The Politics of Land Use for Distributed Renewable Energy Generation

Existing Perspectives on Land-Use Transactions

Land-use transactions have been examined in various ways. They have been framed mainly in terms of competition between land-use forces to capture the gains from policy. The classic Tiebout model is one example. Tiebout (1956) viewed the transactions between local governments in terms of competition for growth and development. Local governments provide bundle of goods and services to satisfy consumer-voters’ preferences. Citizens register their preferences by “voting with their feet,” that is, choosing and residing in communities that best satisfy their preferences for public goods (Tiebout 1956). Local governments thus pursue the optimum and stable size for their communities. They compete with other local governments by attracting residents that will enhance local development to achieve this optimum size. “Proper zoning laws, implicit agreements among realtors” are mechanisms by which this is achieved (Tiebout 1956, p. 420). Extending the Teibout model, Peterson (1981) proposed a functional division of policy arenas between national and local governments—that is, development policies for local governments, redistributive policies for national government, and allocational policies for both. He argues that cities have unitary interest, that is, to maximize their tax base. Local governments are concerned about providing for the needs of their residents and competing for growth to attract residents with high tax potential. They are more concerned about economic productivity and operational efficiency than redistributive goals (Peterson 1981).

Interest group models also see policy as the outcome of power play between competing groups, but predict that those groups with political resources dominate the competition. In examining efforts at reforms in municipal government, urban education, and civil rights, Miller (1985) found policy reforms to be reflections of the preferences of high-demand groups or those with the capacity to induce change based on their preferences. These policies are decided not by the median voter but by the institutional preferences of particular groups such as those in high socioeconomic status (Feiock 2006; Miller 1985). The interest group model of local politics predicts that policies would likely favor groups that are able to deliver political resources to local officials (Lubell, Feiock, and Ramirez de la Cruz 2009). This means that the bargaining dynamics is defined by the political powers of the demanders and the inclination of local authorities to supply policies to favor particular interests (Feiock 2006).

Growth machine politics predicts that development interests would mobilize and articulate their demands to capture the concentrated benefits from land-use policies (Lubell, Feiock, and Handy 2009; Molotch 1976). Land is a “market commodity providing wealth and power,” and those “who have most to gain or lose in land use decisions” take particular interest in it (Molotch 1976, pp. 309, 314). Because they are well-organized, well-financed, and closely allied to politicians, development interests are likely to edge out the competition (Lee and Feiock 2011; Molotch 1976). Local governments become the arena where land-based interests “compete for public money and attempt to mold those decisions which will determine the land-use outcomes” (Molotch 1976, p. 312). Growth machine politics benefits only a few and has negative consequences such as pollution, traffic congestion, and natural resource degradation (Molotch 1976). The political nature of growth controls, such as zoning, can also be exclusionary to the effect that low-income residents are prevented from living in certain neighborhoods (Charles 1999).

Environmental politics has ushered in the sustainability movement, which brings into focus the interdependence of human and natural systems and the integration of environmental health, quality of life, sustainable communities, and national and local governance into the development equation. Smart growth then became an important concept to pursue local growth and sustainability. Generally, it involves land-use policies that tie economic growth to the quality of community life (Portney 2003). For planners, it means “promoting denser development and protecting agricultural and wild land from developments” (O’Connell 2009). Sprawling development or “urban sprawl” is anathema to smart growth. Various policy instruments have been implemented to manage growth and contain urban sprawl, including land preservation, inner city redevelopment, urban service boundaries, incentive zoning, smart growth zoning, density bonuses, development impact fees, and transfer of development rights (Feiock, Tavares, and Lubell 2008; O’Connell 2009; Ramirez de la Cruz 2009). Thus, along with the agenda of sustainability and smart growth came the formation of constituencies for the environment. With environmental issues gaining currency, citizens and interest groups advocating for the environment have grown over the years. They are proving to be a counterforce to builders, realtors, and other development interests in shaping policy outcomes. They have strong preference for measures advancing sustainability. The activism of these groups can be a factor to induce local governments to enact sustainable land-use policies. The supply of environmental goods in the political market is contingent on how proenvironment groups can counter development interests and provide electoral victory to local politicians.

The political market framework has also been used to examine the transactions among land-use interests represented by demanders and suppliers (Feiock 2006; Lee and Feiock 2011; Lubell, Feiock, and Ramirez de la Cruz 2009). The demanders (e.g., businessmen, realtors, environmental groups, and other private interests) exert political pressure to advance policies that favor them, and the suppliers (e.g., politicians and other government authorities) provide public goods and services in response to these demands. Beneficial exchanges are impeded by transaction costs—such as those associated with the difficulty in reaching agreements, contradictory goals among constituencies, and uncertainty in securing commitments from legislators and implementers—which can affect policy adoption and enforcement (Feiock 2006; Feiock, Tavares, and Lubell 2008; Horn 1995). Transactions can lead to a policy choice or decision. Institutions play an important part as they mediate the transactions of political and economic forces and, thus, influence the policy process and outcome (Feiock 2006; Kwon and Feiock 2010; Kwon, Lee, and Feiock 2010; North 1990). They either constrain or incentivize behaviors of both demanders and suppliers.

