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Hot Takes For Solar Developers In Delaware: New Legislation And A Rush To Market – Renewables

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On Friday September 17, 2021 Delaware Governor John Carney
signed three unique bills all seeking to tackle different
environmental issues, Senate Bills 2, 21, and Senate Substitute 1
for Senate Bill 24. This update will focus on Senate Bill 2 which
facilitates development of community owned energy generating
facilities and renewable energy in particular, solar power projects
in the First State. Senate Bill 2 has since prompted solar
developers to explore new opportunities for these projects. The
date on which Delmarva Power will start accepting applications is
just around the corner. In this article, we will give some
background and practical pointers for solar developers and
landowners seeking to take advantage of this new legislation.

Expanding Solar Power in the State

Over the last decade, there has been significant growth in the
use of solar power in the United States and around the world.
According to the Solar Energy Industries Association, the average
annual growth rate in solar energy has been 42 percent over the
past ten years.However, Delaware has arguably lagged behind this
trend. Senate Bill 2 was passed in an effort to change that.

The bill, originally introduced in the Senate’s Environment
& Energy Committee this past June, amends Titles 6, 26, and 29
of theDelaware Coderelating to community-owned energy
generating facilities and renewable energy. The legislation will
involve a rulemaking by the Public Services Commission to culminate
on March 11, 2022.

What the Law Will Do

Senate Bill 2 was enacted to eliminate current barriers to
community-based solar photovoltaic systems in Delaware. The
legislation sets up a regulatory process to be implemented by the
Delaware Public Service Commission (PSC) with consumer protection
provided by Delaware’s Department of Justice. Among other
things, Senate Bill 2 will:

  1. Authorize multiple types of system ownership models, defined as
    “community-owned energy generating facilities”

  2. Allow a maximum system size of 4 megawatts (MW)

  3. Eliminate a previous requirement that all customers of a system
    be located on the same distribution feeder

  4. Eliminate a previous requirement that all customers of a system
    be identified before the system can be built

  5. Provide for the regulation of community-owned energy generating
    facilities by the PSC and specify the fees and other requirements
    for the system to be granted a Certificate to Operate

  6. Provide compensation to the system owner for 10% or less of
    unsubscribed energy

  7. Require system owners to certify that the system serves at
    least 15% low income customers; and

  8. Require the PSC to engage in rule-making in consultation with
    Delaware consumer protection authorities, and promulgate rules and
    regulations by March 11, 2022.

  9. This process has begun unfolding at a fast pace, with solar
    developers rushing to secure rights to suitable land, as well as
    prepare their applications.

What You Need to Know

Community solar projects could transform the way many Delaware
individuals and institutions receive and pay for power, hopefully
lowering costs. For example, community solar project customers can
receive credit on electricity bills for power put back into the
grid. A local health center could launch a community solar project
and share solar credits with patients. There are endless
possibilities. For now, potential Delaware solar developers need to
focus on the nuts and bolts of approving these projects. Community
solar developers should keep the following top of mind:

  1. Delmarva Power will start taking community solar applications
    onNovember 1, 2021.

  2. Applicants must make a specific showing as to control over the
    property targeted for the project as per the application.

  3. All Delaware counties and municipalities have their own
    separate zoning and building codes to be examined to determine
    required approvals for each project, which is separate from the
    Delmarva Power or PSC process.

  4. Agricultural activists in Kent County attempted to convince the
    Levy Court to put a moratorium on solar projects; that failed as of
    October 19, 2020, but an ordinance with new standards is being
    drafted now, so consider front-loading applications to obtain
    approvals under current laws.

Property owners, on the other hand, need to consider securing
legal counsel to review any proposed agreements immediately if a
solar developer has requested execution of a lease or option. We
would appreciate hearing from you about your proposed project or
interest in Delaware solar opportunities, and discuss how we might
help with agreements, title insurance, zoning due diligence and
approvals, regulatory approvals and related matters.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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