Letter to the Editor: TN Solar vs. Other States 

You never know what you will find in the fine print or buried in the last pages of a report.

With solar facilities being a topic that seems to pop up more and more, I was curious about any regulations there might be, what happens when a facility is no longer in operation, and what the decommissioning law was that Tennessee had passed. I started with the Report of the Tennessee Advisory Commission on Intergovernmental Relations Sept 2023 (www.tn.gov/tacir) report and this is what I found: Page 45 gives a summary of Decommissioning and Financial Assurance Laws from other states. Nineteen of the 23 require solar project owners to submit a decommissioning plan to an entity other than the landowner. Fifteen require financial assurance be provided to a state agency or a local government.

Buried on pages 169 -177 are the details of what these States require. Some like North Dakota, Ohio, Vermont, and Virginia, require financial assurance be secured before the solar facility can be given approval or go into operation. Some require decommissioning plans to be submitted along with site plans for approval. All but two give authority to State or Local governing bodies  for oversight of these projects. These governing bodies can issue fines of up to $25,000 a day, file civil penalties which may cause imprisonment for not more than one year, and some have the authority to enter the solar facility without permission and remove all solar assets and initiate proceedings to recover cost of removal.

The decommissioning plan, and an accurate cost estimate is crucial, because it is what the financial assurance is based on. In Kentucky, the amount is calculated by an independent licensed engineer. Texas and Montana, where salvage value is also considered in the decommissioning cost, the value of scrap is also calculated by an independent third-party professional engineer, licensed in that state.

Tennessee passed a State Decommissioning Law  and you can read the summary on pages 41- 43 of the TACIR report. In Tennessee, the lease agreement is between the land owner and the solar company. The decommissioning plan, and the financial assurance is given to the land owner. No requirement of an independent, third-party professional engineer licensed in this state providing the estimates, or the solar companies being responsible for getting these estimates.  Page 42 of the TACIR report lays out how the scrap value at the 10-year mark may mean that no more financial assurance is required from the solar company, and at the time of decommissioning, if scrap value is greater than decommissioning cost, then the land owner may be responsible for removal. TACIR  pages 164-167 detail what is involved in the removal of the solar facility, like hand removal and stacking of panels, (there are 163,842 panels on the site plan for the Peavine Road project) cranes for lifting transformers, jackhammers to bust up concrete, and a fence roller. There is an itemized list for decommissioning cost and estimated scrap values.

When the solar company owns the land, the decommissioning plan and assurance is not mandatory. Silicon Ranch owns property across the State, and their website states they will repower or remove and recycle in 40 years. BUT, it is common for them to lease the property to an LLC. (SR Middleton LLC, SR Clarksville II, SR Clarksville LLC, SR Jackson, etc.). Will Silicon Ranch be responsible for the decommissioning, or will there be a separate agreement between the two parties?

In Tennessee any disagreements between land owners and solar are resolved in the court system.

Estimates for decommissioning a solar facility range from $100,000 – $300,000 per MW.

Tennessee and Texas are the States that do not give authority to local governing bodies for oversight of solar projects. The TN Senate Bill NO 1925, (3) (d) “This section does not prohibit a local government from regulating solar power facilities pursuant to its zoning authority granted in title 13, except that a local government shall not impose removal or restoration obligations or require financial assurance securing such obligations that are more stringent than or additional to those provided for in this section.” 

The solar industry is heavily subsidized by Federal dollars. On pages 185 -191, you can see a list of grants, loans, programs, etc. available to the Solar industry. The Empowering Rural America (ERA) is a program with grants, two percent loans, refinancing, but, “NO SINGLE AWARDEE MAY RECEIVE MORE THAN $970 MILLION”. There will be changes in administrations over the next 40 years. How long will these programs last? 

So how do you think Tennessee did versus other States in protecting current and future landowners?

TACIR page 43, “Because the law went into effect on June 1, 2022, and no facilities subject to it have yet been decommissioned, the Commission could not evaluate its effectiveness at protecting landowners.”

Read the report. Read the fine print on those lease agreements, and maybe follow the advice given somewhere in that report and consult with an attorney who is knowledgeable with the solar industry.

Karen Clayton

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