Land-Use Plan and Policy as Political Contract

This study situates land-use transactions in the political market. However, it frames these transactions not mainly as competition between traditional land-use forces but more in terms of political contracting between individuals and groups, who are finding ways to adopt a policy. There are attendant hazards in forging a contract in the political market. These hazards are transaction costs, which can serve as barriers to political contracting. There are ways to mitigate them and this study identifies transaction resources as policy levers to advance a land-use plan or policy.

A land-use plan is a “collective contract between various land use interests and the local government” (Dawkins 2000, p. 511). It is intended to secure cooperation among various parties by stipulating required future actions and the rewards and penalties for compliance and noncompliance (Maser 1998). Collective action is facilitated through the joint rationality of participants who see benefits accruing to all concerned following compliance. Future land uses are delineated and safeguards are devised to mitigate uncertainties. These uncertainties represent transaction costs that arise from participants’ behavior, implementation, context, and other unforeseen events. Thus, a land-use plan emerges when “landowners face transaction cost impediments to establishing credible voluntary land use commitments” (Dawkins 2000, p. 511). It reduces uncertainties by binding participants to specified development patterns and acceptable behavior. Like a contract, it defines long-term relations by stipulating ways to deal with potential problems and contingencies. It serves as constraint for socially disadvantageous land-use practices.

A land-use plan provides the blueprint for development. It is much like a constitution, which, as Dixit (1999) noted, does not specify all the rules and procedures that have to be followed for every contingency and is interpreted and applied as context shifts. Land-use plan changes as local governments redefine the character of development they envision for their communities. It is realized through land-use policies by way of regulations and incentives. Traditionally, these policies are intended to delineate and maintain suitable land uses, control sprawl, and preserve critical landscapes. Smart growth policies have been applied in the recent past to guide urban development by managing change in how people use land and pursue growth. So apart from zoning regulations, the policy toolkits have expanded to include other measures like density bonuses and the transfer of development rights.

Land-use planning and policy making are not mere technical exercises that occur in a vacuum. They are subject to political contracting between those who have a stake in the plan or policy such as government, local community, and organized interests. There are costs in carrying out transactions in the political market and in negotiating and implementing contracts. They can pose as barriers to policy adoption and can determine policy outcome. Adopting this perspective calls for identifying the stakeholders or the demanders and suppliers, teasing out the transactions between them, identifying the transaction costs involved, determining who bears the costs, finding ways to mitigate these costs so beneficial transactions can be realized, and understanding how institutions and context affect political contracting. Local government structures, legislative representations, administrative arrangements, socioeconomic conditions, for example, have been found to affect land-use policies and outcome (Feiock 2004; Feiock, Tavares, and Lubell 2008; Lubell, Feiock, and Ramirez de la Cruz 2009; Ramirez de la Cruz 2009). Once enacted, land-use plan and policies create constituencies, rules, and relationships, which may be costly to reverse. Existing land-use framework can inhibit change or may not be amenable to sustainability goals and objectives. As Dixit (1999, p. 25) noted, policies have long-lasting effects as “they create facts, institutions, and expectations that have their own momentum and acquire at least some of the same durability as a change in the constitution itself.”

Land Use and Sustainability

Land use is inextricably linked to sustainability. Land-use patterns and land-cover change affect the environment and have an impact on local communities across jurisdictions. Greenhouse gas (GHG) emissions can be traced to buildings, suburban sprawl, and dwindling forest reserves. It is estimated that about 85% of GHG emissions in the United States are carbon dioxide where “much of which is caused by the buildings and land use patterns that local land use plans and regulations create, regulate, and approve” (Nolon 2013, p. 274). More and more of the pollution affecting communities is traceable not only to point sources that are easily identifiable, such as factory smokestacks, but also to nonpoint sources that come from multiple locations and are, therefore, difficult to monitor and control. This has highlighted the relevance of land-use plan and policies to mitigate nonpoint pollution sources, thereby, localizing environment and climate change issues that have, for the most part, occupied federal and state regulations. Thus, land-use mechanisms—such as zoning ordinances, site planning, building codes, transportation planning, infrastructure investments, resource management, environmental review—have increasingly become an important part of the sustainability agenda. They have brought local governments at the forefront of the discourse with their authority over land use and their knowledge of local conditions.

A component of sustainability is renewable energy. Land use has a critical role to play in facilitating or impeding renewable energy generation. The siting of renewable energy plants is location specific and land intensive. The operation of wind and solar farms, hydroelectric and, to a large extent, biomass plants is dependent on the availability of natural resources in the area where these can be harvested to produce electricity. In contrast, a coal-powered plant can operate by importing coal from distant places or even from foreign lands; that is, renewable energy is tied to the land’s unique characteristics. Furthermore, renewable energy plants are often sited away from urban areas where the requisite infrastructure to produce and deliver electricity, such as transmission lines and water resources, is not readily available (Powers 2013; Outka 2011). They are also land intensive where the installation of these plants can encroach on existing land cover and land uses, which could have unintended effects. The food–fuel debate, for instance, highlights the conflict between sustainable energy and food security objectives as seen in the conversion of arable lands to biofuel production. Another issue is “energy sprawl” where land-use requirements of existing technologies for future energy demands are estimated to have negative ecological consequences (McDonald et al. 2009). The impact of renewable energy facilities on species protected under the Endangered Species Act presents another siting challenge (Powers 2013). These land-related constraints can limit siting options and generate resistance to renewable energy. Thus, plans and policies relating to land use and energy, or the absence thereof, can further or frustrate the sustainability agenda.

