USSP_QuarterlyLegislativeReport_2024-03-01

Report to the North Carolina General Assembly
Environmental Review Commission and the Joint
Legislative Commission on Energy Policy
e:OA fD
NORTH OAROI IN!", mmEQ
Department of Environmental Quality
Second Quarterly Report on the
Utility -Scale Solar
Management Program
March 1, 2024
Division of Waste Management, Division of
Environmental Assistance and Customer
Service
NORTH CAROLINA DEPARTMENT
OF ENVIRONMENTAL QUALITY
Pursuant to SL 2023-58, Section 2.(d)

Table of Contents
A. Executive Summary...................................................................................................................................1
B. Background................................................................................................................................................2
C. Program Activities and Outreach...............................................................................................................3
D. Rulemaking................................................................................................................................................4
E. Registration and Fee..................................................................................................................................5
F. Recommendations......................................................................................................................................6

A. Executive Summary
In accordance with Session Law 2023-58, s. 2.(d), Beginning December 1, 2023, through December 1, 2025,
the Department of Environmental Quality (DEQ) is submitting quarterly reports to the Environmental
Review Commission and the Joint Legislative Commission on Energy Policy on implementation of the
requirements of Section 2 of S.L. 2023-58, including program development and the status of the
rulemaking. These requirements are fulfilled in the following report, which is the second of nine quarterly
reports.
This report includes:
• An update on outreach efforts with local governments organizations, the Department of
Commerce, and the NC Utilities Commission and Public Staff.
• An update on the development of draft rules.
• An update on the development of the registration form, process, and database.
• Recommendations to the General Assembly.
1I7

B. Background
North Carolina S.L. 2023-58 requires the owner of a utility -scale solar project capable of generating two
(2) or more megawatts (MW) alternating current (AC) that is directly connected to the electrical grid to:
• Properly decommission the project upon cessation of operations and restore the property.
• Register with the DEQ and pay a fee.
• Submit a decommissioning plan and establish financial assurance for new and rebuilt/expanded
utility -scale solar projects.
S.L. 2023-58, which included the addition of Article 9 Part 2J of Chapter 130A of the General Statutes (G.S.
130A-309.240 through 130A-309.243) and G.S. 130A-309.06(c)(21), made DEQ the lead agency in the
statewide administration and enforcement of utility -scale solar project registration, decommissioning, and
financial assurance program for new projects, and for enforcing the new state -level statutory registration
and decommissioning requirements for existing utility -scale solar projects.
Prior efforts and research that led up to the legislation in S.L. 2023-58 and the information presented in
this report can be reviewed in the following prior legislation and subsequent reports/plans submitted to
the General Assembly as required in the respective legislation:
S.L. 2019-132 (H329)
• The EMC and DEQ evaluated the end -of -life management of renewable energy equipment and
summarized the evaluation in the January 1, 2021 "Final Report on the Activities Conducted to
Establish a Regulatory Program for the Management and Decommissioning of Renewable Energy
Equipment."
S.L. 2021-165 (H951)
• DEQ evaluated options for the decommissioning of utility -scale solar projects and financial
assurance and summarized the evaluation in the March 1, 2022 "Plan and Recommendations for
Financial Resources for Decommissioning of Utility -Scale Solar Panel Proiects."
Page 2 17

C. Program Activities and Outreach
DEQ created the Utility -Scale Solar Management Program under the Division of Waste Management to
administer and enforce the requirements of S.L. 2023-58 and subsequent rulemaking. The Utility -Scale
Solar Management Program webpage can be accessed at this link:
https://www.deq.nc.gov/about/divisions/waste-management/utility-scale-solar-management-program
The webpage was recently updated to include information on the required annual and quarterly reports.
This webpage will continue to be updated throughout program implementation as changes occur. The
webpage currently has the following information:
• an overview of the program and its purpose and applicability,
• a link to S.L. 2023-58,
• program and rulemaking status,
• copies of quarterly reports submitted to the General Assembly;
• answers to anticipated questions,
• program contact information, and
• links to fact sheets and additional guidance.
To ensure collaboration between agencies and a smooth program start-up in 2025, DEQ has been reaching
out to stakeholders regarding this program. Activities and outreach for August to October 2023 are
summarized in the first Quarterly Report (dated December 1, 2023). Below is a list of outreach conducted
between November 2023 and January 2024:
• Met with the Department of Information Technology (DIT) to continue development of the
online registration form, the fee invoicing and payment system, the database for site inventory
and compliance, and the routing and review process for decommissioning plans and financial
assurance mechanisms.
• Presented on the program at the Air and Waste Management Association, 48th Annual Air
Information Exchange.
• Met with a targeted group of stakeholders including solar developers and engineers for input
on rulemaking.
In an effort to identify existing incentives and grant programs that may be used to encourage research and
development on recycling and reuse of photovoltaic (PV) modules and to facilitate growth of the State's
PV module recycling and reuse industry, the Department of Commerce (DOC) and DEQ wrote letters of
support for prospective applicants to the U.S. Department of Energy's Solar Energy Technologies Office
Materials, Operations, and Recycling of Photovoltaics MORE PV) grant opportunity including an
electronics recycler expanding their operations in NC. This grant provides up to $20 million over three
years for research and development projects to create innovative and practical approaches to increase the
reuse and recycling of solar energy technologies. The application for the electronics recycler did not
progress past the first stage, however they are a contributing team member along with DEQ and DOC
participating with another applicant that did progress to the second stage.
317

