NC to Regulate the Decommissioning of Renewable Projects and Managing End-of-Life Equipment

Under a new statute signed into law on July 19, the North Carolina legislature directed the State’s Environmental Management Commission to develop regulations for decommissioning utility-scale solar and wind energy projects and management of end-of-life photovoltaic modules, energy storage system batteries, and other equipment deriving from such projects. See 2019 N.C. Sess. Laws 132. The Commission has until January 1, 2022, to adopt new rules and must establish a stakeholder involvement process by mid-September 2019. Renewable energy facilities owned or leased by a retail electric consumer, and intended for the customer’s own use on-site, are excluded from the regulations.

Background

North Carolina has the second-highest solar photovoltaic capacity in the United States and continues to develop more through its utility-scale bidding process, the Competitive Procurement of Renewable Energy (CPRE) program, and customer rebates for residential solar installation offered by the state’s private utility Duke Energy.

In developing the new regulations, North Carolina will join a growing trend in state-level regulation of end-of-life solar energy equipment. Notably, California recently proposed rules to manage end-of-life solar energy equipment under its universal waste program, and Washington has mandated that photovoltaic panel manufacturers implement take-back programs. Following Washington's lead, New York’s Senate has passed similar legislation that is now under consideration by the State House.

Details of Rulemaking Directive

In developing the decommissioning and end-of-life rules, the North Carolina Department of Environmental Quality (NCDEQ) must consider the following factors:

• Whether the end-of-life photovoltaic modules, energy storage system batteries and other equipment from utility-scale wind and solar energy projects (“spent renewables equipment”) qualify as hazardous waste under state and/or federal law.
• Best practices for managing spent renewables equipment, including reuse, refurbishment, recycling, and disposal, and the economic and environmental costs and benefits associated with each management practice.
• Expected economically productive life span of renewables equipment.
• Potential impacts spent renewables equipment could have on state landfills.
• Whether financial assurance requirements are necessary to ensure proper decommissioning of utility-scale solar projects.
• Any necessary infrastructure for developing a means to collect and transport spent renewables equipment.
• Other jurisdictions’ methods of managing spent renewables equipment.
• Whether manufacturer stewardship programs for the recycling of spent renewables equipment should be established for smaller solar installations.

By September 18, 2019, NCDEQ must establish a process for involving stakeholders in the development of the regulations, and beginning December 1, 2019, the Commission and DEQ must provide quarterly reports on their progress to the State legislature and the North Carolina Environmental Review Committee.

Interested parties such as renewable energy companies, manufacturers, and trade organizations should prepare to participate in the rulemaking process to ensure that the final rules reflect the interests and needs of the renewable energy sector.

Beveridge & Diamond's Renewable Energy industry group supports and enables successful and sustainable renewable energy projects, helping clients overcome a number of environmental regulatory and transactional hurdles, particularly with end-of-life product management and take-back alongside our Waste and Recycling practice group. We also help developers, energy companies, manufacturers, and other participants with issues such as construction and land use impacts, endangered species, and stormwater management. For more information, please contact the authors.