Land, as input to development and sustainability, can be a contentious issue in light of the competing and conflicting claims of its use. Installing renewable energy systems, whether large or small, can impose costs on others or result in negative externalities. A local community, for instance, would likely oppose renewable energy projects that could downgrade property values. Issues concerning turbine noise, shadow flicker, ice throw, and safety threats from collapsing turbines have been raised against wind devices installed in neighborhoods. The siting of wind farms has also been a popular subject of local opposition because of issues ranging from noise pollution, spoiled scenery to the danger these farms pose to birds and bats. Glare from photovoltaic (PV) solar panels has been raised as well, especially by residents in dense neighborhoods. The right to install these solar panels and enjoy unimpeded solar access has been fought over by neighbors, even brought to the courts, litigated, and subjected to public policy (see, for example, Rogers 2008a, 2008b). Energy generation is a land-use issue as siting, land requirements, compatibility with existing and adjacent land uses, public welfare and safety, and aesthetics commonly arise because of the competing claims on land and the externalities associated with exercising property rights.

Large-Scale Renewable Energy Systems

Land-use issues concerning energy generation are varied and can be specific to the type of energy systems adopted or planned for installation, that is, whether large scale or distributed and small scale. Energy systems are usually classified as either large or small scale by the amount of energy produced (Fuller 2008). Large-scale systems generate electricity either at a utility scale (e.g., producing about 5–50 megawatts) or a commercial scale (e.g., producing about 1–4 megawatts). Small-scale facilities can have a capacity of up to 2,000 kW or 2 megawatts and can be off-grid or grid-tied systems (Pitt 2008).

Many large-scale energy systems are powered by fossil fuel and they have siting advantage over renewable power plants (Kahn 2000). They are located near urban areas and industrial zones, whereas renewable energy systems—for example, wind and solar farms, biomass, hydroelectric, geothermal power plants—are often sited in remote, rural areas or in open spaces where resources abound but are far from electrical transmission lines and basic infrastructure such as roads, water supply, drainage, and sewer connection (Kahn 2000; Powers 2013). The capacity of existing electricity grid to accommodate intermittent renewable energy supply remains an issue. Existing transmission capacity is limited and has been underfunded by vertically integrated utilities, whereas the costs of acquiring transmission right-of-ways are steep. Often sited far away from urban centers, renewable energy systems also have to deal with stringent environmental laws protecting plant species, endangered animals and their habitat. Furthermore, these facilities seem to be at a disadvantage when selecting the venue for permitting. Because fossil fuel power plants enjoy a certain amount of flexibility when it comes to siting, project sponsors could choose the lead agency to approve their permits and, oftentimes, state regulatory agencies are the likely option because of one-stop shops, centralized state reviews, and experienced civil servants (Kahn 2000). This is not always the case with large-scale renewable energy systems, which have geographic constraints and statutory exemptions to deal with. Their project sponsors often have to do business with federal and local governments and they would relatively have a harder time getting approval because of hurdles from national laws, for example, National Environment Policy Act, and the uncertainty of local politics and regulations (Kahn 2000).

Despite the general support for the environment, local opposition to large-scale renewable energy systems is common. Public safety, aesthetics, spoilt scenery, and avian and bat mortality are issues often raised. Opposition arises because of people’s unfamiliarity with the technology and the lack of consultation to get local support. The need to communicate the direct benefits of these projects to affected communities—for example, new sources of income and employment to communities undergoing depopulation and economic decline—and to get them involved in the project development process can be crucial in winning stakeholders’ buy-in (Walker et al. 2007).

Distributed Renewable Energy Generation

Distributed renewable energy generation is small-scale, decentralized applications of clean renewable technologies, such as solar PVs and small wind turbines, which are commonly sited at the customers’ home or place of work (Ackermann, Andersson, and Soder 2001; Carley 2009; Pepermans et al. 2003; Pitt 2008). The scalability of renewable system technologies makes the adoption of a policy that promotes their use at the local level feasible. Local governments have used residential zoning codes to permit generation of, say, 4 to 100 kW, to power homes and small buildings.

Distributed renewable energy systems enjoy some advantages over large-scale facilities. For instance, they could easily be deployed given the right policy environment and a conducive permitting process at the local level. They are also not land intensive and could, therefore, curb energy sprawl. They require only a small spot of land and the permission to install in existing property. Unlike wind and solar farms, they are not high profile, thereby attracting less political attention from special interest groups and organized landowners and developers (Pursley and Wiseman 2011). They could be an important addition to the portfolio of initiatives directed toward increasing efficiency in electricity generation, transmission, and distribution; that is, they could entice communities to find alternative use to existing but otherwise untapped resources, such as rooftops and vacant lot, to generate electricity (Wang, Green, and Davis 2011). They could be a means to avoid systemic losses from long-distance transmission, mitigate market power held by utilities and consolidated power sellers, lower electricity cost to consumers, and promote consumer control over distribution (Calfee and Weissman 2012).

