Renewable developers feel impact of permitting woes
The project permitting process, on both the federal and local levels, has become a source of increasing frustration for renewables developers, particularly as the clock is ticking on tax incentives. Uncertainty and delays have added to project costs and made financing difficult to access.
A survey of 50 developers from tax credit operator and debt provider Crux found that for projects delayed or abandoned in the last 12 months, 94% of respondents cited federal permitting as a contributing factor, with at least 11GW of projects “materially impacted”.
The survey found that 80% of developers are “intentionally siting projects to avoid triggering federal permitting requirements", so regulatory avoidance is driving siting decisions rather than site selection where the power is most needed.
A total of 100% of developers reported higher-than-expected project costs due to federal permitting requirements, with 58% citing a 6%–10% increase in total project costs. For a typical 100MW solar project, this finding translates to US$10m–$14m in additional project costs, according to Crux’s analysis. Survey respondents said delays were typically more than six months and in some cases had increased project costs by as much as 25%.
Permitting reform has long been pushed by the oil and gas industry and negatively impacted interstate pipelines in particular. But the rapid scaling of clean energy has led to an estimated 60% of the projects in the National Environmental Permitting Act queue shifting to clean energy. The last decade has seen the expansion of jurisprudence related to permitting that was developed in the context of fossil fuel energy projects but has been expanded to clean energy as well. Transmission siting also figures as a critical concern, compounded by the first meaningful load growth in a generation.
“In the US, large-scale transmission lines take an average of ten years to build, with seven of those years spent in planning and permitting,” the report noted. “On federal land in the Southwest – home to some of America’s greatest solar potential – solar projects require an average of nearly five years to complete an environmental impact statement under the purely procedural National Environmental Policy Act process.”
Crux points out that federal permitting goes beyond energy projects being developed on public lands. Project developers are subject to federal scrutiny if a facility may impact animal species and habitats, water and wetlands, or historic properties, or if it receives federal funding or may be subject to Federal Aviation Administration obstruction evaluation.
Developers reached by the survey provided descriptions of the issues they encountered.
“A wind project got stuck in an extended NEPA review,” one respondent explained. “Agencies kept asking for more studies, stretching the schedule by roughly two years, driving up development costs, and making it much harder to line up financing and EPC contracts.”
Uncertainty on state and local permitting has been a source of growing frustration as citizens' groups are increasingly mobilising against wind, solar, and battery projects and in many cases successfully stopping them. The issue has been on display in Ohio in particular and Vesper Energy's proposed 175MW Kingswood solar project in Greene County, Ohio is the subject of a lawsuit pending in the Ohio Supreme Court, according to the Ohio Capital Journal. The case focuses on the veto power of local governments over clean energy projects as developers in the state have faced permitting difficulties and cancellations.
The Kingswood project's cancellation is part of a legal challenge with potentially “devastating consequences" for the state’s ability to grow its electricity generation capacity, Vesper's attorney has argued. “All of Ohio’s energy infrastructure will be affected by this decision,” said Michael Settineri of Vorys, who represents Vesper’s Kingswood solar project, in an oral argument before the court.
The developer says state regulators failed to consider whether public opposition was rooted in evidence, according to the report. Vesper alleges that the Ohio Power Siting Board failed to follow state law in its analysis of whether its project is in the public interest but used "the mere existence of local government opposition" as a reason to deny the project's permit, the report said, citing remarks from Settineri.
A lawyer for the Ohio Power Siting Board maintains that it has wide discretion to make policy judgements and it used “a broad lens” to make the decision.
In recent weeks the OPSB denied Open Road Renewables' request to build Crossroads Solar, a 94MW solar generation facility in Morrow County, according to online news source Knox Pages. Crossroads Solar proposed to construct the facility within a 726-acre project area in Cardington, Lincoln, and Westfield townships.
The OPSB found the project would fail to serve the “public interest, convenience, and necessity” as required under Ohio law based on opposition from the government entities within the impacted project area.
The board determined that any positive benefits from the project were outweighed by the "consistent and substantial opposition to the project by the area residents, as expressed through the local governmental entities", the report said. Concerns from residents included a "lack of commitment to local sheep grazing" and a "lack of trust from local governments due to the developer’s plans to sell the rights to another company before the facility is operational", the report said.
More than a quarter of the state’s counties have restricted or banned large solar projects, according to 10 WBNS News, and Open Road previously pulled an application in Logan County, Ohio after significant pushback. The company withdrew its application for the 500MW Grange solar agrivoltaic project in 2025 after the OPSB also deemed that project not in the public interest, according to Ohio Capital Journal.
