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Dual-use solar: U.S. policy considerations to drive clean energy deployment

February 22, 2024

Dual-use solar — the co-location of solar with another land use — has the potential to provide added environmental, social, and economic benefits compared to traditional solar development. In a previous blog, we provided a primer on the range of uses, benefits, and applicability of three forms of dual-use solar: agrivoltaics, ecosystem services–based solar, and floatovoltaics. We concluded that, while dual-use solar should not be considered a silver-bullet solution to the barriers of deploying utility-scale solar, it can prove a complementary development to utility-scale efforts while providing opportunities to integrate greater local benefits into solar development. 

Implementation and adoption of these systems are highly reliant on supportive local land-use regulations, state policies, and state and federal funding opportunities, and existing policies can pose more barriers than support. Solar is already difficult to build — with challenges such as local opposition and local ordinances that restrict technology and impede solutions like dual-use solar. Because dual-use configurations combine multiple land uses, they often introduce new challenges to existing local zoning and land-use plans.  

State and local land-use policies can thoughtfully consider how dual-use solar can contribute to larger goals for both land protection and clean energy deployment, with the recognition that it is still a nascent, evolving, and complex technology. Existing federal, state, and local policy mechanisms to enable opportunities for beneficial solar development practices are summarized below, along with a range of policy considerations to ensure dual-use solar development opportunities are feasible.  

Federal Policy  

Because land-use decisions in the United States are typically made at the local level, the federal government plays a limited role in encouraging dual-use solar through land-use policy. However, federal agencies like the Department of Energy (DOE) and U.S. Department of Agriculture (USDA) have been investigating opportunities for dual-use solar, and funding made possible through the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) has allowed significant investment into dual-use research and demonstration projects. Recent marker bills that would provide additional research, funding, and demonstration projects have signaled bipartisan interest in agrivoltaics. These are bills introduced to build momentum for an idea in hopes it could be included in the next Farm Bill, the primary food and agricultural policy package that is authorized by Congress every five years. However, progress on the next Farm Bill, which was originally slated to be passed in 2023, has stalled, and it is unclear which, if any, of these initiatives will make it into the final bill.  

Another key role the federal government can play is in establishing clear definitions. Current definitions of dual-use solar vary, often ignoring important differences between types of configurations. For example, DOE research and resources label ecosystem services-based solar as a form of agrivoltaics. However, they are distinct in important ways that warrant discrete policy consideration: ecosystem services-based solar does not include growing food or livestock and these configurations are typically less complex, less costly, and easier to implement than agrivoltaics. Taking an expansive definition of dual-use solar that recognizes the differences between agrivoltaic systems and ecosystem services-based solar can bring clarity and specificity to the field, can help determine eligibility for funding programs, and can promote uniformity in definitions for agrivoltaics and other forms of dual-use solar within state and local policy.  

Federal interest in floatovoltaics is also growing, particularly in installing this technology over reservoirs and retention ponds. For example, Congress dedicated $10 million through the Water Resources Development Act of 2022 to the U.S. Army Corps of Engineers to study the feasibility of deploying solar at sites under their purview, including floating solar on water resources. The results of this study are due this summer and will provide valuable insight into where this technology could be deployed on federal reservoirs. 

Finally, the federal government, across its many agencies, manages a tremendous amount of public land in the United States. Many of these areas have significant renewable energy resource potential, an opportunity explored in greater detail in this technical analysis by CATF. In particular, the Bureau of Land Management (BLM) manages over 245 million acres and is already developing clean energy on these lands under a congressionally set 25 GW by 2025 target. BLM is also working to update its Western Solar Plan through an accompanying programmatic environmental impact statement for utility-scale solar across an 11-state region in the western United States. While the update to the plan is still in draft form, it provides an example of how federal agencies can use their own land-use and environmental review processes to either enable or further restrict dual-use solar development on federal lands.  

State Policy  

Solar siting decisions are mostly made by local authorities, but states have been active players in enacting policies that incentivize dual-use adoption. Many of these policies have focused on agrivoltaics and ecosystem services–based solar. Existing state-level dual-use solar policies can be categorized into four main groups: 

1. Eligibility for Continued Farmland Tax Assessment 

Some state land-use policies promote the conservation and continued use of farmland by taxing specific parcels based on their current use rather than at the highest or best use. Under these policies, adding solar arrays to those lands may make them ineligible for tax benefits or require the landowner to pay tax penalties for converting the land. To encourage dual-use deployment, some states have enacted policies that allow lands with dual-use systems to maintain their eligibility for tax benefits. These policies often only apply to land that is kept in existing agricultural production, meaning that dual-use systems on land preserved for open space or forests would be excluded. These policies both incentivize keeping existing agricultural land in production and expanding available land for solar development.  

In 2021, New Jersey passed a law that establishes a pilot program to allow agricultural land with agrivoltaic solar to maintain its farmland tax eligibility. The pilot program puts a capacity limit on the individual project sizes, which increases each year of the program, but caps out at a total capacity of 200 MW for all projects in the program. In 2017, Rhode Island amended its “Taxation of Farm, Forest, and Open Space Land” law to allow farmland with dual-use systems, or the conversion of less than 20% of the total land to renewable energy, to remain eligible for valuation, assessment, and taxation under this program.  

2. Financial Incentives  

Massachusetts and Washington provide financial incentives beyond farmland tax treatment for dual-use solar deployment, albeit through different mechanisms.  

