The increasing demand for clean energy and the global shift toward sustainability have made renewable energy projects—such as solar and wind—highly attractive for businesses. While these investments present significant opportunities for growth and environmental stewardship, they also come with complex regulatory requirements under federal environmental law. For companies involved in these types of projects, understanding the federal regulatory framework governing renewable energy investments is crucial to both compliance and long-term success.
In this post, we explore the key environmental laws and regulations that affect businesses investing in solar, wind, and other renewable energy projects. These regulations span several federal agencies and statutes, and businesses must navigate a combination of permitting requirements, environmental impact assessments, and other legal considerations before moving forward with a project.
Key Federal Laws Governing Renewable Energy Projects
National Environmental Policy Act (NEPA)
NEPA, one of the most significant federal environmental laws, requires federal agencies to assess the environmental impact of major projects, including renewable energy developments, before making decisions. This typically involves preparing an Environmental Assessment (EA) or an Environmental Impact Statement (EIS), depending on the scale and potential impacts of the project.
For businesses investing in renewable energy, particularly large-scale solar farms or wind turbine installations, compliance with NEPA is often mandatory. If your project requires federal permits, uses federal land, or receives federal funding, you will likely need to undergo the NEPA review process. The NEPA process can be lengthy and complex, but careful planning and early coordination with the appropriate federal agencies can streamline it.
Endangered Species Act (ESA)
The Endangered Species Act (ESA) protects species that are threatened or endangered, as well as their habitats. Renewable energy projects—especially wind and solar farms—are often located in rural areas where these protected species may reside.
Under the ESA, businesses must ensure that their projects do not harm endangered species or their habitats. In some cases, this may require obtaining permits for incidental harm (known as “incidental take permits”) or adjusting project plans to avoid interference with protected wildlife. For example, wind energy projects have faced challenges related to bird and bat populations, while solar farms may impact desert ecosystems.
Failure to comply with the ESA can result in project delays, costly fines, and reputational damage. It is essential to conduct thorough wildlife surveys and work with biologists and legal counsel to minimize the impact on protected species.
Clean Water Act (CWA)
The Clean Water Act (CWA) regulates discharges of pollutants into U.S. waters and establishes quality standards for surface waters. Renewable energy projects, particularly those involving large land areas, may need to obtain permits if they impact nearby water bodies, wetlands, or waterways.
For example, solar farms or wind projects may involve the construction of roads, transmission lines, or other infrastructure that crosses waterways. Such activities may require Section 404 permits from the U.S. Army Corps of Engineers, which regulate the discharge of dredged or fill material into U.S. waters. Similarly, businesses must ensure compliance with stormwater management requirements during construction, as sediment runoff from construction sites can negatively impact water quality.
Federal Land Policy and Management Act (FLPMA)
Many renewable energy projects are developed on federal land, especially in the Western U.S. The Federal Land Policy and Management Act (FLPMA) governs the use of public lands managed by the Bureau of Land Management (BLM) and the U.S. Forest Service, among other agencies.
Under FLPMA, businesses must secure permits or leases to use federal land for renewable energy development. In addition to complying with NEPA, projects on federal land must also align with the land management agency’s overall objectives, including conservation and multiple-use mandates. Businesses planning to develop renewable energy on federal land should expect a rigorous review process and should work closely with federal land management agencies from the outset.
Clean Air Act (CAA)
Although renewable energy projects are designed to reduce greenhouse gas emissions and improve air quality, they may still need to comply with the Clean Air Act (CAA). Construction activities, such as the use of heavy machinery, can generate air pollutants, and some renewable energy technologies, such as biomass, involve combustion that could produce emissions.
Businesses must obtain permits if their projects emit regulated pollutants, either during construction or operation. Depending on the location and scale of the project, additional state or regional air quality regulations may apply, further complicating compliance efforts.
Incentives and Opportunities for Renewable Energy Projects
While compliance with environmental regulations can be challenging, businesses investing in renewable energy projects also stand to benefit from federal incentives designed to promote clean energy.
Investment Tax Credit (ITC)
The Investment Tax Credit (ITC) allows businesses to deduct a significant percentage of the cost of installing renewable energy systems, such as solar panels, from their federal taxes. The ITC has been instrumental in driving solar energy adoption in the U.S. For businesses, the tax savings provided by the ITC can offset the upfront costs of renewable energy investments.
Production Tax Credit (PTC)
The Production Tax Credit (PTC) is another federal incentive that provides businesses with a per-kilowatt-hour (kWh) tax credit for electricity generated by qualified renewable energy sources, including wind, geothermal, and biomass. The PTC is particularly valuable for large-scale wind energy projects.
Grants and Loan Programs
The U.S. Department of Energy (DOE) and other federal agencies offer grants, loans, and other financial support to businesses developing renewable energy projects. For example, the DOE’s Loan Programs Office has provided financing for some of the largest solar and wind projects in the country.
Legal Counsel to Navigate the Federal Regulatory Landscape
For business owners, investing in renewable energy projects offers a unique opportunity to align with global sustainability goals and reduce long-term energy costs. However, navigating the complex regulatory framework under federal environmental law is critical to ensuring project success and compliance. Understanding the requirements of laws such as NEPA, the ESA, the Clean Water Act, and others is key to avoiding delays, fines, and other legal complications. By working with experienced legal counsel, conducting thorough environmental assessments, and engaging with federal agencies early in the project planning process, businesses can mitigate risks and capitalize on the opportunities that renewable energy presents.
If your business is considering a renewable energy project, contact our experienced team at Finkel Law Group to help you navigate the federal environmental regulatory landscape and take full advantage of available incentives.
About Finkel Law Group
Finkel Law Group P.C., with offices in San Francisco and Oakland, has more than 25 years of experience helping our clients navigate federal and state environmental law matters. When you need intelligent, insightful, conscientious and cost-effective legal counsel to assist you with such matters, please contact us at (415) 252-9600, (510) 344-6601, or info@finkellawgroup.com to speak with one of our environmental lawyers.