The energy market in New York State (“NYS”) is rapidly changing. Governor Andrew Cuomo has indicated NYS plans to eliminate the use of coal by 2020.1 Since 2000, approximately 2,000 megawatts (“MW”) of coal generation has been retired or suspended operation.2 In addition, the two nuclear reactors at Indian Point Energy Center, which represent 12% of NYS’s total electricity generation, are set to be retired by 2021.3 Driven by the efforts of Governor Cuomo, and the NYS Public Service Commission’s Reforming the Energy Vision (“REV”) proceeding and Clean Energy Standard goals requiring 50% renewable power generation by 2030, the solar industry in NYS is poised for significant expansion. Solar power is set to become a key part of necessary power generation in the State. The Solar Energy Industries Association predicts NYS will install over 3,000 MW of solar capacity over the next five years.4
As the potential for rapid solar development ramps up, some apprehensive local governments are reacting with moratoriums and burdensome zoning restrictions on commercial-scale solar development. This behavior echoes the time when natural gas developers sought to lease large tracts of land for hydraulic fracturing purposes, and municipalities implemented moratoriums and prohibitions on the practice, before it was banned by NYS in 2014. Last year, nearly 90 local governments in NYS enacted moratoriums on solar development as they worked to address questions pertaining to zoning, taxes and fees,5 with several more proposing or enacting moratoriums in 2017.6 Municipal boards and residents have expressed concerns about consistency with comprehensive plans, potential visual impacts of solar farms on their communities, and the loss of agricultural land and green space. Some communities also have fears of being taken advantage of by out-of-state companies. These moratoriums, which often run for nine months or more, threaten to delay, or even kill, solar project development in areas of NYS. In addition, some municipalities are implementing overly restrictive zoning ordinances governing commercial-scale solar development, which can have a chilling effect on development.
LOCAL GOVERNMENT AUTHORITY OVER SOLAR FARMS
NYS is comprised of counties, cities, towns and villages, each of which is granted varying degrees of home rule power emanating from the New York State Constitution, which sets forth a “bill of rights for local governments.”7 Home rule is the power of a local government to exercise the state’s powers of governance pertaining to certain topics within its administrative area. The most powerful tool of local governments to regulate solar farm development is the zoning power granted to cities, towns and villages. In NYS, that zoning power is governed by the following State enabling statutes: General City Law, Town Law, Village Law, General Municipal Law, Municipal Home Rule Law, and Statute of Local Governments.8 Collectively, these statutory and constitutional provisions provide local governments with a variety of tools to regulate solar farm development, including, but not limited to, total prohibition, zoning and permitting processes, program fees, setback and lot coverage requirements, visual impact standards, road repair requirements, and restrictions on hours of operation. When implemented correctly, the drafting of a local law or code containing a clear, predictable path forward for solar facility applications can promote solar development. However, when these ordinances are aimed at slowing or prohibiting the proliferation of these extremely environment-friendly means of generating electricity, or viewed as a source of revenue generation for the municipality, they can have the effect of financially and/or operationally limiting or eliminating solar deployment.
MORATORIUMS AND OVERLY RESTRICTIVE OR PROHIBITIVE ORDINANCES
Most local governments lack comprehensive zoning regulations that pertain to solar operations. As a result, many local governments are in the process of adopting local laws that establish temporary moratoriums on the processing and approval of zoning applications for solar energy production facilities until the local government can determine suitable locations, dimensional requirements, and other procedural and substantive rules pertaining to solar farm development.9
A land use moratorium is a temporary suspension of a landowner’s right to obtain zoning approvals and/or building permits while a local government considers and potentially adopts changes to its land use regulations. In the solar farm context, local governments may enact moratoriums to prohibit solar development, but these ordinances are only a temporary solution. Either by their own initiative, or by court order, local governments must finalize their zoning plans. The word “moratorium” is not mentioned in the New York State Constitution or legislative statutes, but courts have generally upheld local moratoriums as long as they (1) are limited by a reasonable time frame, (2) have a valid public purpose, (3) address a situation where the burden imposed by a moratorium is being shared by the public at large, (4) strictly adhere to the procedure for adoption in the Municipal Home Rule Law or zoning enabling acts, and (5) have a time certain when the moratorium will expire.10
Once a local government moves from its moratorium to a finalized ordinance, the ordinance may contain extremely restrictive provisions, or explicitly prohibit solar development. Some new solar codes contain significant burdens such as substantial fee and bond requirements, minimal lot coverage allowances, restrictive setbacks, and complicated, multi-level review processes. These types of overly restrictive ordinances, at best, make the approval process for solar projects highly unpredictable, given the need for many variances, and, more likely, chill the growth of commercial solar altogether.