With the authority to regulate land use, local governments hold the key to distributed energy systems. The responsibility to oversee the siting, installation, and deployment of small-scale energy systems and to formulate the necessary rules falls under the purview of local governments. Federal and state governments are mainly responsible for large-scale facilities and have enacted various regulations and incentives accordingly. With distributed renewable energy, local governments are in the driver’s seat. They are being thrust into the sustainability discourse as renewable energy technologies are finding their way to individual households and communities, as nonpoint pollution sources are increasingly posing a threat, and as proximity to and knowledge of local conditions are becoming more salient to inform policy. But the deployment of distributed renewable energy technologies has yet to be institutionalized in land-use policies. Many local governments have yet to issue the rules to define and clarify their use. Pursley and Wiseman (2011, p. 915) found that most local governments of large cities have municipal codes that

barely acknowledge the existence of distributed renewable. Their buildings codes do not contain minimum standards for the construction or installation of these technologies. They do not describe how solar panels are to be mounted on roofs, for example, or minimum cable strengths required to hold up wind turbines. Their zoning codes also generally fail to include wind turbines or solar panels within permitted accessory uses or to place minimum setback or maximum height requirements on wind turbines.

The absence of rules on land use and distributed renewable energy could not have been simply an oversight. Distributed renewable energy systems have been viewed as locally undesirable land uses (LULUs) and have been historically opposed by landowners and homeowners alike (Rule 2010). Resistance arises from “fears that the devices could diminish neighborhood aesthetics, disturb nearby landowners, or threaten property values” (Rule 2010, p. 1236); that is, there is a perception that these devices could impose local costs that could far outweigh their local benefits. Policies promoting distributed renewable energy would likely attract opposition from local communities, which may not necessarily be the case with other sustainability policies, such as smart growth that restricts growth or real property development, or energy efficiency involving improvements inside a house or building such as installing energy-efficient appliances, weather proofing a house, or greening a building. It has been argued that local opposition to policies promoting distributed renewable energy might even be stronger than large-scale systems. That is,

[a]n ordinance that invites distributed renewables into a municipality can arguably create greater uncertainty for local voters than an ordinance authorizing the siting of a single waste disposal site or power plant. Unlike large-scale, concentrated LULUs, distributed renewables are typically installed at unpredictable locations throughout host communities over time. Individual voters considering whether their town should host a large LULU often already know where it would be sited and thus may have greater certainty about how it could impact them. In contrast, distributed renewables-friendly ordinances create the risk that any resident could ultimately see a small wind turbine or unsightly solar panel array installed next door. (Rule 2010, p. 1236)

Existing regulations are also serving as barriers to the deployment of distributed renewable energy systems. Height restrictions in zoning ordinances—say, not allowing structures to be taller than 35 ft, which is a height too low for wind power according to experts—have prevented small wind turbines from being installed. These restrictions have been imposed for decades “to promote fire safety, and to preserve light, air, and a rural ambiance” (Rule 2010, pp. 1238–39). There are also zoning regulations and private property restrictions that prohibit renewable energy devices or have stringent application requirements and review procedures. Some building codes and homeowners’ association covenants, for example, prohibit solar panels to be mounted on rooftops or do not provide guidelines on the right of access to sunlight or trees causing shading constraints. Like solar PV systems, the installation of wind turbines would require electricity and building permits, and often would also need planning and zoning permits because they have more potential impact on the environment and surrounding land uses (Pitt 2008).

Where there are no rules to guide property rights in local communities or where existing regulations are posing as barriers, deployment of distributed renewable energy systems would be impeded. They create uncertainties, which could serve as disincentives for individuals and households to go through the process of application and permitting. Setting the appropriate land-use rules concerning distributed renewable energy systems could obviate these uncertainties. Local governments could, therefore, use their land-use authority through zoning to permit distributed renewable systems. Zoning is a land-use tool “to determine what kinds of development activities can take place” and “to delineate areas for special environmental protection” (Portney 2003, p. 112). It stipulates the land uses allowed within a designated boundary ensuring that all real properties in the area conform to the same set of rules (Fuller 2008).

