinance, it’s considered a conditional use or special exception use.

A solar ordinance should also define sensitive areas where GSSD is not allowed, and the required setback from constructed drainage corridors and wetlands, as well as the maximum percent slope of land where GSSD may be placed (15% is common).

A solar ordinance should address:

  • Accessory and principal use systems— Accessory systems generate electricity primarily used on-site; principal use systems, including GSSD, generate electricity for use off-site.
  • Site layout—A site plan map and details about the type of roads on the site and the number of access points should be required.
  • Setback of the site fence from the road and other property lines—Many ordinances use the typical setback requirement for the zoning district where the facility will be, and may require a larger setback in residential districts.
  • Height limits on the panels—To limit the visibility of the panels from neighboring properties, a maximum of 20 feet is often used.
  • Maximum lot coverage regulations—This is a potential limitation on the percentage of a property that may be covered with GSS panels. Some municipalities have attempted to concentrate solar away from other conflicting uses, such as residences.
  • Fencing along roads and residential areas— Perimeter fencing 7–8 feet high, with a locked gate, is common, with safety and warning signs as recommended by the industry. Some ordinances specify the size of the holes in the fence to allow wildlife passage.
  • Screening—A solar ordinance should indicate that vegetative screening is required along all road and residential property lines, including replacement of plants that die. A mixture of trees, shrubs, grasses, and flowering plants provides the most effective screening. Coniferous trees provide year-round screening. Some ordinances specify the type of plant materials or say that native plants must be used.
  • Buffer—A buffer of 20 feet between panels and the perimeter fence is common for emergency vehicle access.
  • Stormwater management and impervious area—The Pennsylvania Department of Environmental Protection (DEP) has posted a list of frequently asked questions (FAQ) about stormwater management related to GSSD. If the developer plants the land in meadow conditions once the panels are installed, DEP considers this no impact as related to stormwater, if the site is maintained with at least 90% perennial vegetative cover. However, this guidance conflicts with impervious surface requirements in some zoning ordinances and may be challenged by a developer. As appropriate land becomes less available, developer challenges to ordinances may become more frequent.
  • Traffic impacts—The permit application should address the effects of the GSSD on traffic on any bordering road, during both construction and operation of the facility, and detail any mitigation practices needed.
  • Battery storage—Batteries should be housed within a secure, locked container near the middle of a GSS facility, or away from residences, because of equipment noise, commonly from cooling fans.
  • Glare/reflection mitigation—A solar ordinance should require use of an antiglare coating on the panels. A glare study (see Section 3) could be required to assess impacts to neighboring residences and roads, but may only be necessary for facilities near airports, as required by Federal Aviation Administration rules.
  • Solar access—Panels should be located so that shading from neighboring properties is not a problem, or developers can negotiate solar easements with neighboring property owners to ensure direct sunlight on the panel array and record those easements with the county recorder of deeds.
  • Decommissioning—A solar ordinance should require a decommissioning plan (see Section 6) that defines the conditions upon which decommissioning must be started (often 1 year of non-use of the facility) and who is responsible for decommissioning. It should require removal of all power production equipment, roads, fencing, etc., and include a timeframe for completion (often 1 year). It should require restoration of the property to the condition it was in when GSS was developed, or other grading and landscaping requirements. A solar ordinance should specify how often the decommissioning plan must be updated and requirements for financial security (bond, letter of credit, cash, etc.) for decommissioning. The amount of financial security should be periodically assessed (often every 5 years) and increased as needed. Determination of the necessary amount may be done by a third party. If the developer or holder of the lease (the lessee) fails to maintain the required bond as specified in the decommissioning plan, the municipality can withdraw the facility’s permit. Whenever there’s a change of lessee or land ownership, there must be a new commitment to the municipality that verifies who the parties are, the maintenance of a decommissioning plan, and proof of ongoing financial security.
  • Other—Emergency response planning and safety, permit duration, facility abandonment, and enforcement should all be addressed in a solar ordinance.

More information about these requirements can be found in Sections 3 and 4 of this publication series.

