It was inevitable. This week the United States rejoined the world's nuclear energy club, after a 30-year hiatus during which our dependence on foreign oil skyrocketed. President Obama announced $8 billion in loan guarantees for two new reactors to be built in Georgia, the first of many that will follow. Nuclear is back.
Wind power is actually a form of solar energy, since winds are caused in large part by the uneven heating of the atmosphere by the sun. Thus, wind energy follows the solar energy discussion in this Future Interests blog series. Wind-generated electricity is the fastest-growing source of energy in the United States and is creating many new legal and law-related job opportunities.
How Wind Power Generates Legal Jobs
Thousands of wind farm projects are currently under construction, to add to the 35,000+ already in existence. Construction of transmission and distribution systems to get the electricity wind farms produce to the power grid and, in turn, to consumers, is now underway nationwide.
The American Recovery and Reinvestment Act (ARRA), Pub. L. 111-5, is spurring this development through the following programs:
- On July 29, 2009, the DOE released two loan guarantee program solicitations for (1) innovative technology projects (including commercialization of projects that employ innovative energy efficiency, renewable energy, and advanced transmission and distribution technologies), and (2) electric power transmission infrastructure investment projects.
- On July 31, 2009, the U.S. Department of Treasury began accepting applications for the grant program which allows wind farm developers to receive an equivalent cash grant in lieu of the Investment Tax Credit.
- On August 14, 2009 the U.S. Department of Energy (DOE) and the Internal Revenue Service began accepting applications for the 30% Manufacturing Investment Tax Credit provided for in ARRA. The credit is available for manufacturers of wind turbines and equipment to establish, re-equip or expand manufacturing facilities.
- Long-term extension of the wind energy production tax credit,
- Expansion of DOE R & D and deployment funding, and
More is coming. Wind power is perceived by both political parties to be an essential component of our drive towards energy independence. For example, the American Clean Energy Leadership Act (S.1462) is a bipartisan bill that the full Senate is likely to consider very soon. It would establish a 15% renewable electricity by 2020 standard, establish a Clean Energy Investment Fund, establish the Clean Energy Deployment Administration, a new federal agency, and launch a massive national transmission grid project, among other provisions. Roughly similar legislation has passed the House of Representatives.
State and local governments have also jumped on the wind energy incentives – and regulatory – bandwagons. The imposing presence of wind farms is causing municipalities around the country to enact legislation and ordinances designed to regulate them. Consequently, wind law is very much a collection of incentives and regulations emanating from every governmental level. This makes it an exciting legal practice opportunity for attorneys from large firms to solo practices.
In addition, advancing technology is rapidly making wind power cost-competitive with fossil fuels. The closer the two resources come in terms of cost, the more legal career possibilities will emerge and grow.
The U.S. has enough wind resources to generate electricity for every home and business in the nation. But not all areas are suitable for wind energy development. Where the wind power industry jobs are likely to be concentrated depends on where the wind is the strongest, with land use restrictions, environmental constraints, and public opposition thrown into the equation. The latter factor is very difficult to measure, and itself depends on a multitude of variables, such as political clout, whether the opposition is spearheaded by the moneyed elite, and so forth.
The government's National Renewable Energy Laboratory has produced a wind power map that is useful to incorporate into decisions about where to look for wind energy job opportunities. My analysis of both the map and the other two factors (land use and environmental limitations) subject to reasonable analysis at this time leads me to the following conclusions about where to locate, grouped hierarchically from best to second-best, etc.
