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It’s another bad day for the renewable energy business.
The ill tidings started early Friday morning with SolarEdge, a company that primarily sells inverters, which convert the electricity produced by a solar panel into the kind that can be used in homes.
In an unexpected announcement, SolarEdge’s chief executive Zvi Lando said that, in the third quarter, the company had “experienced substantial unexpected cancellations and pushouts of existing backlog from our European distributors.” Many of its core financial metrics, including revenue and operating income, would fall below the low end of the range it had projected earlier, SolarEdge warned. The company also said it expected “significantly lower revenues in the fourth quarter.” (SolarEdge is based in Israel but the company said that the Hamas-Israel war was not related to their financial troubles.)
Investors promptly panicked, selling off the stock and sending it down 27% in trading Friday afternoon.
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Other solar stocks were also down. Enphase, another solar services and inverter company, tumbled 14%. Sunrun, a residential solar systems company (which means it actually installs panels), was down 6%. Shares in SunPower, a competitor to Sunrun, were down around 9%.
With today’s trading, SolarEdge has fallen more than 70% in the past year. And those other companies aren’t too far behind — they’re all down around 50% to 67% on the year.
The worry is that the problems SolarEdge identified are not unique to the company itself or even the inverter business, but to the solar industry as a whole.
The company said that its European business had both a pileup of inventory and “slower than expected installation rates,” specifically “at the end of the summer and in September where traditionally there is a rise in installation rates.”
In a note to clients earlier this week, Citi analyst Vikram Bagri noted that downloads of solar apps in Europe, which can be used as a proxy for sales, “declined sequentially … in September, we typically observe sequential acceleration in downloads exiting the seasonally slower August period.”
But Friday’s troubles were not restricted to solar.
In New York, the offshore wind business took another hit from the state government. Governor Kathy Hochul, a Democrat, vetoed a bill passed this summer which would have kickstarted the regulatory process necessary to connect a transmission cable from the planned Empire Wind 2 project on the south shore of Long Island to a substation in Island Park, which is just slightly inland.
In her veto message, Hochul said that the onus was on Empire Wind 2’s developer, Equinor, and other companies in the offshore wind business “to cultivate and maintain strong ties to their host communities throughout the planning, siting, and operation of all large-scale projects,” adding that the Long Beach city council did not support using the beach for the project.
Wind projects are no stranger to local opposition — hostility to such projects on land actually increased between 2000 and 2016. Proponents of offshore wind thought that they could avoid this type of local opposition because the planned projects are out to sea, typically out of sight from residents, but the infrastructure necessary to bring the power generated offshore to homes and businesses still requires building transmission cables and substations on land.
The planned Empire Wind 2 would have 1,260 megawatts of capacity to serve downstate New York, the most populous region of the state and one that depends largely on fossil fuels for electricity generation. State law mandates that New York as a whole generate 70 percent of its electricity by 2030, but that goal will be imperiled if renewable energy projects aren’t built to serve the New York City area.
“The veto of ‘The Planned Offshore Wind Transmission Act’ undermines New York’s commitment to the energy transition and the role offshore wind must play in achieving the state’s renewable energy mandates. This decision sends another troubling signal to renewable energy developers following last week’s action by the New York State Public Service Commission,” Molly Morris, the president of Equinor Renewables America, told me in an emailed statement.
Hochul’s veto came a week after the state’s utility regulator refused to adjust contracts for renewable projects, including four offshore wind projects, after companies saw much higher costs than expected.
And those higher costs aren’t just in offshore wind. The entire renewables sector is in trouble, at least for now.
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Solar and wind projects will take the most heat, but the document leaves open the possibility for damage to spread far and wide.
It’s still too soon to know just how damaging the Interior Department’s political review process for renewables permits will be. But my reporting shows there’s no scenario where the blast radius doesn’t hit dozens of projects at least — and it could take down countless more.
Last week, Interior released a memo that I was first to report would stymie permits for renewable energy projects on and off of federal lands by grinding to a halt everything from all rights-of-way decisions to wildlife permits and tribal consultations. At minimum, those actions will need to be vetted on a project-by-project basis by Interior Secretary Doug Burgum and the office of the Interior deputy secretary — a new, still largely undefined process that could tie up final agency actions in red tape and delay.
For the past week, I’ve been chatting with renewables industry representatives and their supporters to get their initial reactions on what this latest blow from the Trump administration will do to their business. The people I spoke with who were involved in development and investment were fearful of being quoted, but the prevailing sense was of near-total uncertainty, including as to how other agencies may respond to such an action from a vital organ of the federal government’s environmental review process.
The order left open the possibility it could also be applied to any number of projects “related to” solar and wind — a potential trip-wire for plans sited entirely on private lands but requiring transmission across Bureau of Land Management property to connect to the grid. Heatmap Pro data shows 96 renewable energy projects that are less than 7 miles away from federal lands, making them more likely to need federal approval for transmission or road needs, and another 47 projects that are a similar distance away from critical wildlife habitat. In case you don’t want to do the math, that’s almost 150 projects that may hypothetically wind up caught in this permitting pause, on top of however many solar and wind projects that are already in its trap.
At least 35 solar projects and three wind projects — Salmon Falls Wind in Idaho and the Jackalope and Maestro projects in Wyoming — are under federal review, according to Interior’s public data. Advocates for renewable energy say these are the projects that will be the most crucial test cases to watch.
