Utility-scale solar facilities are an important component of electricity generation and decarbonization in the Commonwealth of Virginia, but few guiding documents are available to support localities’ approach to the decommissioning process.
This report analyzes existing state and local laws, recommendations from state and federal agencies, and approaches in comparable markets to present an inventory of decommissioning best practices for Virginia localities hosting utility-scale solar facilities. The report defines a utility-scale solar facility as any ground-mounted solar photovoltaic (PV) project with the ability to generate 5 or more megawatts (MW) of electricity which is then delivered to the grid for consumption.
Several local policy strategies can protect localities’ financial interests, mitigate unnecessary temporal and fiscal costs to facility owners, and reduce inefficiencies in the decommissioning process:
- Establishing an effective decommissioning ordinance
- Defining a legal framework to enforce decommissioning
- Requesting appropriate forms of financial assurance
- Factoring salvage credit, inflation, and administrative costs
Emerging best practices factor in some portion of the solar hardware’s salvage value, subtracting an appropriate salvage credit from the decommissioning cost estimate. Both the decommissioning cost estimate and projected salvage value should come from a Virginia-licensed engineer rather than a solar developer or facility owner.
The optimal combination of strategies discussed in this report will depend on the characteristics of each solar project. These findings are particularly relevant since researchers predict that over the next two decades, solar energy systems will drive at least 15% of the forecasted 5.9 trillion kWh global increase in new electricity generation from renewable energy sources. The cost of photovoltaic energy is further predicted to decrease through at least 2030, indicating the potential for lower energy costs and higher investment returns. The industry’s projected expansion makes determining how to decommission older facilities in a cost-effective way increasingly important.
For the full report, download the file below.