The Massachusetts Department of Energy Resources’ Solar Massachusetts Renewable Target (SMART) program employs a tariff-based incentive, funded by the state and paid directly by the utility company to the system owner to encourage certain types of solar development, with higher rates called “adders” available if projects meet certain conditions. One of the highest adders in the program is for dual-use solar projects. It adds 6 cents per kilowatt-hour to the base rate if a project is built on land designated for agriculture and active agricultural use continues through the life of the project. While this program incentivizes dual-use solar projects, it also has tight requirements for site capacity limits, shading restrictions, and reporting requirements that first and foremost prioritize preserving agricultural production. 

In Washington, budget allocations for the 2024 and 2025 fiscal years dedicate $10.7 million toward establishing a dual-use solar pilot program that will provide grants and technical assistance for utility-scale dual-use projects. Other financial incentives for dual-use solar are disbursed through community solar grant programs, including $100 million from a 2022 law and $40 million in the most recent budget for a community solar grant program for solar projects on “preferred sites,” which include bodies of water like irrigation canals, stormwater ponds, and other dual-use sites. 

3. Adoption of a Beneficial Habitat Standard  

States are increasingly adopting policies to encourage beneficial habitat standards for solar projects in line with ecosystem services-based solar, in some cases referred to as “pollinator-friendly solar.” Seven states (Minnesota, Maryland, South Carolina, Vermont, New York, Illinois, and Michigan) have passed legislation allowing solar projects to voluntarily designate themselves as pollinator-friendly and receive certification from the state’s natural resources department. Although certifications may be voluntary for developers, they have seen significant uptake, signaling that ecosystem services-provisions can be complementary to development and improve siting outcomes for both communities and developers. 

The state of Minnesota passed the first pollinator habitat program law in 2013. The policy first resulted in the development of best management practices and habitat restoration guidelines for pollinator habitats. The state passed follow-on legislation in 2016, directly addressing pollinator-friendly solar sites and tasking the Minnesota Board of Water and Soil Resources with scoring voluntarily participating solar sites and maintaining a database of sites that meet the “Habitat Friendly Solar” requirements. According to the database, there are 59 pollinator-friendly solar sites in the state, covering over 3,200 acres, as of August 2023. 

4. Research and Development  

States can also further support dual-use research and development. In 2023, Colorado passed a law that creates $500,000 in grants for demonstration and research projects and directs the water conservation board to study the feasibility of floatovoltaics on irrigation canals and reservoirs.  

Other State Policy Considerations  

The four state policy approaches outlined above represent the early beginning of how state policy can be leveraged to support dual-use and are not a complete range of what is possible through state action. As new policies are developed and existing ones refined, policymakers have an opportunity to further consider how regulations can better balance needs between environmentally supportive practices and energy development in this complex mixed land use.  

Regulations for energy development have historically been put in place to penalize bad actors to reduce impacts on local ecosystems. However, under a new approach to solar development, where solar works in tandem with the environment, policies should ensure local environmental protection without unintentionally discouraging good behavior. For example, solar developers may be wary of planting native vegetation on site if it attracts at-risk species that they would later be liable to protect. This may dissuade some developers from constructing dual-use configurations if they are not confident in accepting risk and cost additions. State-level permitting processes and land-use regulations should thus balance the needs of both the environment and energy development for it to be viable for developers. 

Local Policy   

Because most clean energy siting processes happen at the local level, local land-use regulations are the most impactful form of dual-use policy. However, most local governments have yet to incorporate any form of solar development into their existing land-use regulations or comprehensive land-use plans. When permissive regulations for solar development are in place, they may still unintentionally restrict dual-use solar, making the technology more challenging to deploy. For example, some communities may allow solar development generally but prohibit it on agricultural lands, preventing opportunities for agrivoltaics. Without clear guidance from the state or federal levels, local officials may arbitrarily set limits to the design parameters of a site that could limit the potential for dual-use solar configurations. For example, limits on panel heights can make raising panels to heights necessary to accommodate livestock or farm equipment difficult.  

To support dual-use solar, land-use regulations can allow for mixed land usage, use overlay zones that set special zoning provisions on top of a parcel’s base zoning within a specified district, or set standards for solar development on certain land types. Some local governments may even go so far as to zone for “solar by right,” which permits solar development everywhere unless explicitly excluded, which can help accommodate creative, dual-use development configurations. For example, Maricopa County, Arizona allows non-utility-scale renewable energy systems as an accessory within any zoning district, eliminating the need for a permit or variance for small installations. Ordinances can be put in place to require native vegetation to be planted as a ground cover on solar sites, like for those built on existing agricultural land. Similar to our recommendation at the federal level, local definitions around dual-use solar should be expansive and consider the use case, needs, and regulations around agrivoltaics and ecosystem services-based solar separately. Likewise, local governments would need to incorporate floatovoltaic systems into their comprehensive land-use plans and zoning to ensure these are permissible.  

More to learn and more to do to ensure successful dual-use deployment 

Building dual-use solar is challenging under existing state and local land-use policies due to the complexity of it being a mixed land use. It is also a technology that is not fully matured and still requires further research and development to unravel many of its current barriers to deployment. Continued federal support for research and demonstration projects is needed, and clear guidance on standards and definitions will be crucial in accelerating the development and deployment of dual-use solar. To ensure successful deployment, careful consideration is required to ensure that state and local regulations accommodate a range of dual-use solutions, making them accessible for developers and consistent with land protection priorities.  

This is the second of a three-part series on dual use-solar within the broader context of utility-scale solar. The earlier blog post in this series provided a primer on the types of dual-use solar. The final blog post will assess the potential feasibility of dual-use solar within California’s San Joaquin Valley. 

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