Lengthy federal permitting timelines are imperiling clean energy projects because of their high systemic costs and delays, prompting developers to restructure developments to avoid the process altogether, according to findings from the clean energy finance platform Crux.
A new survey that Crux released on Tuesday, shared exclusively with POLITICO, lands as a bipartisan group of lawmakers is pursuing comprehensive permitting reform legislation — and as the Trump administration has enacted new bureaucratic hurdles for solar and wind permits.
It also comes as electricity demand is skyrocketing, driven in part by data center growth, the push to expand electrification and new domestic manufacturing.
Crux surveyed 50 developers and permitting professionals in February who are specifically developing solar or wind projects across the country and have experience in the federal permitting process. A majority of the respondents are planning more than 1 gigawatt of projects this year.
Overwhelmingly, Crux found that process is “slowing clean energy projects,” said Hasan Nazar, the head of policy for Crux.
“There’s less energy being deployed and higher costs being incurred at a moment where we need those electrons more than ever,” Nazar said.
More than 80 percent of those surveyed said they intentionally site projects to avoid triggering federal permitting requirements and are making decisions based more on regulatory avoidance than where energy is most needed.
That can hurt states with significant federal lands, jurisdictions or resources, which, the report noted, ultimately lose out on development that would otherwise occur there.
“In general terms, it’s a market distortion that we don’t see a lot of people talking about,” Nazar said. “It means that the true cost of federal permitting in the system is probably undercounted because the projects that never get built don’t show up in the data.”
Every respondent to the survey reported having projects “materially” affected by federal permitting in the past 12 months, the survey found. That represented roughly 11 GW of capacity just across survey respondents last year — a figure Crux said likely understates the industry-wide impact.
Federal permitting was cited as a contributing factor to project delays and cancellations by 94 percent of respondents.
Those delays include a solar project stalled as much as 10 months by a late-stage biological survey or a storage project held up six months by an Endangered Species Act consultation, according to anecdotes detailed in the new report.
Respondents reported delays of more than six months on average in the past year, which translate into additional project costs.
Every respondent, Crux said, reported increased development costs and a majority cited a 6 to 10 percent increase in total project costs. Some respondents reported increases exceeding 25 percent.
The costs of development go up when things take longer or are more unpredictable, which ends up getting passed on to ratepayers, said Thomas Hochman, the director of energy and infrastructure policy at the Foundation for American Innovation, who wrote the report’s foreword.
“We’re in a moment of affordability politics, and permitting reform is one bipartisan way of getting at that issue,” Hochman said.
Lawmakers on the Hill are pushing for a breakthrough in the years-long effort to reach a compromise to update the federal permitting process. Developers in both renewable energy and fossil fuel industries have sought changes as environmental reviews and other procedural bottlenecks stall projects across the country — and it is drawing increasing interest from White House officials.
When asked what change they would most like to see in the process, 72 percent of respondents to Crux chose more predictable outcomes over faster timelines or simpler processes.
“The finding here is that developers can absorb difficulty, but they cannot build under uncertainty,” Nazar said.
President Donald Trump has targeted wind and solar projects as unreliable and his administration has issued measures to put additional scrutiny on permitting decisions for those sources. Some Senate Democrats have threatened to walk away from the permitting talks should Trump enact new punitive actions.
The debate has also underscored a need for certainty that has been sought by both renewable and fossil fuel developers.
“Permitting reform will bring certainty to energy projects of all types, and help avoid the swinging of the political pendulum that occurs every two to four years in this country,” Jay Timmons, the president and CEO of the National Association of Manufacturers, said last month on the sidelines of the CERAWeek conference in Houston, where permitting was a frequent topic of discussion.
“Whether they’re in one industry or another industry in energy, or one sector of the energy industry, I think they all agree that that type of certainty helps them with investment decisions,” Timmons added.
Recently some utility-scale solar projects have begun advancing through the Interior Department after months of stagnation, but that is not being felt uniformly across wind and solar projects.
“Almost every clean energy project in America must now be designed to purposely minimize interacting with the federal government,” Yuri Horwitz, CEO of Sol Systems, a clean energy independent power producer, recently told POLITICO.
“That’s not an efficient way to build an industry, that doesn’t make sense for American businesses, and it’s not good for the American economy.”