Other Topics that May Be Addressed in a Solar Ordinance

  • Utility line placement—Some municipalities require lines to be underground.
  • Site lighting—Artificial lighting is generally not permitted, except on limited equipment, due to a desire for dark sky environments in rural areas.
  • Tree cutting—Some ordinances limit maximum tree removal for GSSD.
  • Property operation and maintenance provisions—Most municipal ordinances require periodic grass mowing for properties within a township. A solar ordinance should address how this relates to GSSD. An outcomes-oriented regulation can be useful here—for example, stating that an operator must maintain a certain standard for pollinator habitat or a certain amount of ground cover. It is also wise to include a built-in remedy for failure to maintain the lease acreage. The use of grazing animals for vegetation maintenance can be an effective approach as well.
  • Protection of productive soils—Some municipalities specify that only a certain percentage of class I or II soils on a parcel may be occupied by panels. These are the soils that the U.S. Department of Agriculture has found to be most productive for agriculture.
  • Agrivoltaics—Some municipalities require that new GSSD projects include provisions for the combination of farming—whether grazing, pollinators, or vegetable growing (see Section 5)—and GSSD.
  • Noise and vibration—A municipality should make sure that they have current limits on noise and vibration. An ordinance may address sound at the fence line. A noise study may be required.
  • Repowering—A solar ordinance should specify whether repowering—the process of upgrading or updating the power-generating equipment on a site—requires a new or updated zoning project review.
A large solar array viewed from the back, with overhead electrical wires and poles. Credit: Christopher PB/Shutterstock.com

Credit: Christopher PB/Shutterstock.com

Future-Proofing a Solar Ordinance

Municipalities should attempt to “future-proof” their solar ordinances. Given the recent rapid changes in solar technologies and project designs, it’s wise to include general, forward-looking language that allows the municipality to be a leader rather than a follower in GSSD permitting. Including future-proofing language will help municipalities to write a solar ordinance today that’s still relevant in 10 years.

For example, one Pennsylvania city zoning ordinance states that a solar collection system is “a panel or other solar energy device, the primary purpose of which is to provide for the collection, inversion, storage, and distribution of solar energy for electricity generation, space heating, space cooling or water heating.” The bolded words (emphasis added) reflect potential forward-looking trends in the GSS industry. The city has allowed for these innovations in its ordinance.

Another example is that a new ordinance under consideration today should spell out the locality’s requirements around battery storage at GSS sites. More GSS sites are being built with batteries, which allow the storage of energy, because solar energy production does not always match energy demand. Even if a permit application doesn’t include plans for battery storage, the operator may want to add it later, so it’s helpful if the municipality’s requirements for this are already spelled out in the ordinance.

Another hot topic is community-owned solar, in which local residents pay a monthly fee to receive electricity from a shared solar facility. Community solar is not yet legal in Pennsylvania, but the state legislature may change that. Uses of solar power are changing, as is the typical size of projects, and ordinances should address how foreseeable changes will be handled.

Solar panels under a blue sky with light clouds. Credit: Magic K, Pexels, CC

Credit: Magic K, Pexels, CC

Ordinances Are Evolving
Despite developers’ preference that all solar ordinances be the same, some municipalities are pushing on the standard terms to make GSSD more environmentally sustainable and to counter concerns about the loss of farmland.

For example, the solar ordinance in Montour County, Pennsylvania, limits development of class I and II soils for GSS to 75% of those soils on a parcel of land. However, if the site plan includes agrivoltaics—the colocation of GSS panels and a farming use—100% of a site can be developed for GSS. The ordinance requires no-till, shade-tolerant crops, and the use of an erosion and sedimentation plan or best management practices for stormwater management. Vegetation may be cut or grazed no less than 4 inches tall. The use of chemical fertilizers and herbicides is limited to meeting the agronomic needs of the crops.

Montour County’s solar ordinance was enacted in conjunction with a solar overlay district that follows the proximity to high tension powerlines. A potential project is judged to lie within the overlay district even if only some of the proposed area for development is within the overlay district.

Another example, from farther afield, Stearns County in Minnesota requires that all new ground-mounted GSSD be certified as pollinator habitat. Doing so helps to ensure that projects meet the county’s stormwater standards.

Black-eyed Susans in foreground with solar array behind and a farm field and farm building behind that. Credit: Werner Slocum/NREL, 65601

Credit: Werner Slocum/NREL, 65601

Examples of Recent Solar Ordinances in Pennsylvania

Below are some recently updated zoning ordinances or guidance that can serve as examples for communities looking to codify their approach to zoning GSSD sites.

Conclusion

The potential pace of GSSD in the next decade has been compared to building the entire coal economy in 10 years. But GSSD may not fit with every community’s development plans. Communities would do well to consider whether GSSD fits with their plans before a developer shows up. If a community wants to benefit from the expected economic infusion from GSSD, community leaders should define their terms before a project is proposed. Developers want predictability and stability as defined by an up-to-date solar ordinance. Having requirements spelled out will reduce the time and cost needed for municipalities to assess GSSD proposals. may flow to communities that signal that they’re ready for this expanding energy infrastructure. Requirements can be strict, but it’s most important that they’re clear.

