Encouraged by Massachusetts’ commitment to renewable energy and a federal Environmental Protection Agency (EPA) program called “Re-Powering America’s Land Initiative,” an increasing number of Massachusetts cities and towns are siting commercial and utility-scale solar and other renewable energy projects on contaminated properties. For many communities, these clean and renewable energy projects are a long-awaited reuse of properties that have sat idle for decades.

Massachusetts has 49 renewable energy projects sited on contaminated properties – the most of any state in the nation – with an installed capacity of 104.6 megawatts (MW) as of 2014, according to the EPA. For example, in Scituate, a closed municipal landfill was transformed into a solar installation that, in combination with a nearby wind turbine, provides 100 percent of municipal power needs. In New Bedford, 10 acres of remediated land holds more than 5,000 solar panels that will save the city more than $2.7 million in energy costs over the next 20 years. And in Pittsfield, a solar project on the site of a former manufacturing facility generates about $150,000 a year in property taxes.

Brownfields Are Suitable Candidates

Brownfields – typically former industrial or commercial properties that are contaminated – are a challenge for communities. Many of these properties are located in urban and industrial neighborhoods, but their history of contamination and environmental stigma scare potential developers. But these former industrial sites and municipal and hazardous waste landfills may have potential to be redeveloped into productive renewable energy projects. First, they often are located close to crucial infrastructure, such as electric transmission lines and substations, roads and water supply. Second, they may comprise large land areas suitable for renewable energy development, and they already may be zoned and permitted to accommodate such redevelopment. Further, state and federal financing and tax incentives and other project benefits may exist to encourage their redevelopment.

As of October 2014, the EPA had identified renewable energy projects on contaminated properties in 34 states. Due to Massachusetts’ Renewable Portfolio Standards, its solar carve-out policy in support of the state’s goal of 1.6 gigawatts of solar energy by 2020, its Solar Renewable Energy Credit program and other incentives, the state has been a pioneer in encouraging this type of redevelopment. Other states, such as New Jersey, California and New York, are close behind in both the number of installations and installed capacity.

The federal program provides further benefits, such as allowing property remediation costs to be fully deducted in the year incurred, rather than capitalized and spread over a period of years. In addition, the EPA offers liability protection to those who meet requirements under federal statutes like the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and the Resource Conservation and Recovery Act (RCRA). Protections of this nature can help overcome environmental stigma that may attach to contaminated properties and prevent their redevelopment for productive use.

Risk Assessments, Strategies Crucial

While brownfields may provide property owners and renewable energy developers with significant opportunities, such investments also carry risks. Project risk assessments and mitigation strategies should address:

Location: It is essential to locate the right brownfields property. The site engineering must be appropriate for redevelopment, such as proximate location to infrastructure and sufficient sized acreage. For example, solar projects often require more than 20 acres to be financially viable. Furthermore, it may be more prudent to choose a property where remediation has been completed and the owner has received a “no further action letter” from the Massachusetts Department of Environmental Protection (DEP).

Liability: Liability risks must be addressed and managed. The EPA and Massachusetts DEP have developed a variety of discretionary enforcement policies and property-specific documents to encourage cleanups and facilitate contaminated property transactions and revitalization. The liability risk can also be mitigated, for example, through indemnity clauses in purchase and sale agreements or leases that allocate liability to the owner or responsible party, as well as through environmental insurance policies to cover future unknown risks.

Regulatory approval: Before proceeding with a renewable energy project, a site may be subject to institutional or engineering controls that require approvals from appropriate regulatory agencies.

Financing: A renewable energy project likely will need financing. Many traditional banks and equity providers may be reluctant to finance a project on a brownfield property. It is critical to identify financing partners who understand the liability protections provided to project lenders, and who are willing to support such projects.

Redevelopment of brownfields with renewable energy facilities can be a win-win proposition for all parties involved – property owners, developers, financiers and communities – with cleaner energy produced on otherwise non-productive land. A well-structured business plan can help realize opportunities, while utilizing available incentives and liability protections.

Jeffrey M. Karp, Jerome C. Muys Jr. and Van P. Hilderbrand Jr. are environmental law attorneys with Sullivan & Worcester. Email: jkarp@sandw.com; jmuys@sandw.com; vhilderbrand@sandw.com.