A recent order from the U.S. Department of the Interior (DOI) is slated to reshape the future of renewable energy development on federal lands. At its core, the order introduces new permitting hurdles that may delay project timelines.
On August 1, U.S. Secretary of the Interior, Doug Burgum signed a Secretary’s Order that fundamentally changes how renewable energy projects are evaluated on federal lands. The order mandates that the Department prioritize energy projects that optimize generation while minimizing environmental impact. Specifically, it introduces “capacity density” as a key metric, which favors energy sources like nuclear and gas that typically produce more megawatts per acre over wind and solar.
The order also directs the Department to:
- Consider reasonable alternatives to proposed projects.
- Make land use decisions that are judicious and aligned with existing laws, including National Environmental Policy Act (NEPA) and Federal Land Policy and Management Act of 1976 (FLPMA).
- Revise regulations, guidance and permit practices to reflect this new prioritization.
The order aligns with broader energy policy shifts under the Trump administration, which emphasize U.S. “energy dominance” and reduce support for renewables. This follows a series of executive actions aimed at rolling back subsidies and fast-tracking fossil fuel and nuclear development.
This order introduces significant new risks and delays for developers planning projects on or near federal lands:
- Permitting Timelines: Projects must now undergo a multi-tiered review process, including final approval by the Secretary of the Interior. This centralization adds months, if not years, to permitting schedules.
- NEPA Reviews: The order intensifies scrutiny under NEPA, requiring more comprehensive environmental assessments and increasing the likelihood of litigation or denial.
- Tax Credit Eligibility: With stricter deadlines for beginning construction and placing projects in service, delays caused by this order could jeopardize eligibility for federal tax credits under Sections 45Y and 48E of the Internal Revenue Code.
In short, developers must now factor in longer timelines, higher legal risk, and reduced certainty when planning renewable projects involving federal lands.
Current Status of Renewables on Federal Lands
To understand how this may impact developers, let’s look at the numbers of operating and planned projects on federal lands in the United States:
- Operating Capacity: There are currently 11,000 MW of solar and wind capacity operating on federal lands, which is just 3% of the total 352,000 MW installed across the U.S.
- Planned Projects: There are 12,000 MW of planned capacity (11,000 MW solar and 672 MW wind) on federal lands, with 3,058 MW in the interconnection agreement phase. In contrast, the U.S. has 1.4 million MW of planned solar and wind projects, with 231,000 MW in the same phase. That’s just 0.85% of planned capacity located on federal land.
- Location: The bulk of these projects sit in the western U.S., spread mainly across Nevada, California, Arizona and Utah.
Substations and Interconnection Points
Infrastructure on federal lands also plays a role:
- Substations: There are 771 substations on federal lands, tied to 104,000 MW of planned capacity. Nationwide, there are 43,000 substations, meaning only 1.7% of substations are on federal land.
- Do note, even if a project isn’t directly sited on federal land, being associated with infrastructure, like access roads or transmission corridors, can trigger federal permitting requirements under NEPA, adding complexity and risk.
Impact for Renewable Developers
Historically, federal lands have not been a major driver of renewable development. The permitting process is more complex and time-consuming than on private lands, leading many developers to avoid federal parcels altogether. This new DOI order will likely reinforce that trend, further discouraging investment in federal land-based projects.
While in comparison to total U.S. capacity, projects on federal lands are minimal, the implications of this change are still real for developers with federal land projects in the pipeline. The bulk of this impact will be on projects in the western United States that are leveraging federal lands or infrastructure on federal lands for their development.
Even given the plethora of recent setbacks for renewable development across the U.S., this change on federal lands will not stop renewable development. Given the history of avoiding development on federal properties, developers will need to smartly navigate securing private land opportunities for their development. Enverus PRISM® has the solutions you need to better navigate this change in policy to ensure you can find the most viable project sites, even in times of disruption to the industry.