For More Information

Are You Solar Ready? 2020. American Planning Association. https://www.planning.org/planning/2020/mar/are-you-solar-ready/

Best Practices at the End of the Photovoltaic System Performance Period. 2021. U.S. Department of Energy, National Renewable Energy Laboratory. https://www.nrel.gov/docs/fy21osti/78678.pdf

Best Practices for Operation and Maintenance of Photovoltaic and Energy Storage Systems, 3rd ed. 2018. U.S. Department of Energy, National Renewable Energy Laboratory. https://www.nrel.gov/docs/fy19osti/73822.pdf

Chapter 102 [stormwater] Permitting for Solar Panel Farms, Frequently Asked Questions (FAQ). 2021. Pennsylvania Department of Environmental Protection. https://www.dep.pa.gov/Citizens/solar/Pages/Developers.aspx

Cumberland County Solar Energy Systems Model Ordinance. 2011. Cumberland County Planning Department. https://www.cumberlandcountypa.gov/DocumentCenter/View/7947/final-solar-4-19-11?bidId=

Federal Aviation Administration Policy: Review of Solar Energy System Projects on Federally-Obligated Airports. 2021. https://www.federalregister.gov/documents/2021/05/11/2021-09862/federal-aviation-administration-policy-review-of-solar-energy-system-projects-on-federally-obligated

Local Government Guide for Solar Deployment. 2022. U.S. Department of Energy, Solar Energy Technologies Office. https://www.energy.gov/eere/solar/local-government-guide-solar-deployment

Montour Approves Revised Solar Ordinance. Sept. 15, 2021. Daily Item. https://www.dailyitem.com/news/montour-approves-revised-solar-ordinance/article_5eb061fa-159b-11ec-a0f5-af353955a957.html

New York Solar Guidebook for Local Governments. 2020. New York State Energy Research and Development Authority (NYSERDA). https://www.nyserda.ny.gov/solarguidebook

Planning and Zoning for Solar Energy Systems: A Guide for Michigan Local Governments. 2021. Michigan State University Extension. https://www.canr.msu.edu/resources/planning-zoning-for-solar-energy-systems-a-guide-for-michigan-local-governments

Planning for Utility-Scale Solar Energy Facilities. 2019. American Planning Association. https://www.planning.org/pas/memo/2019/sep/

Regulating Solar Systems at the Source, Common Elements of Solar Ordinances in Pennsylvania. M. Badissy. Penn State Extension webinar. June 17, 2020. https://psu.mediaspace.kaltura.com/media/Utility+Scale+Solar+DevelopmentA+Webinar+on+6-17-20/1_8gxiisrr

Solar@Scale: A Local Government Guidebook for Improving Large-Scale Solar Development Outcomes. 2021. American Planning Association. https://www.planning.org/publications/document/9222548/

Solar Energy Resources for Government Officials. U.S. Department of Energy, Solar Energy Technologies Office. https://www.energy.gov/eere/solar/solar-energy-resources-government-officials

Solar Field Law Experts Giving Municipalities Lessons in Handling Impending Boom of Large-Scale Solar Farms. Lehigh Valley Regional News. Aug. 2, 2022. https://perma.cc/7X3B-HKLN

SolSmart. U.S. Department of Energy, Solar Energy Technologies Office. https://solsmart.org/

Utility-Scale Solar: Land Use, Policy, and Emerging Ordinances, An Interactive Q and A Webinar. M. Badissy. Penn State Extension webinar. Sept. 23, 2020. https://extension.psu.edu/utility-scale-solar-land-use-policy-and-emerging-ordinances-an-interactive-q-and-a

Zoning for Solar and Wind Energy Systems. 2019. WeConservePA. https://conservationtools.org/library_items/971- Zoning-for-Solar-and-Wind-Energy-Systems

Glossary
Notes

Problems Raised by Having Only Limited Guidance

PA Solar Ordinances: Local Regulation and National Trends. M. Badissy. Penn State Solar Law Symposium. 2021. https://aglaw.psu.edu/wp-content/uploads/2021/07/PSU-Solar-Law-Symposium-Day-2-session-5-Badissy.pdf

 

“U.S. Department of Energy researchers have found that the total price of installation is higher by $0.64–0.93 per watt for jurisdictions having the most onerous zoning restrictions versus those having most favorable regulations.” (in Problems Raised by Having Only Limited Guidance)

How Much Do Local Regulations Matter? Exploring the Impact of Permitting and Local Regulatory Processes on PV Prices in the United States. Burkhardt, J. et al. Lawrence Berkeley National Laboratory, U.S. Department of Energy. 2014. https://emp.lbl.gov/publications/how-much-do-local-regulations-matter

 

“Research from the U.S. Department of Energy’s National Renewable Energy Lab shows that communities that address solar in their codes have more installed solar per capita.” (in Local Regulation)

Are You Solar Ready? 2020. American Planning Association. https://www.planning.org/planning/2020/mar/are-you-solar-ready/

 

“Establishing specific guidance at the local level helps” by … (in Local Regulation)