With residential zoning codes that permit or allow on-site electricity generation through renewable resources, permitting procedures, standards for the use of the technologies (e.g., setback and height provisions, noise and aesthetic controls, safety standards, color, design), and other requirements are clarified and managed. The presence of such code can result in more simplified and streamlined procedures, where applications can be approved over-the-counter without rigorous review process. A zone has a “permitted” use designation when renewable energy application is allowed outright for as long as it complies with regulations, design standards, and other requirements (Pitt 2008). A “conditional” use zone, however, would require detailed application for a “conditional use permit” from local zoning authority and would entail a rigorous review process including, in most cases, the conduct of public hearings (Pitt 2008). The process can be time consuming, litigious, and costly. The requirements attached to these conditional or special use permits can be so stringent so as to dissuade residents from pursuing the project. Permitted use, however, implies the establishment of renewable energy overlay zones that “give[s] pre-approval for siting of renewable energy generation in designated geographical locations . . . [and] offers the opportunity for a thorough assessment of available resources, and the impacts on natural and human inhabitants of the area” (Pitt 2008, p. xiii). It implies that local governments would have conducted a study to assess available renewable energy resources in the area—for example, the wind patterns or solar power resources in a community over time—and the impact of the technologies on landscapes, views, endangered species, and the environment in general. It could also reduce expenditures inasmuch as a case-to-case determination of applications for exemptions and conditional use permits and the conduct of hearings and reviews can have cost implications for both government and residents (Greaney 2011).

Notwithstanding the land-use authority of local governments and the salience they attached to sustainability issues, question remains why local governments advance environment-friendly policies; that is, why do some local governments enact residential zoning codes that permit distributed renewable energy generation whereas others do not? Viewed from a transaction-cost perspective, these local governments are likely to adopt such policies because resources are available to minimize transaction costs and facilitate policy adoption.

Search Costs and Information Resources

In adopting a policy on distributed renewable generation, residents wanting to install new technologies, such as PV solar panels and wind turbines, have to deal with search and information costs. They would have to spend time and resources to discover if products and services are available, accessible, and affordable. Search and information costs would be steep for those not familiar with the technologies and this is particularly so when firms and contractors providing the products and services are absent or few. The slow diffusion of distributed renewable energy technologies has been traced to the lack of easily accessible and credible information and to high upfront costs, especially for PVs and wind turbines, which are capital intensive (Noll, Dawes, and Rai 2014). Poor information about cost and energy use could, in fact, hamper the efficient operation of the market for renewable energy technologies (Gillingham and Sweeney 2012). The amount of time and capital needed to acquire these new technologies could be substantial so as to disincentivize consumers to pursue transactions in the market.

The presence of a market with numerous green firms could be a resource to mitigate this type of transaction costs. It will not only bring down the upfront costs of installing the technologies but also the information and search costs that can pose as barrier for residents and homeowners to make informed decisions. The Lawrence Berkeley National Laboratory, for instance, has found that larger and more mature PV markets can be one of the underlying drivers that can “facilitate lower prices through greater competition and efficiency, more extensive bulk purchasing, and better access to low-cost products” (Barbose et al. 2013, p. 26). Other drivers include the characteristics of systems installed, sales tax rates, and administrative and regulatory compliance costs related to permitting and inspection processes, interconnection, and incentive applications (Barbose et al. 2013). The growth of green businesses and jobs has been attributed to many factors, which have been categorized according to the following: economic development, public finance, political environment, labor market, knowledge stock, Renewable Portfolio Standard, and other related policies (Bowen, Park, and Elvery 2013; Yi 2014). Thus, a large market for distributed renewable technologies can facilitate information search, can mean a conducive policy environment, and can build the confidence among consumers to try to adopt an innovation despite high upfront costs.

Minimizing search and information costs are critical for residents who bear, in large part, the cost of the transactions. They shoulder the initial cost of searching the right information for decision making. They are the main constituencies for the policy on distributed renewable energy generation. Local governments will likely adopt this policy if the support infrastructure supplied by green firms and contractors exists to serve local demands.

Involvement in sustainability or climate change networks can provide cobenefits for local governments. These networks are, in a way, similar to professional networks where knowledge is diffused among members and informal networks of weak ties with other organizations are created (Granovetter 1973; Newell and Swan 1995). Through these networks, local governments can keep abreast of environmental issues, best practices, and available tools. This means that the costs for searching and acquiring information about clean energy technologies, permitting procedures and fees, industry standards, human resource requirements, and skills training could be reduced through contacts among network members. Thus, these networks can serve as a valuable resource for information gathering and problem solving for local governments pushing the sustainability agenda in their jurisdictions. Memberships in these networks, however, are no guarantee that climate change policies would be enacted. Local governments need to overcome a number of obstacles to go beyond rhetorical commitment such as having a political champion within the local authority, access to financial resources, jurisdiction over emission-producing activities, technical expertise, and political will, among other things (Betsill and Rabe 2009).

Two climate change networks are considered in the study, namely, the U.S. Conference of Mayors and the ICLEI–Local Governments for Sustainability (founded as International Council for Local Environmental Initiatives). The U.S. Conference of Mayors tackles broad policy interests, such as national urban/suburban policy, federal-city relationships, urban planning and management, as well as environmental issues. In 2005, its members signed a Climate Protection Agreement to advance the goals of the Kyoto Protocol—that is, reduce GHG emissions by 7% below 1990 levels—and to advocate for climate protection in state and federal governments (Krause 2010; Sharp, Daley, and Lynch 2011). ICLEI, however, focuses on local sustainability providing local governments, that is, both cities and counties, with technical assistance and tools to inventory and reduce GHG emissions. These tools provide a means to measure performance of local governments in climate protection efforts and, thereby, differentiate those engaged in rhetoric or symbolic policy from those implementing concrete actions (Sharp, Daley, and Lynch 2011). Although membership in these networks does not necessarily translate into effective sustainability policies and programs, these networks can provide cobenefits for local governments in terms of shared information and evidence of innovations actually occurring in other parts of the network, which could reduce policy or program uncertainty and, thus, pave the way for replication and adaptation.