- Pacific Coast - Southwest Oregon & Northern California; Offshore Maine, New Hampshire & Massachusetts
- Pacific Coast – Central and Southern California; Michigan; Atlantic Coast from Maine to South Carolina
- Rustbelt from roughly Syracuse, NY along the Lakes Ontario and Erie shores to Cleveland, OH; Gulf Coast – Southeast Texas; Upper Great Plains (North Dakota, South Dakota, Montana); Nebraska; Wyoming
However, this is not the end of the analysis. It is also important to factor in the places where the wind energy industry is the farthest advanced at present, as well as the locations where the most current activity is occurring. The top current wind power producing states (in descending order by megawatts [MW] of production) are: Texas, Iowa, California, Washington, Minnesota, Oregon, Illinois, New York, Colorado and North Dakota. The states with the most projects under construction (in descending order by number of current projects) are: Illinois, Oregon, Wyoming, Texas, Utah, California, Oklahoma, Missouri and West Virginia.
You also want to be on the lookout for offshore wind farm development in the shallow ocean and Great Lakes regions, where there is always a lot more wind than onshore. Michigan, bounded by three huge bodies of water (Lakes Michigan, Huron and Superior) actually produces more wind than any other state and aspires to pin its economic diversification and revival hopes to a large extent on wind energy development. Massachusetts, embroiled in a lengthy dispute over locating massive wind farms in the shallows off Nantucket, would like to do the same.
Wind Energy Law
Wind energy attorneys handle a wide range of issues, some rather exotic. Developing a wind energy project to completion is a very complex process, involving such specifics as the preparation of wind lease and easement agreements, option agreements, crossing agreements, access, transmission, collection system and non-obstruction easements; analyzing and resolving legal, title and survey issues; preventive law with respect to potential future challenges to wind farm operation; interacting with project lenders and tax equity investors to coordinate real estate instruments, governmental approvals, surveys, title policies, and legal opinion letters necessary to close deals; and advising clients regarding regulations and tax issues.
Wind lawyers also advise independent energy providers on siting and developing wind power projects. They assist with site and environmental assessments; wind real estate transactions; permitting; interconnection, transmission and distribution; power purchase agreements; construction and design; mergers and acquisitions; wind project due diligence, Endangered Species Act matters; eminent domain and condemnation issues; wind turbine and related equipment procurement; public lands usage; project finance; and dispute resolution. They interact with regulators and respond to regulatory inquiries. They lobby legislators and regulators with respect to industry concerns. They negotiate for their clients (internal and external) regarding major obstacles to wind farm projects such as passage for birds, wildlife impacts, aesthetic objections by local citizens, interference with communications devices, tower height limits, and setback requirements.
The University of Texas Law School began offering the nation's first-ever Wind Law course in 2008, and now offers a Continuing Legal Education Course (online) on Wind Energy and Turbines.
Law firms and sole practitioners, concentrated in those areas of the U.S. mentioned above, are actively creating and expanding their wind energy law practices. Utilities are also major employers of wind energy legal specialists. Wind energy developers and operators also hire attorneys. Government regulators and agencies offering incentive programs at the federal and state levels also employ attorneys cognizant of wind law issues. A number of advocacy and public interest groups also have wind energy experts on their staffs, e.g., Go Green! Clean Energy Challenge, Clean Energy Partnership, Clear the Air, Environmental Defense, Natural Resources Defense Council, and the Sierra Club.
Wind power law is also generating opportunities for regulatory compliance positions and individuals to negotiate and manage wind power project land and related rights agreements across the entire wind energy industry.
For Further Information
- Energy Bar Association
- Federal Energy Regulatory Commission
- Environmental Protection Agency
- National Association of Regulatory Utility Commissioners
- National Association of State Energy Officials
- Wind Powering America
- Edison Electric Institute
- Electric Power Research Institute
- Directory of Wind and Renewable Energy Companies and Products Worldwide
Next: Careers in the Sustainable World VI: Nuclear, the Comeback Kid
Every minute the sun transmits enough light to Earth to supply the entire planet's electricity needs for an entire year. Solar power is the ultimate renewable energy resource (good for at least the next 10 billion years). Its advent as a major satisfier of our energy requirements is inevitable. And that means legal job opportunities.