PA Solar Ordinances: Local Regulation and National Trends. M. Badissy. Penn State Solar Law Symposium. 2021. https://aglaw.psu.edu/wp-content/uploads/2021/07/PSU-Solar-Law-Symposium-Day-2-session-5-Badissy.pdf

 

Content of Solar Ordinances

Solar Ordinance Development. R. Davidson. WeConservePA. 2022. https://vimeo.com/700912716

Regulating Solar Systems at the Source, Common Elements of Solar Ordinances in Pennsylvania. M. Badissy. Penn State Extension webinar. June 17, 2020. https://psu.mediaspace.kaltura.com/media/Utility+Scale+Solar+DevelopmentA+Webinar+on+6-17-20/1_8gxiisrr

 

“The Pennsylvania Department of Environmental Protection (DEP) has posted a list of frequently asked questions (FAQ) about stormwater management related to GSSD.” (in Content of Solar Ordinances)

Source: Chapter 102 Permitting for Solar Panel Farms, Frequently Asked Questions (FAQ). 2021. Pennsylvania Department of Environmental Protection. https://www.dep.pa.gov/Citizens/solar/Pages/Developers.aspx

 

“Artificial lighting is generally not permitted, except on limited equipment.” (in Content of Solar Ordinances)

Solar Ordinance Development. R. Davidson. WeConservePA. 2022. https://vimeo.com/700912716

 

“It is also wise to include a built-in remedy for failure to maintain the lease acreage.” (in Content of Solar Ordinances)

Navigating the Leasing Process of Utility Scale Solar in Pennsylvania—Understanding Key Lease Terms. H. Duer. Penn State Extension Webinar. August 18, 2021. https://extension.psu.edu/navigating-the-leasing-process-of-utility-scale-solar-in-pennsylvania-understanding-key-lease-terms

 

“Some municipalities specify that only a certain percentage of class I or II soils on a parcel may be occupied by panels.” (in Content of Solar Ordinances)

Utility-Scale Solar Development and Local Government. T. Murphy. Penn State Extension Webinar. Jan. 18, 2022.

 

“A municipality should make sure that they have current limits on noise and vibration.” (in Content of Solar Ordinances)

Utility-Scale Solar: Land Use, Policy, and Emerging Ordinances, An Interactive Q and A Webinar. M. Badissy. Penn State Extension webinar. Sept. 23, 2020. https://psu.mediaspace.kaltura.com/media/1_1j2si5jk

 

Repowering (in Content of Solar Ordinances)

Planning & Zoning for Solar Energy Systems. A Guide for Michigan Local Governments. W. Beyea et al. Michigan State University. 2021. p. 21. https://www.canr.msu.edu/resources/planning-zoning-for-solar-energy-systems-a-guide-for-michigan-local-governments

 

Future-proofing a solar ordinance (in Content of Solar Ordinances)

PA Solar Ordinances: Local Regulation and National Trends. M. Badissy. Penn State Solar Law Symposium. 2021. https://aglaw.psu.edu/wp-content/uploads/2021/07/PSU-Solar-Law-Symposium-Day-2-session-5-Badissy.pdf

 

Montour County’s solar ordinance (in Ordinances Are Evolving)

Solar Ordinance Development. R. Davidson. WeConservePA. 2022. https://vimeo.com/700912716

Montour County, Pennsylvania, Zoning Department. Solar Energy Systems Zoning Amendment. 2021. http://www.montourco.org/SiteCollectionDocuments/1%20of%202021%20Solar%20Development.pdf

 

“Farther afield, Stearns County in Minnesota requires that all new ground-mounted GSSD be certified as pollinator habitat.” (in Ordinances Are Evolving)

Are You Solar Ready? 2020. American Planning Association. https://www.planning.org/planning/2020/mar/are-you-solar-ready/

Disclaimer and Funding

By Thomas B. Murphy, Director, Penn State Marcellus Center for Outreach and Research, and Joy R. Drohan, Eco-Write, LLC

Web design by Bernd J. Haupt. PDF design by Patricia Craig.

This material is based upon work supported by the United States Department of Energy, Office of Energy Efficiency and Renewable Energy, under State Energy Program Award Number DE‑EE0008293.

This material was prepared with support and funding of the Pennsylvania Department of Environmental Protection (DEP) and the US Department of Energy’s (DOE) State Energy Program. Any opinions, findings, conclusions, or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the DEP or DOE. This report was prepared as an account of work sponsored by an agency of the U.S. Government. Neither the U.S. Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the U.S. Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the U.S. Government or any agency thereof.

Additional support provided by the Penn State College of Agricultural Sciences, the Penn State Marcellus Center for Outreach and Research, and the Penn State College of Earth & Mineral Sciences.

Please contact Tom Murphy with questions about Solar Energy.

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