Renewable energy projects are facing increased delays, cancellations, and big losses

Energize Weekly, August 21, 2024

Wind and solar projects across the U.S. are facing increased local and state opposition, leading to delays, cancellations, and millions of dollars in lost investments, according to university and national laboratory analyses.

A Lawrence Berkeley National Laboratory survey found that in the last five years about one-third of wind and solar projects were cancelled and half experienced delays of six months or more with local zoning, grid connection problems, and local opposition the main culprits.

In 2023, 378 renewable energy projects across 47 states encountered significant opposition, according to a report by the Sabin Center for Climate Change Law at Columbia University.

“In nearly every state, local governments have enacted laws and regulations to block or restrict renewable energy facilities, or project opponents have succeeded in forcing the delay or cancellation of particular projects, or both have occurred,” the report said.

There are 395 local restrictions across 41 states and 19 state-level restrictions, that are “so severe that they could have the effect of blocking a renewable energy project,” the Sabin Center report said.

The Berkeley survey found that delays and cancellations most often occurred during permitting, but even happened when projects were under construction. Project cancellations led to average non-recoverable sunk costs of more than $2 million per project for solar, and $7.5 million for wind.

The sunk cost per megawatt of electric generating capacity resulting from delays and cancellations was about $200,000 per megawatt for both wind and solar.

Most projects take four to six years from a project’s initial public announcement to commercial operations. About 20 percent of projects take more than six years, the Berkeley survey estimated.

In terms of the reasons for cancellations, local ordinances were the biggest, followed by grid interconnection problems and community opposition. Other causes were supply chain problems, environmental restrictions, a lack of funding, and a lack of customers for the electricity.

“When asked about the cause of cancelations for their most recently canceled project, over half of developers indicated more than one primary cause,” the survey said. “It can be difficult to disentangle exact causes of delays and cancellations and some causes are interrelated.”

Four out of five developers said they were “at least moderately concerned” that community opposition will get in the way of decarbonization goals. More wind developers were very concerned about opposition than solar developers.

Project delays due to community opposition averaged 11 months for solar, and 14 months for wind, according to the survey, with the main concerns voiced being visual impact of projects and their effect on community character. For wind, questions about noise are also an issue.

Local opposition is continuing to grow, the Sabin Center report said. “In nearly every state, local governments have enacted laws and regulations to block or restrict renewable energy facilities, or project opponents have succeeded in forcing the delay or cancellation of particular projects, or both have occurred.”

The annual report identified a 73 percent increase in local restrictions between 2022 and 2023, reaching 395, and a more than 100 percent increase in state-level restrictions going to 19 from nine.

For example, in just a four-month span, nine townships in Marathon County and Clark County, Wisconsin, adopted ordinances that require large wind turbines to be set back the greater of one mile or 10 times turbine height from property lines.

This severely restricts where turbines can be sited, the report said, even though there is a state law prohibiting local governments from placing restrictions on wind or solar facilities except for protecting health and safety or do not significantly increase the cost or decrease efficiency of a project.

Similarly, seven townships in Michigan and four counties in Virginia prohibit or substantially restrict solar development on agricultural land.