“Unfortunately they’ll be the guinea pigs,” said Mariel Lutz, a conservation policy analyst for the Center for American Progress, who today released a report outlining the scale of job losses that could occur in the wind sector under Trump. “The best way to figure out what this means is to have people and projects try or not try various things and see what happens.”
The data available is largely confined to projects under National Environmental Policy Act review, however. In my conversations with petrified developers this past week, it’s abundantly clear no one really knows just how far-reaching these delays may become. Only time will tell.
We’re looking at battles brewing in New York and Ohio, plus there’s a bit of good news in Virginia.
1. Idaho — The LS Power Lava Ridge wind farm is now facing a fresh assault, this time from Congress — and the Trump team now seems to want a nuclear plant there instead.
2. Suffolk County, New York — A massive fish market co-op in the Bronx is now joining the lawsuit to stop Equinor’s offshore Empire Wind project, providing anti-wind activists a powerful new ally in the public square.
3. Madison County, New York — Elsewhere in New York, a solar project upstate seems to be galvanizing opposition to the state’s permitting primacy law.
4. Fairfield County, Ohio — A trench war is now breaking out over National Grid Renewables’ Carnation Solar project, as opponents win a crucial victory at the county level.
5. El Paso County, Colorado — I don’t write about Colorado often, but this situation is an interesting one.
6. St. Joseph County, Indiana — Something interesting is playing out in this county that demonstrates how it can be quite complicated to navigate municipal and county-level permitting.
7. Albemarle County, Virginia — It’s rare I get to tell a positive story about Virginia, but today we have one: It is now easier to build a solar farm in the county home to Charlottesville, one of my personal favorite small cities in our country.
Getting local with Matthew Eisenson of Columbia Law School’s Sabin Center for Climate Change Law.
This week’s conversation is with Matthew Eisenson at Columbia Law School’s Sabin Center for Climate Change Law. Eisenson is a legal expert and pioneer in the field of renewable energy community engagement whose work on litigating in support of solar and wind actually contributed to my interest in diving headlong into this subject after we both were panelists at the Society of Environmental Journalists’ annual conference last year. His team at the Sabin Center recently released a report outlining updates to their national project tracker, which looks at various facility-level conflicts at the local level.
On the eve of that report’s release earlier this month, Eisenson talked to me about what he believes are the best practices that could get more renewable projects over the finish line in municipal permitting fights. Oh — and we talked about Ohio.
The following conversation was lightly edited for clarity. Let’s dive in.
So first of all, walk me through your report. How has the community conflict over renewable energy changed in the U.S. over the past year?
A few things I would highlight. In Ohio, we now have 26 out of 88 counties that have established restricted areas where wind or solar are prohibited. These restrictions are explicitly enabled by the state law, SB 52. I’d also highlight that while the majority of litigation in our database is state-level litigation and contested case administrative proceedings, there are certain types of projects — particularly offshore wind — that have an extremely high prevalence of federal litigation. A majority of federally permitted offshore wind projects have been subject to federal lawsuits. The plaintiffs in these lawsuits have never succeeded on the merits, but they keep filing them and they drive up costs.
In general, as a topline takeaway, [our] report shows more and more of the same.
You personally do quite a bit of legal work on solar and wind permitting battles in the state of Ohio, where as you noted counties are curtailing deployment left and right. What’s your bird’s eye view of the situation in the state right now?
So Ohio has for years had a state-level siting process. The Ohio Power Siting Board reviews all applications for large-scale energy generation facilities, 50 megawatts or larger. The Siting Board has a set of criteria they are required to apply when they are reviewing an application, but basically only one of them seems to matter in deciding whether a project is approved or denied: whether the project serves the public’s convenience and necessity.
We’re seeing that in the majority of proceedings for approvals of large-scale wind and solar projects, there will be groups that intervene in opposition to the project, and often these groups will argue that there is so much local opposition that the project cannot possibly serve the public interest.
The Power Siting Board has been rejecting that argument in important cases recently. The board is still putting substantial weight on whether local governments are supportive or not supportive of a project, but are not rejecting projects just because of a demonstration of local opposition.
Say you’re a developer and you start facing opposition. What is the right legal avenue? How should they do the calculus, so to speak, on how to navigate legal options?
There’s numerous things developers can do. They can work with the local government and community-based groups to work with the local government to craft host community agreements, community benefit agreements — voluntary but binding contracts with the local community where a developer provides benefits; in exchange, community-based groups would agree to support the project, or at least not to oppose it. These can be very helpful and particularly meaningful in places where a local government itself is not in charge of permitting decisions themselves. So in a state like Ohio, if a developer negotiates host benefit agreements with local township governments and then those governments don’t turn around to intervene against a project, those would be extremely helpful.
It’s also important for developers to do community outreach and build a base of local supporters, and get those supporters to turn out at public meetings. Historically opponents of projects are more motivated to show up at a local meeting than supporters, but it’s really not a good look for a project when you have 500 turn out against it and 10 turn out to support.
For years the opponents were very proactive. There would be a proposal for a project in one county in Kansas and a group of opponents in the neighboring county would propose a restrictive ordinance to block future projects — supporters weren’t thinking proactively in the long-term. I think a concentrated effort will produce meaningful results. But they’re behind.