Permitting Costs and Administrative Resources

Permitting costs can deter efforts to install on-site clean energy technologies. There are costs involved in complying with documentation requirements, application procedures, inspection processes, and, of course, in paying the necessary fees, which contribute to an already steep installed prices of distributed renewable energy technologies. The complex and, oftentimes, unclear procedures and requirements in many jurisdictions also do not help in reducing these permitting costs. For example,

[i]nstalling a PV system generally requires, at minimum, an electrical permit from the local building department and an interconnection permit or agreement with the local utility. A building permit may also be required, particularly if the project will alter the building structure or if the solar installation will not be flush with the roof. In some cases a zoning, design review, or other type of planning permit may be required to approve the PV installation as a “use” on the property. (Pitt 2008, pp. 16–17)

A case in point is that of former Vice President Al Gore, who was not allowed to install solar PVs on the roof of his home in 2007 because of “local zoning rules that required all power generating equipment to be placed at the ground level” (Pitt 2008, p. 7). In hurricane-prone areas, such as Florida, there are wind-loading requirements for PV installation with which contractors need to comply whereas in some jurisdictions there is a design review process for the public or the neighbors to raise aesthetic concerns about proposed projects and applications (Pitt 2008). All these add up to permitting costs. One estimate places administrative expenses associated with siting and permitting requirements and fees from 13% to 30% of total solar project costs whereas another estimate places these nonhardware or “soft” costs between 50% and 60% (Greaney 2011; Tong 2013; Wiser and Dong 2013). The wide range in estimates may be due to the variations in regulatory requirements of multiple authorities from one jurisdiction to the next. The estimates, however, show that permitting costs constitute a substantial portion of total cost. It has also been found that “city-level permitting processes have a substantial and statistically significant effect on average installation prices and project development times” (Wiser and Dong 2013, p. iv).

In the case of small wind turbines, the lack of applicable guidelines is an issue. Many jurisdictions are evaluating small turbines using the permitting processes for large wind turbines or similar energy infrastructure (Pitt 2008). Others are deciding applications on a case-to-case basis where the determination is left to a local authority like the zoning or planning board. Barriers arise because of excessive zoning requirements (e.g., height restrictions, setback requirements, state certification), conduct of public hearings and judicial reviews (e.g., by local planning body), ill-defined approval processes, and lack of support from regulatory boards (Pitt 2008). A town in Vermont, for example, treated a 10-kW, on-grid wind turbine like an electric power plant that has to get approval not only from the local zoning board but also from the State Public Service Board (Green and Sagrillo 2005). In studying the zoning regulations of municipalities in New York State, Fuller (2008) found that some jurisdictions do not have zoning regulations for wind turbines at any scale. Therefore, there is no institutionalized procedure to process and evaluate applications. Residents would have to apply for a variance where a code enforcement officer or the local zoning board determines whether to allow the variance and issue building permit. In other jurisdictions, existing restrictions are applied such as height restrictions of, say, 35 ft, and setbacks from roads and property lines that are twice the height of the tower to be built. Another barrier is the stringent reviews usually conducted to ensure that small wind power projects meet various criteria, such as public safety; siting and installation; nuisance impacts, for example, sound and electromagnetic interference; environmental impacts, such as bird and bat mortality, soil erosion; and visual impacts (Pitt 2008). Often, different local authorities, including surrounding jurisdictions, are involved in these reviews. At times, state-certified engineers are called upon to conduct independent inspections to augment the lack of experience of local inspectors and permitting authorities on renewable energy systems, which further contribute to project delays (Pitt 2008). All these add up to permitting costs and confound the already complicated requirements that residents and contractors have to hurdle.

Permitting costs could be resolved internally within local governments. To minimize permitting costs, local governments would have to harness their administrative resources such as exercising political will, improving system processes, and developing capacity. Committing and making these resources available could minimize permitting costs and facilitate the adoption of a land-use policy on distributed renewable energy. They signal the willingness and capacity of government to deal with barriers to policy adoption.

Local governments have adopted various measures on sustainability. Different sets of indicators have been proposed to gauge local sustainability efforts (e.g., Portney 2003; Lubell, Feoick, and Handy 2009; Zeemering 2009). These indicators encompass the triple bottom line of sustainability—that is, environment, economy, and equity. Portney (2003), for instance, has come up with an index to measure whether cities are taking sustainability seriously. The index includes 34 indicators categorized according to the following elements: sustainable indicators project; smart growth activities; land-use planning programs, policies, and zoning; transportation planning programs and policies; pollution prevention and reduction efforts; energy and conservation/initiatives; and organization/administration/management/coordination/governance (Portney 2003). Local governments have enacted a number of policies and programs promoting sustainable land use and development such as the following: land conservation program, residential zoning codes permitting higher densities, zoning codes encouraging mixed development, incentives for new commercial development that are Leadership in Energy and Environmental Design certified, and reduction of fees for environmentally friendly development (International City/County Management Association [ICMA] 2010).

