By Blake Jackson
Pennsylvania solar developers are shifting their focus to smaller projects, creating opportunities for landowners but raising concerns from utility companies.
Traditionally, large solar arrays spanning hundreds of acres were the norm. Now, developers are proposing projects between 10 and 60 acres. This downsize benefits landowners in two ways:
- Increased Lease Revenue: Compared to renting land to farmers, leasing for solar projects can generate significantly more income.
- Preserved Land for Agriculture: Smaller projects leave a portion of the land available for continued farming.
These reduced-scale solar farms, known as merchant generators, require approval from the Pennsylvania Public Utility Commission (PUC). This is a faster process compared to the lengthy wait times associated with grid operator PJM's approval system for larger projects.
Net metering is a crucial factor for merchant generators. This policy allows renewable energy projects to sell excess electricity back to the utility grid. However, merchant generators, unlike typical net-metered projects (home solar panels or farm digesters), aim to sell all their generated power.
A 2021 Supreme Court case (Hommrich v. Commonwealth) paved the way for merchant generators in Pennsylvania by overriding the PUC's limitations on net metering for such projects. This decision has led to a surge in merchant generator proposals in the state.
Landowners are being actively approached by solar companies seeking land for these projects.
Dual-use solar projects that combine solar energy generation with continued agricultural activity are seen as a win-win situation. Net metering is critical for the financial viability of these projects, according to solar developers.
However, the utility industry and fossil fuel industry are wary of merchant generators. They argue that net-metered solar projects shouldn't receive full retail price compensation for their electricity, especially when their own electricity usage is minimal.
Lawmakers are considering proposals to restrict net metering, potentially hindering the development of merchant generators.
On the other hand, community solar, a system where a solar array supplies power to local subscribers, is not yet legal in Pennsylvania. However, some believe it might be approved in the future.
While the future of net metering and community solar remains uncertain, merchant generators offer a current opportunity for landowners to generate additional income through solar energy projects, while potentially maintaining some of their land for agricultural purposes.
However, careful lease negotiation is crucial to ensure landowners' rights and continued farming activities are protected.
Photo Credit: istock-simplycreativephotography
Categories: Pennsylvania, Energy