Defining Power Property Expectations

• Date: 01 June 2015

45 ELR 10542 ENVIRONMENTAL LAW REPORTER 6-2015

Def‌ining Power Property

Expectations

by Michael Pappas

Michael Pappas is an Assistant Professor of Law at the University of Maryland Francis King Carey School of Law.

I. Introduction

To date, most government eorts to promote distributed

solar energy have involved incentivizing property owners to

undertake voluntary instal lations. However, that approach

is changing, as government actors move to increase distrib-

uted solar generation capacity not only through incentive

programs, but also through requirements. Such a change

from voluntary to mandatory measures represents a seismic

shift in the approach to encouraging distributed solar gen-

eration, and it may raise objections about interference with

property expectations.

e Com ment add resses those concerns by exploring

the nature of propert y expe ctat ions in the energy con-

text a nd analyz ing how c ourt s and legislatures have ba l-

anced propert y expec tations against pa st govern ment

measu res to encourage energy production and devel-

opment of underexploited resou rces. e Comment

conclude s that throughout the h istor y of ene rgy devel-

opment in the United States, propert y owne rs’ expec-

tation s h ave been understoo d to accommodate socially

benecial ene rgy pr oduction, and t hat the concer ns sur-

roundi ng t he promotion of di stributed s olar generation

couns el a s imil ar approach.

II. Promoting Distributed Solar

Installation

Distributed solar generation, such as solar installations on

residential or commercial rooftops, represents an energy

resource with great potential. Using largely unharnessed

areas of already developed properties for on-site energy

generation presents overlapping benets, such as increased

clean energy production without additional energy sprawl

or transmission concerns.1 Moreover, if ma ny distributed

solar energy sources are aggregated, that can lead to a sub-

stantial cumulative societal benet.

Aggregating distributed solar sources, however, is

an inherent challen ge to m axi mizin g their benet. To

reach the full potential of this energy source, both in

terms of production capacity and in ter ms of network

or microgrid eciencies, 2 re quires mass part icipation.

Quite simply, the more distr ibuted generators there are,

the great er the impac t of distributed gener ation. But

because distributed power sources are, almost by de-

nition, located across mu ltiple properties with mu ltiple

owners, the installation of mass- distr ibuted generation

capacit y require s the coord inated activit y of multiple

private a ctors, w hich c an be dicu lt.

As a relatively new energy technology, distributed solar

installation has had some success, but it still faces the chal-

lenges that many new technologies face in achieving broad

acceptance. Some property owners are uncertain about

adopting the technology, due to concerns over reliability,

uncertainty about benets relative to costs, or even cog-

nitive barriers t hat prevent rational investment.3 Further,

the lack of adoption may be self-perpetuating, with some

property owners waiting for w idespread acceptance before

investing themselves, while others await the price drop that

will likely accompany increased production of solar panels.

Finally, others may simply not wish to invest at all, per-

haps because they believe that rooftop solar installations

are not ae sthetically pleasing or because they are unlikely

to directly reali ze the benets.4 Whatever the cause, wide-

spread adoption of distributed solar generation has not yet

been realized, a nd the full potential of the resource has

been hampered by the a ssembly problems frequently asso-

1. See generally Michael Pappas, Energy Versus Property, 41 F. S. U. L. R.

435, 439-41 (discussing benets of distributed generation) [hereinafter Pap-

pas, Energy].

2. See, e.g., Sara C. Bronin, Curbing Energy Sprawl With Microgrids, 43 C.

L. R. 547, 559 (2010) (discussing microgrids and their benets).

3. See Pappas, Energy, supra note 1, at 441-43.

4. See, e.g., id. at 442 (“Landlords often have no incentive to invest in energy

eciency or renewable energy because the tenant pays the utility bill.”).

Author’s Note: is Comment is based on remarks at the Association

of American Law Schools’ Natural Resources and Energy Section

2015 annual conference.

Copyright © 2015 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.