Is America’s solar industry in the dark about a shining opportunity?
Brightfields, defined by the U.S. Department of Energy as solar development on brownfields (contaminated land or closed landfills), have become increasingly attractive to project developers diversifying away from traditional rooftops and greenfield locations.
Two motivators drive this trend: first, location. Brownfields have few other viable uses, but may be close to high-capacity interconnection points in industrial zones. Second is incentives. Federal, state and local governments offer specific incentives to improve brightfield project economics and help hedge against uncertain solar valuation policies.
Location, location, location
This commonly quoted axiom applies to brightfields as much as real estate development. The U.S. Environmental Protection Agency (EPA) has prescreened more than 80,000 brownfields and contaminated lands for renewable energy development, and the National Renewable Energy Laboratory (NREL) estimates that landfills and other contaminated sites cover 15 million acres across America.
Former industrial sites are frequently cleared of their above-ground structures during environmental remediation, providing large, flat and unshaded areas ideal for PV systems. Substantial electricity grid infrastructure suitable for low-cost interconnection is often close to the site and, in many cases, brownfields are nearby other energy-intensive consumers like refrigerated warehouses or factories, creating behind-the-meter potential for commercial and industrial customers.
America’s estimated 10,000 closed and capped landfills under public and private ownership have few complementary uses and little or no long-term income potential for owners. Typically elevated above the surrounding countryside, landfills offer unshaded sites for PV systems, a new source of lease revenue for landfill owners, and property-tax revenue for municipalities.
Government incentives improve appeal
State and local governments can be eager to return closed landfills and brownfields to productivity, and as such, many offer streamlined permitting and zoning or tax incentives to improve revenue streams and investor attractiveness.
For instance, Massachusetts’ solar renewable energy credits (SREC) program ties additional value to energy generated by preferred locations. Solar generation on eligible landfills or brownfields receives the third-highest incentive levels available under the state’s SREC II program, making brightfield generation more valuable than greenfield or commercial rooftop output.
Government incentives also stretch beyond financial valuation into professional services. New York City’s Brownfield Partnership connects developers to engineers, planners, analysts, and environmental consultants and attorneys for free consulting on liability and remediation. Oakland, California offers risk-based project standards and a revolving loan fund to assist with remediation.
But watch the permitting process
While brightfield projects can benefit from government involvement, they generally require permits and approvals from federal, state and local agencies not typically involved in greenfield or rooftop solar project sites. For example, brownfields may be Superfund sites, which means the challenge of dealing with the U.S. EPA.
Developers should approach this task by recruiting consultants with experience of the required permits, tests and inspections. It’s going to be a lengthy, time-consuming, and relatively expensive process anyway, so tapping knowledge of the process can be more cost-effective over the long term.
Experienced recruits can assess, quantify and resolve potential contamination and remediation concerns -- these should be first and foremost in a developer’s mind. It’s impossible to overstate the importance of understanding each site’s unique environmental situation and the consequential impacts to project cost, scope and timeline. A "typical" brightfield project doesn’t exist.
Significant contamination may exist, and site records may have gaps or may not even exist at all, so developers should start with thorough research. Determine what the site was used for, what remediation has occurred, if those measures have fallen into disrepair, and what long-term obligations remain in place. While EPA and state agencies maintain extensive brownfields lists, landlords and municipalities may have additional pertinent records.
After identifying a promising site, conduct a Phase I environmental site assessment performed by a suitably licensed and experienced professional. This involves reviewing existing records and interviewing owners or occupants, possibly supplemented with additional sampling and testing, to provide a full picture of the site’s history and current condition.
Extended timelines
Developers must also keep project timelines in mind -- this cannot be underestimated for brightfield projects. Site assessment, system design, construction planning, and securing the necessary permits and approvals may take between 18 months and four years before the project is shovel-ready. Once begun, construction may also be longer than normal expectations.
Extended project development timelines also create project economics questions. Solar equipment and construction costs have fallen over the past 10 years, but will this decline continue? How might benefits and economic incentives change over time? Will capped incentive programs expire or fill up? Regularly revisiting project economics and feasibility is important, especially with long-duration brightfield development timelines.
Unique conditions
Once project design and construction planning begins, proper installation and safety practices take paramount importance. The need to avoid disturbing subsurface contaminants is common at many brightfield locations, often preventing developers from penetrating the ground with posts for racking or digging trenches for electrical conduit and wiring.
In the past this demanded a high degree of equipment customization. But today, ballasted racking and wire management systems, rack-mounted string inverters, and prewired or skid-mounted central inverters, transformers and switchgear can all facilitate installation.
In some cases, additional personal protective equipment, dust control, pollution monitoring, contaminant handling, segregation and disposal measures may be necessary for worker safety and environmental protection. Workers must understand the risks and rules at each project site, so training, monitoring and construction oversight are key.
Understanding the site’s history, present condition, and the steps and details impacting development, construction and operation quickly and to the greatest extent possible is vital. Armed with the accumulated knowledge, developers should take a hard look at the project’s scope, costs, timeline and risks. In many cases, developers will need to adjust project economics to reflect known realities, and in extreme cases the project may be terminated as a result, so the sooner the better for this adjustment.
High upside for getting it right
Brightfields represent a major opportunity for America’s solar industry; however, they’re inherently challenging projects that require careful and conscientious development. Diligence and pragmatism, coupled with appropriate risk tolerance and proper mitigation strategy, are key to rewarding efficient and effective brightfield development.
Solar developers must be prepared to invest the necessary time and effort to fully and realistically assess brightfield projects, make appropriate decisions based upon assessments, and be willing to recruit subject matter experts wherever and whenever needed. There are no true shortcuts on brightfields, but an informed developer can reap ample rewards by tackling this complex and underserved market segment.
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Steve Goodbody is the senior vice president of operations and engineering at the C&I solar developer Soltage.