Navigating end-of-life decisions for renewable energy projects
As renewable energy infrastructure matures, owners, operators and landowners face a critical decision: should a project be decommissioned or repowered? Both paths have significant technical, financial, environmental and legal implications — and the right choice depends on project condition, market factors and long-term goals.
Decommissioning: Responsible Project Closure
Decommissioning a renewable energy facility is a structured process designed to safely remove infrastructure, restore land and ensure compliance with environmental and regulatory requirements.
1. Removal of Equipment and Infrastructure
This involves dismantling and removing solar panels, wind turbines, electrical wiring, racks and associated hardware. It also includes breaking up concrete pads, foundations, fences and service roads.
2. Site Restoration
After equipment removal, the land is graded and reseeded to restore pre-project conditions, reduce erosion and promote natural vegetation.
3. Recycling and Disposal
Decommissioning often involves recycling valuable materials, such as glass, aluminum, copper and silver, which can account for up to 80% of solar panel weight. While landfill disposal is cheaper, it is typically avoided due to environmental harm.
4. Decommissioning Plan and Financial Assurance
A plan is developed before construction begins to guide decommissioning, detailing sequencing methods (reuse, recycling and disposal) and cost estimates. Financial assurance mechanisms like surety bonds, escrow accounts or trust funds ensure funds are available even if the developer defaults on development.
5. Triggers and Timelines
Common triggers for decommissioning include 12 months of inactivity or no energy delivered to the grid. Once triggered, decommissioning must be completed within a year, with exceptions for events considered force majeure such as natural disasters.
Repowering: Extending and Upgrading for the Future
Repowering takes an existing project and upgrades or replaces key components to boost efficiency, extend lifespan and increase output.
1. Wind Energy Repowering
In the wind sector, repowering can mean replacing blades, gearboxes and hubs – or installing entirely new, more powerful turbines on the same site. The result: more power generation from fewer turbines, while reusing existing grid connections.
2. Solar Energy Repowering
For solar, repowering often involves swapping older panels (e.g., 13% efficiency) for modern, higher-efficiency models (up to 23%), upgrading inverters and adding battery storage. This approach can double capacity without the delays of new grid interconnections.
3. Benefits of Repowering
Repowering existing projects can offer a number of practical advantages. By upgrading older equipment, projects can produce more electricity from the same land area, making use of space that is already dedicated to energy production. Repowering also extends the life of an asset, adding decades of continued productivity without starting from scratch.
4. Barriers to Repowering
High re-engineering costs, permitting complexities and compatibility challenges between old and new components can slow projects. Additionally, federal tax credit and tariff uncertainties may impact economics.
Landowner Considerations: Financial, Environmental and Legal Impacts
Whether a project is decommissioned or repowered, landowners are deeply affected in multiple ways:
1. Long-Term Land Use Commitment
Solar leases often span 25-45 years, covering development, construction, operation and decommissioning. This commitment affects future agricultural viability and overall land use planning.
2. Financial Implications
Landowners typically receive payments during all project phases, with the operational phase providing the highest income. However, decommissioning is costly — making it essential to ensure developers set aside adequate funds (via bonds or escrow) to avoid landowners being saddled with removal costs. Repowering may alter payment schedules and requires attention to revised lease terms.
3. Environmental and Agricultural Impacts
Both decommissioning and repowering can disturb soil and ecosystems. Landowners should negotiate detailed reclamation plans to protect wildlife habitats, vegetation and soil health. In some cases, agrivoltaic practices — combining solar power with agricultural use — can be maintained even after repowering.
4. Liability and Risk Management
Project phases carry liability risks, including environmental damage or injury. Leases should require developers to maintain liability insurance and indemnify landowners.
5. Legal and Contractual Protections
Decommissioning obligations are typically embedded in legally binding lease agreements, with defined timelines and financial assurances. Repowering can trigger renegotiation, making it essential to revisit and update decommissioning plans to ensure ongoing protection.
6. Property Value and Future Use
The presence of solar infrastructure can influence property value and future sale or inheritance decisions. Properly executed decommissioning ensures the land can be restored for future agricultural or other uses.
Choosing the Right Path: Key Considerations
The decision between decommissioning and repowering depends on:
- Asset age and condition: Structural and electrical health of the facility.
- Market incentives: Tax credits, energy prices and policy support.
- Environmental impact: Land restoration needs versus resource reuse potential.
- Community and landowner agreements: Contractual obligations and local acceptance.
Decommissioning ensures renewable energy projects are responsibly retired, protecting communities, landowners and the environment. Repowering, on the other hand, maximizes existing infrastructure, extends asset life and can offer significant economic advantages.
For landowners, whether there are plans to repower where feasible, or decommission where necessary, the most important part is to ensure all agreements include clear financial, environmental and legal safeguards.
Whether you are navigating a new renewable energy project lease agreement or reviewing and updating the terms of a current lease, REFA is here to protect your rights as a landowner. Join REFA today.
