Unless you’re the Hudson’s Bay Company — which is in its 349th year — businesses don’t last forever.
According to the Small Business Association, 30% of businesses fail during the first two years of being open, 50% close during their first five years and two-thirds are gone by the end of their first decade.
Look around your neighborhood and reflect on the places that used to be. It doesn’t matter if it’s manufacturing, retail, agriculture, dining or service …corporations have a shelf life.
Why would we think that the solar industry would be any different?
Many companies that install and/or manage solar farms will go the way of the dinosaurs. It might be for reasons of ever-evolving technology, a decline in state and federal subsidies, the passing of owners, or future prices on the electrical market that could kill a company’s bottom line.
It’s guaranteed to happen.
And, when it does, they will leave a legacy.
Like the industrial brownfields of Niagara Falls or the hazardous waste pits in Wheatfield, it will be a bad legacy. Towns will be besieged by dozens if not hundreds of acres of solar arrays left standing, no electricity being taken, and no value in the structures. More than just eyesores, the unattended panels will sit like dead beasts on land that would otherwise have economic or natural value as farmland or forest.
That’s been a major concern for communities around the country and it is currently a hot button issue where I live in Gasport. Both of our towns are entertaining the idea of sizable solar farms — Royalton a 100-plus acre farm and Hartland a 1,500-acre complex.
Whether it happens in my community or elsewhere, mass solar development is inevitable. There’s somewhat of a push in the marketplace and it’s definitely a mandate here in New York.
Earlier this year, the state adopted the Climate Leadership and Community Protection Act, which diverts the state’s energy reliance to renewable sources. It requires 100% clean power by 2040, 70% by 2030.
Unlike previous attempts at green energy standards that didn’t have teeth, this time it’s real: The Department of Environmental Conservation is empowered to enforce emissions rules while the Public Service Commission is given carte blanche to impose clean energy standards upon the utility companies.
That means solar is our future, immediately and in the long-term.
But, for all the effort and posturing and preening state officials put into creating these standards, they put almost no thought into weathering what they’ve wrought. So, we’re left with the question, who will clean up solar energy’s legacy when these businesses expire?
We can’t wait for the state to respond when a crisis comes from what they thought was good intent. We’ve seen that before in the electrical market.
In the late 1970s and 1980s New York forced power companies to buy energy at what became costs twice that of the standard market rate from the numerous cogeneration facilities that had become wildly popular due to federal grants. Facing potential bankruptcy because of that edict, Niagara Mohawk used billions in junk bonds to buy out those government-mandated contracts and then, over a 14-year period put the cost of its efforts to save itself onto ratepayers. That state-induced salvation cost the average homeowner a total of $2,700 on power bills over those 14 years. Over that same time period, my company paid $4 million towards the surcharge.
You can easily see similar craziness happening again 15, 25 years from now, with the state mandating that electrical companies pay for the decommissioning of solar farms from which they were originally forced to buy. That massive cost, of course, would have to get pushed on to their customers.
It shouldn’t be that way. As communities affected by solar in our backyards, we need to demand that the Legislature produce answers now, well in advance of any closures and ahead of the push to go to a completely green grid.
What could they do?
They could create a sort of insurance fund managed by the State Comptroller that solar installers and solar providers would pay into every year of their existence that would cover the removal of equipment and remediation of the land in the event of their closure.
They could create an insurance marketplace in New York that could do the same.
They could mandate that property owners, who are gleaning the benefits of hearty payments, enter into similar insurance policies to have their land cleaned up in the event the solar company folds (after all, the decommissioning clause in their leases is meaningless if the company folds).
There are many more things they could do to mitigate these issues. But, it will take some serious discussions immediately, in the 2020 legislative session, to prepare for the future. Legislators, officials from the DEC, PSC and New York Independent System Operator need to come to the table with solar providers and come up with real plans.
The intent of solar today may be to make sure our kids don’t have to contend with a legacy of a spoiled environment but, when companies fold and technologies change, we’re certain to have some spoils because of the very existence of solar.
Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. Email him at email@example.com.