Companies buying, leasing land have varying goals for directing solar energy - cnhinews.com
Companies buying, leasing land have varying goals for directing solar energy | Pennsylvania | cnhinews.com
JOHNSTOWN — Hay farmer Bob Davis’ property is a half mile from an active coal-fired power plant in Northern Cambria County.
Pennsylvania’s share of solar energy composes 0.5% of the state’s energy portfolio. As coal-fired plants have increasingly been shutting down, renewable energy including solar is still far off from reaching the level of sources including natural gas as coal's replacement, but it's knocking on people's doors.
Transmission lines such as those serving the power plant near Davis have drawn solar companies to send him proposals because leasing land near transmission lines capable of handling added solar power eliminates the financial burden on a company to install them.
“I’ve been approached by different people who wanted to lease ground for solar development, and I just think they weren’t great offers,” Davis said. “These are people who wanted to lease my ground, but they are not the people who are going to develop the solar fields.”
Ebensburg Attorney Paul Eckenrode calls those organizations “flippers.”
“They will try to lowball the landowner, and there is a measure of negotiation, but these flipper companies might have a handful of investors, might have a couple venture capitalists, so they might have a small war chest, so they can give a few bucks and they might pay the landowner for this primary term and it might only be for a couple thousand dollars,” he said.
Such agreements, he said, tie properties up a lease for years-long terms.
“So, if these flippers pinpointed a property correctly, that gives them leverage to then try to sell that lease or sign that lease to an actual solar company for significantly more money,” he said.
Davis said one company sent him a 40-page email.
“You have to get an attorney to look at this stuff,” he said. “The one I looked at, I was definitely not interested. It was heavily favored to the solar people. They said you could farm between it. But there’s not enough room to actually farm.”
Who's buying?
The question of who is leasing or buying land is a loaded question, Penn State Extension energy educator Joseph Conklin said.
“There are multiple different types of entities, and they all have their reason why," Conklin said. “It could be something as speculative as a couple of guys in their basement who have started ‘Solar Company LLC’, and they are trying to get some properties under lease in an effort to never develop them but to sell those leases to somebody big who might actually develop them,” he said. “And then we get to the point of some companies that might be international, national or regional within the United States."
And although many solar developers aim to build solar arrays in Pennsylvania that would add clean energy to the state's grid, that's not always the case.
The Mineral Basin Solar project underway by Swift Current Energy in Girard and Goshen townships, Clearfield County, is set to generate 402 megawatts — which has the potential to power 75,000 households annually, the company said on its website.
The state’s largest solar farm, however, would export its energy to New York. The New York State Energy Research and Development Authority awarded Mineral Basin Solar a 20-year Renewable Energy Certificate contract as part of New York State’s large-scale renewable energy solicitation under its Clean Energy Standard.
That doesn’t help Pennsylvania’s proposals to increase the amount of solar power sold to Pennsylvania customers, though Swift Current Energy Vice President of Development Alec Jarvis said in an email that Mineral Basin's power could be shared with Pennsylvania.
“The transmission line that we will be interconnecting to is owned by NYSEG (New York State Electric and Gas) and is part of the NYISO (New York Independent System Operator) system," he said. "The NYISO and PJM system (Pennsylvania-New Jersey-Maryland Interconnection) are electrically connected, and power flows to and from these systems regularly.”
Although New York, Jarvis said, regularly shares power with the system governing Pennsylvania, it is primarily tied into a separate system.
The Commonwealth of Pennsylvania is part of the Pennsylvania-New Jersey-Maryland Interconnection, or PJM, which is the grid operator for 13 states or regions – Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.
One way to see who is leasing land for solar projects is through the PJM system.
If a company progresses to the point of securing an interconnection agreement, documentation on PJM's website will list the developer.
According to the PJM Serial Service Request status website, there are 14 projects in the queue for Cambria County, of which nine are "active" and one – Hill Solar in Portage Township, one of the largest in the state – is in service.
According to PJM Serial Service Request status, there are 44 projects in the queue for Somerset County, of which three are in the engineering and procurement stage and 18 are "active" but do not have interconnection or wholesale agreements, which are signs that the developers are willing to bear the cost to build and not drop the project, Conklin said.
Demand growing
In PJM’s territory, a significant amount of load growth and demand for clean energy is driven by new data centers built by companies with the goal of supplying their centers with green energy. Google, Meta, Microsoft, Amazon and Iron Mountain are some of the largest data center operators in PJM territory.
By 2040, PJM’s demand for energy will increase above the 2024 load forecast by approximately 8%. The expected scenario forecast may still be conservative, given continued announcements of new manufacturing facilities and data centers, according to a June analysis by the consulting firm Grid Strategies.
This year, Energix, a global renewable energy company, anticipates breaking ground at a former coal mining area in Paint Township, off Route 601 in Somerset County, for a 15-megawatt solar facility which could be operational through the PJM system by 2025.
It has been years in the making, Energix vice president of development and mergers and acquisitions Seth Christman said.
Energix is an independent power producer with global headquarters in Israel and U.S. operations based in Virginia. It builds its projects from the ground up and partners with utility companies who purchase its power to serve local demand, Christman said.
Corporate customers may also purchase power generated from the company as they look to offset their emissions or their greenhouse gas or environmental footprint, he said.
“There is a tremendous amount of growth in this particular power market of PJM, most notable in the load that is being demanded by all the data centers coming out Virginia and elsewhere by big tech firms but also generative artificial intelligence is going to be the new major power consumption on the grid," he said. "And so, renewables are certainly seen as a low-cost, low-impact to the environment electrical generation source that is certainly incentivized in a lot of locations for development.”
Once the project is in operation, its electricity generation, enough to power 3,800 homes, will be sent to the lines at the project in Somerset, and from there become part of the PJM grid, he said.
The power will flow to the grid and be consumed by everyone in the PJM system — the homeowners in the local area of Somerset as well as the data centers in Virginia, he said.
It’s one project of many for the company, which aims to continue to increase its pipeline.
“We have over 700 megawatts in operation,” Christman said. “Currently, most of that is in the United States. We would certainly like to have a pipeline that increases above a gigawatt and we are trying to get there sustainably, not do more than what we can execute responsibly.”
Its project in Somerset County is sited on formerly mined coal land.
“The industry as a whole, but especially Energix Renewables, has shifted to siting projects where we can on brownfields as opposed to agricultural land,” Christman said.