North Carolina House Bill 130’s solar decommissioning provisions are the result of over six years of negotiations and stakeholder discussions between renewables skeptics, local and state regulators, and solar businesses. 

“The solar decommissioning section in NC HB 130 provides protections for communities and business certainties for solar developers,” said Chris Carmody, Executive Director of the Carolinas Clean Energy Business Association. “Hopefully this law can save other states from having to reinvent the wheel,” Carmody concluded.

This article is meant to provide an overview of HB 130 so that it is a quick record of what is included. We believe that this legislation could become a model for other states as they look to address solar end of life issues. North Carolina became an early leader in utility scale solar and therefore our state is ahead of many other states whose solar market is less established.

Decommissioning of Utility-Scale Solar Projects Upon Cessation of Operations

One important feature of the solar decommissioning law is that it lays out clear definitions and deadlines, listed below. Broadly, this include:

Decommissioning and restoration requirements for utility-scale solar projects; recycling of project components required; financial assurance requirements

  • Defines terms:
    • “Cessation of operations” – utility scale solar project has not produced power for 12 months excluding due to force majeure or owner’s rebuilding the facility
    • “Expansion” or “expanded” – adding 2+ MW AC of directly-connected solar to the grid OR increasing the project power delivery by 35% (whichever greater)
    • “Photovoltaic/PV module” – smallest non divisible, environmentally protected assembly of PV cells/collector tech and ancillary parts of utility-scale projects
    • “Rebuild/rebuilt” – More than 50% of original utility-scale project PVs replaced with a different type or other fuel source. Deemed “new” for income taxes
    • “Recycle” – processing of PV modules/other utility-scale solar equipment to recover usable product; does not include incineration, must comply with applicable hazardous waste requirements
    • “Utility-scale solar project” – Ground-mounted PV, concentrating PV, or concentrating solar power project capable of generating 2+ MW or more directly connected and able to deliver power to the grid.
      • Includes: Solar arrays, accessory buildings, battery storage facilities, other infrastructure, etc.
      • Does not include: Renewable facilities owned/leased by a retail customer primarily for their own use or to offset customer consumption/net metering
  • Sets decommissioning requirement: Owners of utility-scale solar projects are responsible for decommissioning/property restoration and all costs within one year of cessation of operations. 
  • Owners must:
    • Notify the Department within 30 days detailing steps for decommissioning and restoration
    • Disconnect the project from the grid
    • Remove all equipment and ship for reuse/recycling as practical; OR, if not recyclable and not meeting hazardous waste criteria, dispose of it in an industrial or municipal solid waste landfill. 
    • Comply with hazardous waste requirements as applicable
    • Restore the property its condition before development OR an alternative condition as agreed in the landowner/project owner contract/lease
      • Provide copy of the agreement to the Department
      • Revegetate or reforest cleared land with seedlings
  • Owners of utility-scale solar projects shall submit a decommissioning plan to the Department for approval prepared, sealed, and signed by a professional, NC-licensed engineer which contains:
    • Name/address/contact information for the project owner and landowner
    • Narrative description of intended decommissioning process
    • Equipment intended for salvage and estimated salvage value
    • Intended steps for property restoration
    • Estimated costs for decommissioning and restoration
    • Proposed mechanism to meet financial assurances (see below)
  • Sets financial assurance requirement
    • Owners must make assurances acceptable to the Department that sufficient funds are available to meet decommissioning and restoration requirements
      • Assured even in event of owner insolvency or ceased residence/incorporation/business/asset maintenance in NC
    • Any/a combination of the following may be used showing protection equal to that which would be provided by insurance if using insurance only:
      • Insurance
      • Financial tests
      • Third-party or corporate parent guarantees from those passing a financial test
      • Irrevocable letters of credit
      • Surety bonds
    • Assurance documentation must be submitted at time of registration, updated every five years, and maintained until compliant decommissioning and restoration is complete
  • Utility-scale project owners must register with the Department and update every five years, providing:
    • ID for owners/legal entities responsible for decommissioning and financial assurance, where applicable
    • Summary of equipment subject to decommissioning (location/size/number/module type) and hazardous waste determinations
    • Project timeline summary
    • Estimated decommissioning/restoration costs
    • Financial assurances as applicable
  • Landowner/local authorities are NOT preempted from adopting more stringent requirements
  • The Utilities Commission shall develop/maintain a list of operating utility-scale solar projects and update annually on/before July 1
  • The Department of Environmental Quality shall:
    • Collect fees from project owners at the time of registration and periodically
    • Release an annual implementation report
    • Adopt rules setting criteria for financial assurances which consider:
      • Technology type, number, size
      • Ancillary facilities
      • Condition of property prior to construction and size of area impacted
      • Salvage value of project equipment
      • Etc.
  • Adopt rules determining:
    • Required periodic financial assurance updates from owners
    • Decommissioning plan requirements
    • Registration fees
    • Etc.

Grants and incentives for recycling of solar panels 

  • DoC and DEQ shall identify existing incentives/grants encouraging R&D for PV reuse/recycling and to facilitate the PV reuse/recycling industry in NC

Utility-Scale Solar Management Fund

  • A Utility-Scale Solar Management Fund is created as a special Department fund, consisting of revenue from the fees imposed on utility-scale project owners and to be used to implement decommissioning provisions

Section 2b: Rewritten section on Department duties and powers – Department will provide a solid waste management report on/before April 15th annually to the Environmental Review Commission and Fiscal Research Division including solar energy equipment management as described in the new Part 2J

Section 2c and 2d: DEQ will adopt rules and report – DEQ will adopt permanent rules on the aforementioned requirements no later than August 1, 2025. DEQ will submit quarterly implementation/program development/rulemaking status reports to the Environmental Review Commission and Joint Legislative Commission on Energy policy beginning December 1, 2023 through December 1, 2025.

Section 2e: Existing, conflicting contracts about decommissioning/restoration are not impacted by the above new requirements; compliance with the above is required only to the max extent not in conflict with existing provisions.

Severability Clause and Effective Date

Section 3: If a court declares any part of the act unconstitutional/invalid, that only impacts the declared section, NOT the whole act.

Section 4: Section 2a of the act is effective when it becomes law, except as follows: 

  • Decommissioning/registration requirements under 2b and 2e are effective November 1, 2025 and apply to utility-scale projects constructed both before and after that date. Project owners must register with the Department:
    • By the above date, or at least 90 days prior to construction if constructed after that date
    • At least 90 days prior to starting rebuilding/expansion of a project
  • Decommissioning and financial assurance requirements under 2c and 2d are effective November 1, 2025 and only apply to:
    • Utility-scale projects with pending/submitted applications for certificates of public convenience and necessity after the above date
    • Projects generating energy/interconnected to transmission on the date the act becomes effective, only if the project is rebuilt/expanded after that date
  • Owners of utility-scale solar projects shall submit decommissioning plans and financing assurances by November 1, 2025, prior to construction for projects started after that date, or prior to rebuild/expansion .