Renewables

With the price of solar having declined over 80% just since 2010, there is great demand for suitable locations for utility-scale solar arrays and other renewables (e.g., wind). EPA and the National Renewal Energy Lab (NREL) have identified over 130,000 Brownfields that are close to grid connections and otherwise well-suited for such use.

Risk of environmental liability is a major obstacle to using many of these sites, as many have sub-surface contamination that may migrate or otherwise require cleanup. Cleanup demands could be triggered by construction activities; by ballasts used to anchor the arrays; by the heavy load of trackers or transformers; or simply by pollutant migration/discovery having nothing to do with the construction or operation but discovered during statutorily-mandated 5-year reviews. E.g., Barriers to Renewables Energy Development on Brownfields.

Insurance purporting to cover these risks comes on “specialty lines” forms that have no regulatory review as to their language or rates, and review of their language routinely reveals subtle but gaping exclusions. Some developers address the risks by “transferring” liability to others, but such transfers are not like passing a baton (but are more like giving another chickenpox), because the transferor remains jointly and severally liable to the government and others. E.g., CERCLA § 107.a. Thus, just as policies require careful review and negotiation, liability-transferring contracts also require such review.

EPA and other documents relevant to converting Brownfields to “Brightfields” can be found here.