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From sussing out the site with the best cost/benefit ratio, to dealing with the unexpected expense of NIMBYism, for utility-scale solar developers in the western US, research pays off.

Through the Obama administration’s initiative in coordinating among several agencies, the Department of Energy, the Department of the Interior, and the Bureau of Land Management (BLM), the group has developed 17 Solar Energy Zones in six south-western US states, to help developers locate the best sites for solar deployment on public lands, that offer the least resistance, as approved priority development areas for utility-scale solar.

There are two annual charges for siting solar PV on BLM land: land rents, based on how many acres you use to generate power, and capacity fees, based on how many megawatts you will be generating.

Finding the lowest cost land

BLM land rent is per acre, per year, and varies widely in different locations, based on the land value. The Bureau of Land Management manages about 23 million acres of land across California, Arizona, Colorado, New Mexico, Nevada and Utah with potential for utility-scale solar energy development, and has calculated the new annual rates for land rents which are pegged to rural land value, in each of 12 value zones.

Rents range from $16.60 an acre in Zone 1, to $6,642.40 in Zone 12. This is where a judicious search for an ideal site can pay off.

As an example, the 2013 rent for a 4,000 acre solar energy right-of-way authorization in California’s Riverside County (a Zone 7) which accommodates some of the sprawl of Los Angeles, would be $1,328,480 per year (4,000 acres X $332.12 per acre), while the same 4,000 acre project in Kern County (Zone 4) to the north of the city would be only $398,560 (4,000 X $99.64).

"We are using agricultural rural land values instead of urban residential land values, since BLM land is more rural,” explains BLM spokesman Ray Brady.  “We also used 80 per cent of this agricultural rural land value to remove any value that may be associated with buildings on these rural lands, since BLM land would not typically have any building improvements on our lands."

Currently, from 2010 through 2015, the rates increase 1.9 per cent annually, and the annual increase is pegged to the inflation rate. But with slower inflation in the US, future increases might be at a lower rate.

Capacity fees

The BLM also charges a rate based on capacity. As of 2010, the capacity fee for PV on BLM land was $5,256 per MW per year.

The annual capacity fee captures the value added of the increased industrial use being made of the land to produce electricity. It is phased in over the first five years, and only charged as capacity is completed, so if a project is finished in phases, a solar developer is only charged for each megawatt actually generating in that year.

The combined capacity fees and rents from solar authorizations on BLM public lands go to the U.S. Treasury. But solar development might be easier if they went to local jurisdictions, helping fend off NIMBYism.

Unexpected expenses

One of the more surprising expenses for solar developers in California is dealing with the pockets of unexpected NIMBY opposition to solar development in a state that leads the US in utility-scale clean energy deployment.

Opponents exploit a weakness in the California Environmental Protection Act (CEQA) to curtail utility-scale solar development, by filing last minute complaints after a project is approved. These can effectively shut down an approved project.

Speaking for Silicon Valley’s CEQA Working Group, which seeks to end the abuse, Shiloh Ballard empathises with the difficulties of solar developers.

“Basically if a CEQA challenge is filed and it goes into litigation; this is what these folks want to avoid,” says Ballard. “Because once it’s in that phase, the timeline then becomes uncertain; it could take one year. It could take two years, who knows?”

Her organisation and even legislators in the state believe that these CEQA filings have become a cynical misuse of state environmental law.

“The folks challenging it have no incentive, since the whole point is to delay,” she points out. “And so it’s in the best interests of someone like Sunpower to just get out their cheque book and just write a check rather than seeing this going to court.”

If a project is delayed long enough, it could miss a deadline, so the utility could cancel its PPA, and without a PPA, the financing likely needs to be begun all over again. The CEQA working Group seeks a legislative remedy.

Ideal siting

Carl Zichella, director for Western transmission for NRDC, takes another approach. He works with all the stakeholders to accelerate the implementation of renewables while balancing the needs of conservationists, with judicious site selection. The NRDC helped establish the so-called Renewable Energy Zones that facilitate development by identifying sites where projects are unlikely to face environmental conflicts and other potential risks.

“We’ve been encouraging what we call guided development, and what we mean by that is identifying the areas with low environmental conflicts that are close to existing infrastructure so they can be permitted more easily, more rapidly and they can be connected to the grid with fewer problems,” he says.

One example Zichella is working on is in the heart of California’s Central Valley. The Westlands Solar Park could open up to solar developers 30,000 to 90,000 acres of agricultural land contaminated by selenium and salt, resulting from years of irrigation on drainage-impaired soils in the southern San Joaquin Valley. It is unlikely to generate conflict because it is all on private land, and its proponents have a vested interest.

“It’s the farmers that own that land who are the ones who are trying to create the park,” explains Zichella. “So there’s really no conflict between the landowners and the project at all.”

Much of the farmland has been contaminated with surface salts, heavy metals elements like selenium, which is toxic in high concentrations.

“You’ve got to realize something about the Central Valley,” says Zichella. “It’s been irrigated for agriculture for decades. When land is contaminated like that they need to flush the salt out of the surface.”

“They don’t have the water for that any more. It just doesn’t exist. And they are never going to have water again, for that level of agriculture. It will never be farmed again the way it was in decades past. They are getting only a tiny fraction of the water they used to get in water allocation. So there are not a lot of NIMBY issues. That area is actually not controversial at all.”

Combining transmission, generation and storage

“We want to think about both generation and transmission at the same time,” he says. “What you want to do is aggregate the projects in areas with high resource potential, with low resource conflicts, and then rationalize the transmission for those. We want to think about where you put the generation, because that dictates where you’re going to put the transmission.”

The proposed solar park is a case in point. There has been some congestion in the Central Valley, so there is already a need to build more transmission.

What is more, it is located is close to a pumped hydro storage facility called Helms, owned by PG&E, that has been underutilised until now because it was transmission-constrained. Until recently, storage has not been as pressing a need. But as California closes in on its 2020 requirement for 33 per cent renewables - and not counting hydropower - that will change.

“The 33 per cent goal: we don’t just hit it and then start to taper off,” says Denny Boyle, spokesman for PG&E. “We have to maintain that goal going forward. So we will have pretty steady PPAs continuing.”

Zichella says that as a result of all three drivers, the California ISO is now looking at additional transmission, to relieve congestion, to get better access to Helms, and to provide for transmission for new renewable development in the Central Valley.