Solar’s legal risks are changing. Here’s what to watch out for

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Attorneys Matthew Karmel and Yana Spitzer joined the Factor This! podcast from Renewable Energy World to discuss the legal risks facing the solar industry, and they pointed out the potholes to watch out for in the future. Subscribe wherever you get your podcasts.

As the renewable energy industry has grown up, so have its legal risks.

Sure, the industry frequently bemoans the NIMBY groups fighting project development. But renewable energy projects face far more opposition than simply galvanized homeowners in a Facebook group.

More advanced attacks use litigation to stop or delay zoning and permitting approvals. Others will seek damages due to the environmental impact of construction or the project itself. And even within the industry, an entirely new form of contract litigation is bound to emerge as partners pursue the full value of incentives in the Inflation Reduction Act.

Episode 38 of the Factor This! podcast featured two attorneys working really closely on these issues. Matthew Karmel is the principal and chair of the Environmental and Sustainability Practice Group at the national law firm Offit Kurman. Yana Spitzer is in-house counsel at ENGIE North America.

Karmel and Spitzer take us inside the courtroom for a look at the legal risk plaguing project developers today, and they point out the potholes to watch out for in the future.

"We've got a lot of risks in solar development, especially large-scale solar development. Some of these risks are just the cost of doing business, but some of them are risks that we can manage and avoid," Karmel said.

An (un)friendly foe: NIMBYs

The most familiar legal threat to the solar industry is the persistence of not-in-my-backyard (NIMBY) community opposition.

Typically, these challenges hinge on technicalities, like an incomplete zoning or permitting application. And while these errors can normally be fixed by refiling an application, they can lead to project delays, added costs and, potentially, a change in tune from a regulatory board or commission.

"I try to advise my developers who go out in the field to make friends with the homeowners that they're approaching in order to obtain site control and get the feel of the neighborhood to see how much challenge we may face when going for permitting or approvals needed prior to construction so that it's not a surprise to us," Spitzer said.

Take, for example, the 1.3 GW Mammoth Solar project under construction in Indiana. Once complete, Mammoth is expected to be the largest solar project in operation in the U.S.

A group of homeowners who resided within one mile and/or owned property within a few hundred feet of a proposed solar farm petitioned for judicial review of a decision of the county board of zoning appeals (BZA), which approved the application for construction.

Opponents of the Mammoth project say they are defying an “egregious assault on time-honored farming traditions and are standing up to a newcomer that threatens to warp their pastoral way of life with Chinese-made technology.”

The disgruntled homeowners were able to convince both the trial and appellate court that the zoning application for the Mammoth project failed to comply with the minimum requirements of the Unified Development Ordinance, that the BZA should not have considered or acted on Mammoth Solar's incomplete application, and, that by disregarding the UDO's requirements, the BZA's actions were arbitrary and capricious, not in accordance with the law, and without observance of procedure required by law.

Challenges like the one that faced Mammoth Solar developer Doral Renewables are procedural in nature and (usually) won't kill a project. But the bump in the road could result in further delays and additional costs, and those delays and costs can sometimes be fatal.

GO DEEPER: Listen to Episode 20 of the Factor This! podcast: "Clean energy is popular but NIMBYism remains

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