The presence of these indicators shows the level of commitment in pursuing sustainable goals. Having them in place could mean that the local governments have introduced and clarified issues, set standards and procedures, and sought public consultations. These indicators can serve as benchmarks for monitoring, an internal management tool to measure performance, or a means to mobilize and engage the public (Portney 2003). Their mere presence, however, does not automatically lead to sustainability outcomes as, like policy, they are not self-enforcing. Thus, supporting mechanisms are necessary such as a plan of action, resources, implementation capacity, and information and technology.

This study uses sustainability measures adopted by local governments for their internal operations as proxy for these administrative resources, namely, sustainability budget and dedicated staff. Budget resources allocated to the sustainability agenda signals the seriousness of local governments to the effort. They increase the capacity of local government to promote the agenda and implement projects. They can be used for improving system processes, developing human resources—such as the personnel tasked to grant permits for solar PV and small wind turbines—and educating local government workforce about sustainability in general and distributed renewable energy in particular. They provide concrete evidence of local governments’ support for clean energy technologies, which can be institutionalized through a land-use policy.

One of the indicators listed by Portney (2003) under the organization/management/coordination/governance element is the designation of a single government or nonprofit agency responsible for implementing sustainability. Krause, Feiock, and Hawkins (2016) also argued that the assignment of bureaucratic responsibility has implications for how sustainability program is prioritized, how much resources are made available, and which type of interests is given access. They found that the choices of local governments on where to assign the program and how to structure the responsible organization are shaped by the scope of the policy efforts, government capacity, community and interest group support, and political institutions. In local governments, sustainability encompasses various elements that concern different departments and offices such as planning, transportation, administrative services, community welfare, park management, office of the mayor, city manager, county executives, and administrators. One option is to assign sustainability effort to one of these departments, but this might compete with ongoing priorities as each one has its respective mandates and functions. An alternative is to spread out the effort to two or more offices, which, however, might result in fragmentation and coordination problems. In a study of Florida cities, Outka and Feiock (2012) found that most cities have assigned the development of energy and climate change policy to an existing department, that is, the planning department. They found that these cities are less likely to have climate change plans. Designating a unified office and dedicated staff signals the seriousness of the local governments in dealing with the issue and its intention to give the effort high priority. Coordination and implementation problems are attenuated with a unified authority taking the helm of the sustainability effort.

Bargaining Costs and Political Resources

Bargaining costs are another set of transaction costs that are likely to pose barriers to policy adoption. These involve the costs in negotiating details of the contract, the changes needed once the contract has been approved, as well as the costs in monitoring performance and in implementing preagreed resolution mechanisms (Weimer and Vining 2005). Local governments would have to win the support and compliance of residents and homeowner associations to proceed with the adoption and implementation of residential zoning codes for renewable energy generation.

There may be general consensus on the benefits of clean air from renewable energy. However, renewable energy technologies devices are green LULUs and installing them within one’s neighborhood may attract opposition from other residents who may raise issues about safety, aesthetics, and property rights. The Not-in-My-Backyard syndrome has been observed not only between community and industries but also between neighbors. For example, the right to grow trees in one’s backyard may conflict with the right to harvest solar energy in another. A seemingly innocuous case happened in California when a resident filed a legal suit—after failed efforts at mediation—against his neighbor whose redwood trees were casting a shadow on his solar panels (Rogers 2008a). The court ruled in favor of the solar panels and resulted in the cutting of the redwood trees to comply with the Solar Shade Control Act, a law in California that is rarely used (Rogers 2008a, 2008b). In response to this solar panel versus redwood tree case, a law was then passed in 2008 that “guarantees if California property owners plant a tree before a neighbor installs solar panels on their roof, then the neighbor can’t require the tree to be cut or trimmed, even if it grows to cast shade on the panels” (Rogers 2008b). Persuading neighbors to allow renewable energy technologies installed, such as solar PVs, can be a messy affair with various concerns being raised from lowering property values, blinding glare from solar panels, worsening a water runoff problem, to the destruction of ecosystem of birds and animals (Johnson and ClimateWire 2012). The same is true for small wind turbines. Negative perceptions on the impact of wind turbines persist. Most residents are concerned about sound and visual impacts and potential bird fatalities, which are found to be negligible for small wind turbines based on studies done by the American Wind Energy Association (Pitt 2008).

