DC Circuit rules in favor of solar energy in PURPA Eligibility Case

WASHINGTON — In a victory for nationwide renewable energy, the U.S. Court of Appeals for the D.C. Circuit upheld the decision of the Federal Energy Regulatory Commission to grant “qualifying facility” status to Broadview Solar’s solar-plus-storage facility in Montana. The decision paves the way to make the nation’s transition to a zero-carbon grid faster and cheaper and provides a critical backstop for independent renewable energy development in an industry still dominated by monopoly utilities.

The Southern Environmental Law Center represented the North Carolina Sustainable Energy Association, the South Carolina Coastal Conservation League, and the Southern Alliance for Clean Energy (SACE) on a friend-of-the-court brief, filed jointly with a number of separately represented nonprofits and solar developers including the Oregon Solar + Storage Industries Association (OSSIA) and the Community Renewable Energy Association (CREA).

Having “qualifying facility” status entitles a facility to a variety of protections under the Public Utility Regulatory Policies Act (PURPA), including the ability for the facility to sell all of the power it produces.  In large parts of the country without organized markets, such as the Southeast and much of the Northwest, this is an important way for independent power producers to operate. Achieving “qualifying facility” status can make or break independent renewable energy production.

The Broadview facility uses solar-plus-storage, meaning it has an array of solar photovoltaic panels as well as a large battery. The question in the case was whether Broadview Solar qualified as a “small power production facility,” which is a certain type of “qualifying facility” due to its power generation capacity. Under PURPA, the maximum power production capacity of a small power production facility is 80 megawatts (MW).  The utility purchasing Broadview Solar’s electricity challenged its application for “qualifying facility” status on the grounds that its solar array was larger than the 80 MW limit.  FERC ultimately found that Broadview’s facility qualified because the statute refers to the “facility” as a whole, which includes the inverter, and its power production capacity should be measured by its grid-usable AC output.  The D.C. Circuit found this decision “eminently reasonable.”   

As the price of both solar panels and batteries have decreased sharply in recent years, it is becoming increasingly economical to expand solar capacity and add storage to create ‘hybrid’ power plants like Broadview Solar. This increases the amount of renewable generation on the grid and also allows these facilities to deliver power to the grid more smoothly and over a longer period of time. This makes the grid function better and will be increasingly important as the percentage of renewable generation on the grid increases.

The D.C. Circuit’s decision will help to make the transition to a zero-carbon grid faster and cheaper. It is particularly important federal protections provide a critical backstop for independent renewable energy development in a region still dominated by monopoly utilities.

“This is a good day for low-cost independent power and carbon reduction.  Solar-plus-storage facilities like Broadview’s facility can supply zero-carbon electricity during peak periods and even at night, often at lower cost than even the cheapest fossil-based power plants,” said Nick Jimenez, Staff Attorney at the Southern Environmental Law Center. “And under PURPA they are paid at or below the utility’s ‘avoided cost,’ or what it would have paid to make the electricity itself, so consumers come out ahead.”

“This ruling has leveled the playing field for independent power producers,” Bryan Jacob, Solar Program Director at SACE, said. “The court has justly recognized that if an 80 MW(ac) biomass or hydro facility is allowed to store fuel on-site and generate 1,920 MWh per day, then a solar facility with storage should be able to generate and supply the same amount. We cannot punish solar energy for not operating 24/7. PURPA didn’t say 80 MW ‘but only during daylight hours’.”

“This is a common-sense result. The D.C. Circuit confirms what, in large part, has been an already accepted decision on solar power plants as qualifying facilities,” said Eddy Moore, Energy Program Director at the SC Coastal Conservation League. “This latest ruling will help to strengthen solar energy’s position amid increasingly contrived legal challenges.”