The State of the Solar Market
Solar energy is still very much in a germinal stage of development. Fossil fuels (oil, natural gas, and coal) currently provide over 80 percent of all energy usage; solar around 1 percent.
However, solar is growing by approximately 30 percent per year, spurred by six factors in addition to the limitless nature of the resource:
- The drive for energy independence;
- The environmental costs of carbon fuels;
- Decreasing prices for solar panels and installation costs;
- Rapid increases in corporate and venture capital investment due to vast growth opportunities;
- Broad public support (75 percent in a recent poll); and
- Broad government endorsement and stepped-up financial incentives (both federal and state) for solar companies as well as residential and commercial customers.
Techcast.org says that "greentech" could be the largest business opportunity of the 21st Century, and solar is predicted to play a central role in this. Experts believe that solar prices will be competitive with oil by 2012 to 2015.
A January 2010 forecast by MIT's highly respected Technology Review says that the U.S. solar market will double in the next year, thanks to lower prices and government incentives. The article goes on to say that, in a few years, the U.S. is likely to become the world's largest solar power market, eclipsing Germany.
In the second half of 2009, solar panel prices dropped 40 percent. The megawatts of solar energy systems installed last year grew by 25 to 40 percent, according to the Solar Energy Industry Association. A standard 5 kilowatt residential system now costs $16,000 (down from $40,000 in 2008 after state incentives are applied). The price is predicted to be $13,000 by the end of the year ($25,000 without incentives).
Projects funded through the American Reinvestment and Recovery Act have not yet been launched, but will be in 2010. The Act also contains tax incentives for solar installations and grant money for integrating solar into the nation's electrical grid.
Legislative initiatives providing incentives for solar development are under consideration in both Congress and state legislatures. Several would include a renewable energy standard, which would require utilities across the country to use renewable energy. Another very important potential incentive is a national standard for connecting solar installations to the electric grid. Currently, certain states do not have laws permitting homeowners to connect rooftop solar panels to the grid and receive credit or money for the power they generate. The laws that do exist vary considerably from state-to-state. A uniform national standard could give the solar industry a major boost.
In sum, the outlook for solar has never been brighter (pun intended).
The Legal Environment of Solar
Many solar company projects get slowed down by regulations, land-permit requirements, and the lack of transmission lines to connect to the electrical grid. Projects located close to substations do better than solar farms that require new transmission lines. These deficiencies actually are good news for attorneys, since it necessitates a lot of legal work to overcome these obstacles.
Solar projects are subject to a complex matrix of real property laws and issues, regulatory and permitting requirements, interconnection matters, power purchase negotiations, financing problems, tax planning and execution, and construction contracting, among others.
Here is a selection of legal matters that solar energy lawyers handle:
- Site rights and requirements for solar projects, including permitting, land use, easements, leases, government (federal, state, and local) siting rules and rights-of-way, Native American tribal rights, and water rights, the purpose being to "lock in" long-term stability (free access to project sites and sun exposure).
- Project documentation, which for solar projects, can be incredibly complex, e.g., "distributed generation" (small-scale power producers close to the point of use) issues where there are conflicting interests between the site host, the project developer, neighbors, and power purchasers (although sometimes the site host and power purchaser are one and the same), as well as between private individuals and entities and government.
- Power purchase and pricing agreements, for which there are many possible variations due to the nature of solar energy, e.g., take-and-pay," output levels, net metering based on possible purchaser sales to a utility, as well as an additional panoply of issues unique to utility-scale projects, which also bring into play a host of environmental issues.
- Contract matters relating to solar system design, engineering services, construction, and installation, including such items as the impact on project launch and cost of contingent federal and state tax credits.
- Solar project financing.
- Regulatory matters, which can vary considerably with the business model, scale, intended use, location, and transmission requirements of the project, and may encompass consideration of numerous federal and state statutes and regulations, e.g., National Environmental Policy Act, Public Utility Regulatory Policies Act of 1978, Energy Policy Act of 1992, Public Utility Holding Company Act of 2005, Energy Policy Act of 2005, and Federal Energy Regulatory Commission and Securities and Exchange Commission regulations.