D. Rulemaking
DEQ staff in the Division of Waste Management are drafting proposed rule language and an associated
fiscal note and working with stakeholders to attempt to address initial concerns, where possible, prior to
publishing the proposed rules for public comment. The rules will need to be effective early enough to give
project owners time to register, pay the fee, and submit any required decommissioning and financial
assurance documentation prior to the Session Law deadline of November 2025.
Proposed Rulemaking Schedule (subject to change):
ED 7End
May 2024 ng of 60-day public comment period for rules
July 2024 omment period for rules
October 2024 Goal for DEQ to adopt rules
December 2024
January 2025
August 2025
Rules Review Commission Meeting for approval of rules
Goal for Effective Date of Rules
Session Law Deadline for DEQ rule adoption
Proposed Rule Structure/Outline (subject to change):
• .0101 Applicability and Definitions
• .0102 Registration and Fee Requirements
• .0103 Registration Fee Amount
• .0104 Decommissioning and Cost Estimate Requirements
• .0105 General Requirements for Financial Assurance
• .0106 Amount of Financial Assurance and Periodic Updates
• .0107 Allowable Mechanisms for Financial Assurance
• .0108 Required Language for Financial Assurance Mechanisms
Page 417

E. Registration and Fee
DEQ is working with DIT to develop an all -in -one electronic/online platform solution for the registration
form and review process, the database for site inventory, invoicing and payment of the registration fee,
and the five-year registration updates. The platform should allow project owners to create an account
online where they can do the following:
• register all of their utility -scale solar projects;
• upload copies of decommissioning plans and financial assurance mechanism documents;
• view and pay invoices for the registration fee; and
• update the project information every five years to complete the registration update requirements.
Once the platform is nearing completion, DEQ expects to demonstrate the platform for stakeholders to
solicit feedback on the design, prior to making the platform live for use by project owners in February
2025.
517

F. Recommendations
DEQ requests the North Carolina General Assembly's consideration on the following recommendations.
• Provide resources for DEQ to administer the program through general appropriations.
Currently, the only funding associated with the program is available after the collection of the fees
associated with registration, which is effective November 1, 2025. The mandated fees are
recurring only every five years, and the amount of the fee still must be determined through
rulemaking including a public comment period. To be able to cover the FTEs required to operate
the program, the fees would be substantial and would likely receive negative public comments.
Work performed to start up the program and to comply with mandated requirements of S.L. 2023-
58 is currently done by existing employees in addition to their regularly assigned workload. In the
short term, priorities have been shifted and triaged to be able to meet the mandates of S.L. 2023-
58; however, this is not a long-term solution nor is it sustainable. The utility -scale solar project
decommissioning and financial assurance program needs to be adequately funded to be
successful.
• Require counties to review and repeal/amend duplicative or less stringent requirements that
apply to utility -scale solar projects after November 1, 2025.
In 2021, there were 60 North Carolina counties that already had financial
assurance/decommissioning requirements in county ordinance (Plan and Recommendations for
Financial Resources for Decommissioning of Utility -Scale Solar Panel Projects, March 1, 2022).
S.L. 2023-58 allows for decommissioning/financial assurance requirements more stringent than
the statewide minimum standards to be retained by counties. For existing projects (constructed
prior to November 1, 2025), counties may continue to administer any financial assurance
requirements included in county ordinances. For projects that are constructed after that deadline,
counties may continue to administer any decommissioning or financial assurance requirements
that are more stringent than the new state requirements included in S.L. 2023-58. However, S.L.
2023-58 is not clear on what to do if/when counties maintain decommissioning/financial
assurance requirements in their county ordinance that are duplicative with state requirements
and will apply to utility -scale solar facilities that are constructed after November 1, 2025.
To ensure there are no duplicative requirements and to reduce confusion for the regulated entities
and the entities administering the program, the General Assembly could mandate that counties
review ordinances related to utility -scale solar projects and repeal and/or amend county
ordinance to ensure any decommissioning/financial assurance requirements that still apply to
utility -scale solar projects constructed on or after November 1, 2025 are not duplicative or less
stringent than the requirements established by the statewide program.
• Provide resources to encourage economic development of recycling or reuse of solar panels.
North Carolina's recycling industry currently employs over 15,000 people in more than 500
businesses. The strength of the industry provides the state with a unique opportunity to take
advantage of the burgeoning market for solar panel recycling. In fact, North Carolina is already
home to the first dedicated solar panel recycling line on the east coast. Further resources may be
AE

needed, however, to keep North Carolina businesses in a leading position. While S.L. 2023-58
mandated that the Department of Commerce identify existing incentives and grant programs that
may be used to encourage research and development on recycling and reuse of PV modules and
to facilitate growth of the State's PV module recycling and reuse industry, the North Carolina
General Assembly did not allocate any financial resources to encourage the economic
development of this industry.
717