Biden admin policy change could tip solar and wind projects into profitability

There’s an idea floating in the ether (or at least in my ether) that there’s enough sunny federal land in Nevada to power the entire United States with solar.

Some very rough back-of-the-envelope math suggests it’s possible, requiring just over 11% of Nevada’s federal land. None of that includes room for batteries for storage or the massive transmission wires needed to export it all — both of which would expand the footprint significantly — and a concentrated installation like that wouldn’t be very resilient or ecologically sound. 

The point is, there’s room to spare! The federal government owns plenty of land in other sunny and windy places, not just Nevada.

So why don’t we have more solar and wind on public lands?

The Biden administration is hoping to remove at least one roadblock. This week, the Department of the Interior announced 50% cuts in rent and capacity fees (a fee assessed based on how much power is produced) in an effort to spur more solar and wind development on federal land. (Geothermal doesn’t get any love in this policy change for whatever reason.) Utility-scale wind and solar projects can incur lease fees of millions of dollars per year, so the boost could be significant.

Renewable developers have long complained that federal lease rates are too expensive to be profitable, and a 2019 Bureau of Land Management analysis suggests that’s true — while oil and gas production on federal lands produced $75.8 billion in economic activity, with coal adding another $9.7 billion, renewable power only produced $2.9 billion. Something’s getting in the way.

“Until these overly burdensome costs are resolved, our nation will likely miss out on living up to its potential to deploy homegrown clean energy projects on our public lands — and the jobs and economic development that come with it,” Gene Grace, general counsel for the American Clean Power Association, told Reuters.

Oil and gas companies lease 26 million acres of public land, about half of which is in production. That’s a significant footprint, and one that does not include land needed for pipelines, refineries and so on, yet they incur lease and royalty rates that are far lower than renewable power ($1.50 to $2 per acre plus 12.5% royalties on any oil and gas produced).

The current amount of renewable power on federal land, on the other hand, is probably barely enough for a toenail clipping. There’s so little of it that I couldn’t find a report that tallied it all up; the best I could come up with was “prioritized areas” for future development, and those are an order of magnitude lower than what oil and gas are currently exploiting. 

Land availability is hardly the biggest impediment to widespread renewable power. There will be supply chain issues, materials headaches, snarled permitting processes and so on. Still, hitting net-zero by 2050 will require massive amounts of land — about 230,000 square miles, according to a report from Princeton University researchers. That’s not nothing.

At that scale, wind and solar installations are likely to hit resistance from NIMBY (not in my backyard) groups.

Federal property seems like some low-hanging fruit. The federal government won’t be immune from public pressure, but there’s plenty of federal land that’s pretty remote, potentially subjecting it to fewer complaints. 

More immediately, the policy change could tip some projects to profitability and potentially lower the cost of electricity at the same time. Solar and wind are cutthroat industries, and margins are famously thin. If we’re going to get to net-zero, every little bit will help.