CHALLENGING MUNICIPAL RESTRICTIONS ON SOLAR DEVELOPMENT
Solar developers may want to challenge moratoriums, prohibitions or unreasonable restrictions on development. A developer may challenge a moratorium that is unreasonably lengthy. Courts have generally upheld moratoriums lasting six months to a year, but these may be considered unreasonable if they are extended beyond one year.11 For example, in Ecogen, LLC v. Town of Italy, a town initially enacted a six-month moratorium on wind turbine towers and support facilities, which was renewed several times, such that it was in effect for two years. A wind power developer challenged the moratorium on the basis that it exceeded a reasonable timeframe and did not serve a valid public purpose. The court held the town ordinance served the purpose of preventing adverse aesthetic impact, but required the town to act within 90 days by either finalizing its comprehensive zoning plan or rendering a decision on the proposed project. Accordingly, a moratorium may not be used to indefinitely prohibit solar development.
Solar developers may take valuable lessons from the oil and gas sector as they think about how to respond to prohibitions or restrictive ordinances. In 2012 and 2013, the towns of Middlefield and Dryden instituted complete drilling bans, both of which were upheld by NYS’s highest court, The Court of Appeals. As part of its zoning ordinance, Middlefield prohibited “all oil, gas or solution mining and drilling,”12 and Dryden prohibited the use of any land for “natural gas and/or petroleum support activities.”13 Despite the fact that the Environmental Conservation Law (“ECL”), which creates the Department of Environmental Conservation (“DEC”), contains an express preemption provision which states that it “shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries,”14 the Court in both cases focused on the legislative history and purpose of the ECL, finding no express or implied preemption. The Courts found that the municipality may regulate whether or not drilling activity occurs within its borders in the first place, and to the extent that a municipality allows such activity, the DEC may regulate how and where drilling activity is conducted.
To the extent that restrictive ordinances are adopted, solar developers may have distinct arguments, unavailable to the oil and gas sector, that may allow them to successfully challenge overly restrictive local ordinances. For example, solar developers might argue that important statewide interests necessitate state preemption of local bans on solar development. Despite the broad authority NYS has provided to local governments, those local governments are generally prohibited from adopting laws that interfere with a “matter of state concern”— even if it is a local matter. Some matters of “state concern” are explicitly reserved in Article IX § 3 of the NYS Constitution, such as the public school system, the courts, and matters other than “property, affairs or government” of a local government. New York courts have further construed the phrase “state concern” to include matters of water supply, highways and transportation.15 In the context of New York’s REV and Clean Energy Standard goals, NYS has expressed a clear State interest in building a more reliable and resilient electric grid that is focused on Distributed Energy Resources, cutting greenhouse gas emissions 80% by 2050, and procuring 50% of its electricity generation from renewable resources by 2030. Beyond the environmental benefits associated with these goals, it is important to remember that the REV initiative grew out of a Statewide concern, in response to Hurricane Sandy, that severe weather events may expose the vulnerabilities of the traditional distribution system.16 Similar to the well-established concern of protecting the drinking water of the State’s population, NYS has a concern of transitioning to a distributed, clean and reliable energy future for the protection of its citizens. NYS has invested billions of dollars pursuing these goals, such that a court may find that these areas of “state concern” trump the interests of local governments because of their vital importance to the State’s economy, environment and security.
In addition, long-lasting moratoriums or complete bans on solar energy production facilities issued by municipalities may be subject to challenge under the State Environmental Quality Review Act (“SEQRA”). While local moratoriums are listed as Type II actions for purposes of SEQRA, thereby requiring no further SEQRA analysis, municipalities should be wary of using this classification to avoid acknowledging and evaluating the clear environmental benefits that accompany solar energy production. Courts have held that the “criteria for what constitutes a Type II action cannot be considered in a vacuum.”17 Where there are obvious environmental impacts, it is inappropriate to classify an action as a Type II action requiring no further environmental review, and a SEQRA review must be conducted.18 A municipality cannot ignore the obvious environmental benefits lost when refusing to allow clean energy development within its borders, whether through a moratorium or a prohibitive ordinance, and the municipality’s SEQRA review should reflect this analysis, or be vulnerable to challenge.
AVOIDING THESE ISSUES
It is not unreasonable for a municipality to enact a short-term moratorium on solar development to develop a clear, reasonable zoning code for such projects. That being said, solar energy facilities can be considered less objectionable by communities than their oil and gas, or even wind, counterparts. In an effort to avoid the passage of ordinances that prohibit or significantly restrict solar energy facilities, proactive developers should be ready and willing to work with municipalities to provide education on the benefits of solar energy production, and the resources available to them to develop local zoning regulations. For example, developers may provide model code language for a municipality to aid in drafting. Sustainable CUNY, the broad sustainability program of the City University of New York, has authored and made available a Model Solar Energy Law and Toolkit, which can serve as an excellent resource for drafting local laws. In addition, educating both municipal decision-makers and community members about the benefits of solar is a crucial, proactive step to avoid local opposition. It is particularly important to highlight the local benefits, such as (1) potential tax revenues, (2) brownfield site development, (3) energy cost savings for local purchasers such as a municipal or local institutional buyer, or (4) a community solar project. Additionally, the solar industry has created one out of every 80 jobs in the United States since the Great Recession, the majority of which are blue-collar construction and manufacturing jobs.19 By framing the concept of solar technology in a way that promotes distributed, locally-owned power, self-reliance, and the pride of contributing to the green economy, developers and community members may facilitate the growth of solar in the State.