- Transmission and interconnection considerations.
- Tax issues, e.g., compliance with IRS rules for obtaining the Investment Tax Credit, Treasury Department grants, bonus and modified accelerated cost recovery system depreciation, ownership structuring in order to secure tax benefits; and state and local tax income, sales and use, excise, and property tax matters affecting the project.
- Renewable Energy Certificates, which are tradable, non-tangible energy commodities that represent proof that 1 megawatt-hour of electricity was generated from an eligible renewable energy resource), their role in helping to secure financing; selling them bundled or unbundled; and their markets.
- International issues, e.g., Foreign Corrupt Practices Act, global marketing considerations.
- Technology advances that leapfrog the law, e.g., micro solar cell development, enhanced solar energy storage capabilities, "nanosolar" advances, and smart grid systems, each of which does not fit seamlessly into existing statutory and regulatory regimes.
To date, the federal government has been slow on the solar legal uptake. States have jumped into this vacuum and enacted renewable portfolio standards and state renewable energy tax credits.
Solar energy companies occupy the central position in the broader solar industry. They include manufacturers, R&D firms, installers, financiers, distributors, project developers (such as architectural firms), solar leasing firms, consulting firms, industry suppliers, and research laboratories. A number of companies provide solar services beyond U.S. borders. The Solar Energy Industry Association maintains a Member Directory on its website. See also http://www.solarcompanies.com/.
Law firms have been rushing into alternative energy practices, with solar occupying a prime position. Some of the more significant firms with solar practices include Covington & Burling, Hunton & Williams, Stoel Rives, Shems Dunkiel Raubvogel & Saunders, Van Ness Feldman, Milbank, Tweed, Hadley & McCloy, Pepper Hamilton, Reed Smith, and Fulbright & Jaworski, to name just a few of the many firms that have ginned up solar, renewable, or alternative energy practices, most very recently.
Utilities might potentially be the largest employer of attorneys interested in a solar energy practice. A change in the tax code now permits utilities to take a tax credit for solar investment. Some experts predict that a third of all U.S. solar installations in the next year could come from utilities. The top generators of solar energy among utilities are concentrated in the areas of the country that get the most sunlight, namely the southwest, lead by California, Hawaii, Arizona, and Nevada. The leading utilities are: Southern California Edison, Pacific Gas & Electric, NV Energy, San Diego Gas & Electric, Public Service Company of Colorado (Xcel Energy), Los Angeles Department of Water & Power, Arizona Public Service Company, Kauai Island Utility Cooperative, Maui Electric Company, Hawaii Electric Light Company, Palo Alto Utilities, and the Sacramento Municipal Utility District. Elsewhere, the Public Service Electric & Gas Company of New Jersey, and the Long Island Power Authority have also incorporated solar into their power sources.
Solar energy trade associations have been sprouting up all over. Major ones include:
Solar Electric Power Association, Solar Energy Industry Association, American Solar Energy Society, Midwest Renewable Energy Association, Great Lakes Renewable Energy Association, International Solar Energy Society, Solar Alliance, and the California Solar Industries Association.
Government agencies are increasingly involved in solar regulation, monitoring, contracting and grant-making. They include the U.S. Department of Energy's Solar Energy Technologies Program, Department of Treasury and Internal Revenue Service, Federal Housing Administration, National Renewable Energy Laboratory, Sandia National Laboratories, the U.S. Department of Agriculture's Rural Energy for America Program (REAP), and the Federal Energy Regulatory Commission.
Numerous state solar energy development incentives also exist. Approximately 34 states have enacted legislation or promulgated regulations or programs to promote solar energy.
Educational institutions, such as Humboldt State University's Schatz Energy Research Center, are also becoming involved in solar industry expansion initiatives.
For More Information