Another bargaining hurdle is the existing private covenant restrictions imposed by homeowner associations. A restrictive covenant is a

promise made by one property owner to limit the use of his or her realty (land, buildings, or vegetation) so as to benefit other parties. Restrictive covenants are commonly used by planned communities to ensure that all units adhere to a common design theme, and to prevent activities deemed to be undesirable by the community at large. [They] enhance and protect the investment of homeowners and developers by taking the uncertainty out of the nature, extent and “look” of future development within a planned community. (Starrs, Nelson, and Zalcman, n.d., p. 12)

Restrictions are many, especially with regard to architecture, design, and development. Many of the objections against small-scale renewable energy devices are raised on grounds of aesthetics, especially if these devices are viewed as having a negative effect on local home values. There are 10 states with laws in place prohibiting covenant restrictions from banning solar PVs in communities, but compliance has been wanting (Pitt 2008). One of these states is Florida, where existing statutes prevent any governing body from issuing an ordinance, including deed restrictions and covenants that prohibit the installation of renewable energy devices. The statutes, however, may not be effective in practice in light of “redundancies, inconsistencies, and delays in the electrical or other permitting processes at the local level” and the lack of enforcement mechanisms (Outka 2011, p. 1080).

Unsupportive local regulatory bodies reviewing applications for small wind turbines also present serious bargaining hurdle. That is,

[e]ven if a proposal appears to meet all legal requirements, winning approval from the local planning commission, board of zoning appeals, or other applicable agencies may be difficult. This is due largely to a lack of understanding about the impacts of wind facilities and a general unwillingness to approve projects that are new or unfamiliar to the community. (Pitt 2008, p. 42)

Review process would be doubly difficult if placed in the hands of the elected body, which “often defer to the objections of neighboring landowners rather than judge the applications strictly on the established permitting requirements” (Pitt 2008, p. 43). For example, a resident in Bourne, Massachusetts, who planned to install a 132-ft windmill in her backyard, was disapproved twice by the planning board “citing safety concerns and predicting an adverse effect on the character of the neighborhood” (Goodnough 2009). After putting up a fight for two years and investing $40,000 for a 10-kW wind turbine and legal fees, the resident had to abandon the project when a Superior Court made a final ruling in July 2009 upholding the planning board’s decision (Goodnough 2009).

Local government structures can shape policy adoption. Different forms of local government have been shown to yield a certain pattern of policy outcomes pertaining to land use and climate change (e.g., Lubell, Feiock, and Ramirez de la Cruz 2009; Outka and Feiock 2012; Ramirez de la Cruz 2009). They mediate the transactions in the political market such as those involving residents who are in favor and against installing renewable energy technologies in their communities. The structure of the local executive and legislature—which has evolved in various forms since the Progressive reform movement of the early twentieth century—embodies the rule-making processes that shape policy choices and outcomes at the local level (Feiock 2006). It could either amplify or mute the ability of local actors to influence land-use decisions and patterns of urban growth (Feiock 2006; Lubell, Feiock, and Ramirez de la Cruz 2009). This condition creates incentives for local actors to behave in certain ways to influence the amount and nature of change in land use (Feiock 2006; Lubell, Feiock, and Ramirez de la Cruz 2009).

There are various forms of municipalities in the United States, but the two major types are the mayor-council and the council-manager form, or the political cities and administrative cities as Frederickson and Johnson (2001) call them, respectively, in their pure forms. The former draws a clear functional line between the executive and the legislature with a full-time, directly elected mayor, who is responsible for the implementation of policies promulgated by the legislative council and for the overall operations of the city government. In the latter, both the legislative and executive functions are vested in the council, which hires a professional manager to oversee day-to-day operations. The council-manager form is part of the efforts of the Progressive reform movement to increase professionalism in local governments and to insulate public decisions from partisan politics (Lee and Feiock 2011; Morgan 1997; Svara 1998). Over time, both government forms would adapt features from each other (Frederickson and Johnson 2001). Thus, a council-manager form may have an elected mayor who serves as presiding officer of the council and the ceremonial head of government. Or, a mayor-council form may assign a professional administrator to assist the mayor in running city hall. But, essentially, the two forms have been the dominant structure of U.S. municipalities such as in cities, townships, boroughs, and villages.

Local government managers are commonly associated with promoting efficiency and economic development as a means to advance their professional reputation and career (Lee and Feiock 2011; Lubell, Feiock, and Ramirez de la Cruz 2009; Ruhil et al. 1999). It has also been proposed that managers can be effective agents of the sustainability agenda. Professional socialization becomes salient, which sensitizes managers to the value of planning and long-term goals making them more sensitive to environmental concerns (Lee and Feiock 2011; Ramirez de la Cruz 2009). Their educational training and memberships in associations expose them to professional norms, best practices, and allow them to develop the skills to plan for durable projects with long-term benefits and to provide citizens with environmental amenities (Lee and Feiock 2011). Studies have also shown that city managers are more concerned about the expectations of their professional associations than the demands of electoral politics and that they are more willing to adopt innovative policies and practices (Carr 2015).

Research suggests that residents belonging to high socioeconomic status—especially those that are educated—are normally the ones more receptive to environmental issues and are able to articulate the demands for sustainability and better quality of life (Dunlap et al. 2000; Feiock, Tavares, and Lubell 2008; Lubell, Feiock, and Ramirez de la Cruz 2009). They are more likely to participate in civic groups and organizations and engage in environmental activism (O’Connell 2009). In a community with high proportion of educated population, local governments are more likely to pursue the sustainability agenda given the goal congruence between the government and the community and the ability of the latter to seek out information about innovations and support green initiatives. This particular segment of the population is believed to have the capacity to promote distributed renewable energy generation.