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5 min read

The Great Land Grab and the Rules that Govern

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The land grab just got more complicated. Welcome to the Wild West 2.0.

We’ve discussed the great land grab before: the crazy race happening across America to find developable pieces of land on which to build large-scale, solar farms and wind farms, implement green battery storage, and positively impact the grid. And trust us, today’s grid could use a lot of positive impacts.

After all, the amount of fossil fuel-based energy production on which the United States still relies is impressive. According to the U.S. Energy Information Administration, “Fossil fuels—petroleum, natural gas, and coal—accounted for about 79% of total U.S. primary energy production in 2021.”

By contrast, all types of renewable energy together comprised only 12 percent of electricity generation strategies. Nuclear power accounted for an additional 8 percent, leaving Americans with no choice but to support the extraction, processing, and use of fossil fuels.

While such energy sources are critical now, they won't last forever. Most people recognize this today, which is why “69% of U.S. adults prioritize developing alternative, clean energy sources, such as wind and solar, over expanding the production of oil, coal and natural gas,” says the Pew Research Center. “The same share (69%) favors the U.S. taking steps to become carbon neutral by 2050.”

Here at Transect, we second such opinions resoundingly – but like everything else in life, this is easier said than done. Increasing our green energy development to fulfill the needs of the energy transition is a massive overhaul. The required power generation to reach our decarbonization and climate change goals is going to take a bit more work than simply throwing some solar panels in some local communities and calling it a day. We are talking wind turbines and solar project galore and megawatts on megawatts.

However, the land grab is posing challenges to developers across the country. Developers that dream of vast solar plants or transmission lines that cover thousands of square miles are constantly working to find land that complies with the size requirements for the amount of solar capacity they want to general, environmental requirements, and local residents’ sentiments.

Recent rulings have also changed the game, muddying the waters further.

Today, let’s take a look at what those changes are. How do they ease or complexify the race? How will the rapid increase in incentives available at the federal and state levels impact the rate at which land is obtained? And what can you do to stay competitive?

Keep reading to find out.

 

The Great Land Grab

 

Changes to the Land Grab

It’s not actually the land grab that’s changing, per se, but the regulations that govern which pieces of land are eligible for development – and which bring the most benefits to the developer. Right now, we’ve got our eye on four different factors:

  1. Changes to the Clean Water Act via the 2023 Sackett v. Environmental Protection Agency ruling
  2. The push to repeal the Inflation Reduction Act
  3. A final definition for energy communities, as issued by the White House in April 2023
  4. Potential changes to the application of the National Environmental Policy Act (NEPA)

Let’s take a look at these one by one.

The Clean Water Act Wetlands Definition

The Clean Water Act (CWA), first established in 1972, has been on a rollercoaster ever since. It has been through the wringer of no fewer than four different Supreme Court cases, the most recent of which – Sackett v. Environmental Protection Agency– rolled back the definition of wetlands quite a bit.

While it is naturally difficult to sum up an 82-page document, suffice it to say that wetlands protection has suffered under the new definition. Estimates put the number of wetlands that are now without CWA protection somewhere in the 50 percent range.

What this means for developers is that the permitting rules are likely to be messy and confusing for a while. State regulations will also likely change in response to federal slackening of protections. Some states, such as What does this mean? Well it means that utility-scale developers and environmentalists alike are left anticipating a switch up of regulatory requirements once again. As solar power projects are on the rise,, they are entering uncharted waters...get it? Anyway…

How does this impact the land grab? Glad you asked!

As these definitions continue to change, the standards for site selection moving forward will alter. Renewable energy projects already have a fair amount of land use requirements, and regulations play a huge role in that. A new definition for WOTUS could mean that there may be more developable land up for the taking, or that there are more state and regional hurdles to jump through.

We will receive further guidance at some point, but until then, your participation in the land grab will require working with the best possible resources for environmental due diligence.

Potential Repeal of the Inflation Reduction Act

Passed in August 2022 (you know, just last year), with additional guidance following in the months since, the beleaguered Inflation Reduction Act (IRA) – originally the more robustly ecofriendly Build Back Better Act – is already under fire. Conservative lawmakers and lobbyists point to the potential for the act to increase the budget deficit and require America to take on a greater debt load in future.

Such commotion is unfortunate, since the IRA provides billions of dollars in incentives for energy suppliers, from solar developers to the critical USDA Rural Utilities Service, which provides the necessary infrastructure to remote regions of the country. It also provides for environmental justice grants, helping reverse centuries of wrong against Black and brown communities.

If the IRA is reversed during this administration (unlikely) or a subsequent one (more likely), then the tax credits it provides will go with it. For that reason, there’s no time to lose when it comes to identifying land.

 

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Final Definition for Energy Communities

In April of 2023, the White House issued its final definitions for energy communities and their associated tax credits. Areas that meet the “energy community” definition include:

  • Brownfield sites, or areas of land likely to be contaminated due to previous industrial or commercial enterprises that left behind chemicals, pollutants, or hazardous waste
  • Coal communities, or those in which a coal mine or coal-fired power plant has closed
  • Metropolitan or non-metropolitan (urban or rural) statistical areas or tracts in which a certain percentage of employment or taxes were related to fossil fuel development in past

With these official definitions in hand, the right projects are now eligible for the energy communities tax credit, also known as the EC tax credit. That assumes, of course, that you meet the criteria for the investment tax credit (ITC) or production tax credit (PTC). If you wish to receive the full EC amount, you must also satisfy wage and apprenticeship requirements.

Changes in the Application of the National Environmental Policy Act

The National Environmental Policy Act (NEPA) has since the 1970s dictated how we determine the factors that go into permitting and development decisions. The Trump Administration restricted such factors to the “purpose and need” of the developer, stripping power away from regulatory authorities to consider community and environmental needs as well.

The Biden Administration has restored many of those powers, which is critical for hopeful developers to understand, as it will impact permitting.

Get Competitive with Transect’s Help

Each of the above four reasons provides a strong impetus to enter the land race if you haven’t already. However, you can’t be all day about it, or you’re going to get beat out. Neither you nor Mother Earth can afford that.

Our sustainability efforts to support the power grid with wind or solar energy take extensive work. However, it doesn’t mean the environmental due diligence process to find the real estate for your next site should be time-consuming.

Our desktop-ready reports are available in a fraction of the time traditional due diligence is, and for a fraction of the cost as well. This allows you to see whether a parcel is worth it before sinking more time, energy, and resources into it.

Want to learn more about the Land Grab? 

 

 

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