Selling a House with Solar Panels is Not for the Faint of Heart

There are more than a Million houses in the U.S. with solar panels installed on the roof and that number is increasing. It can be difficult if not dangerous to fail to properly address rooftop solar panels at the time of sale of a house.

Among the most often made inquiries to this law firm arise from the failure to properly transfer installed solar panels.

We assist real estate owners and those acquiring property in positively leveraging the constraints and finding advantages in matters involving solar panels, often including new approaches and possibilities in this emergent arena.

But contract forms for the sale and purchase of a house are often provided by a local board of realtors and today those forms do not adequately address the new and only now evolving issues arising from a sale with rooftop solar panels.

There is no one homogenized solar panel ‘deal’ and the business terms including ‘who owns the panels’ varies from one transaction type to another, and in most instances these installations are governed by varying state laws. But commonly, residential solar panel leases provide language similar to, ..

You agree that the solar panel system is the Company’s personal property under the Uniform Commercial Code.  You understand and agree that this is a lease and not a sale agreement. The Company owns the solar panel system for all purposes.

Obviously this creates issues when selling a house with solar panels on the roof that belong to someone else. It is common that residential solar panel leases provide language similar to,

If you sell your home you can transfer this lease and the monthly payments.

The person buying your home can sign a transfer agreement assuming all of your rights and obligations under this lease by qualifying in one of three ways: (1) the home buyer has a FICO score of 650 or greater; (2) the home buyer is paying cash for your home; or (3) if the home buyer does not qualify under (1) or (2), if the home buyer qualifies for a mortgage to purchase your home and the home buyer pays us a $250 credit exception fee.

Or, if you are moving to a new home in the same utility district, then where permitted by the local utility, the system can be moved to your new home. You will need to pay all costs associated with relocating the system, ..

Timing also needs to be considered when entering into a contract to sell a house,

You agree to give the Company at least 15 days but not more than 90 days prior written notice if you want someone to assume your lease obligations.

Many of the companies engaged in this business (.. but not all) file a UCC-1 financing statement in the real estate records that puts third parties on notice to their rights in the system. That fixture filing is in most states a lien or encumbrance against the system. But because in many residential transactions, title companies do not search the UCC-1 indexes (.. that are primarily used for business purposes), solar leases are regularly missed.

However, the express language of solar system leases cannot be missed,


That accepted, as suggested by the solar lease language above, there are options and fertile, enabling and desirable business terms that can add significant value to the real estate. The solar lease, as well as any power purchase agreement need to be considered in light of federal and state law (including tax laws) that stimulate new possibilities including create profit.

Shockingly, this is not only a residential problem. This firm regularly receives inquiries arising from commercial real estate transactions that have not adequately addressed matters of solar panels, PPAs, PACE financing, tax credits and the like.

Selling a house with solar panels is not for the faint of heart. There can be real legal jeopardy and significant dollar liability for those failing to address the issues associated with solar panels. If we can assist you in positively leveraging the constraints and finding advantages in matters of transactions involving solar panels do not hesitate to contact Stuart Kaplow.

Renewable Energy Claim is Deceptive

This past week and there have been many other times this law firm was consulted about a marketing claim by a building owner with rooftop solar panels that advertises they “use” renewable energy, but the owner sells Renewable Energy Certificates (RECs) for the renewable energy it generates, so the Federal Trade Commission says it shouldn’t make the claim.

But it is suggested that the Federal Trade Commission’s Green Guides, designed to help marketers avoid making environmental marketing claims that are unfair or deceptive under Section 5 of the FTC Act, 15 U.S.C. § 45, need to be updated with respect to renewable energy, despite that the Green Guides first issued in 1992 were revised in 2012.

With respect to renewable energy claims, the Green Guides advise, “if a marketer generates renewable electricity but sells renewable energy certificates for all of that electricity, it would be deceptive for the marketer to represent, directly or by implication, that it uses renewable energy.”

Key to the Green Guides are the examples. So, with apologies to the FTC, but there is no better way to communicate the thinking of the federal government than to quote extensively from the Green Guides, including examples published in the Guides with respect to renewable energy:

Example 1:  A marketer advertises its clothing line as “made with wind power.”  The marketer buys wind energy for 50% of the energy it uses to make the clothing in its line. The marketer’s claim is deceptive because reasonable consumers likely interpret the claim to mean that the power was composed entirely of renewable energy.  If the marketer stated, “We purchase wind energy for half of our manufacturing facilities,” the claim would not be deceptive.

Example 2:  A company purchases renewable energy from a portfolio of sources that includes a mix of solar, wind, and other renewable energy sources in combinations and proportions that vary over time.  The company uses renewable energy from that portfolio to power all of the significant manufacturing processes involved in making its product.  The company advertises its product as “made with renewable energy.”  The claim would not be deceptive if the marketer clearly and prominently disclosed all renewable energy sources.  Alternatively, the claim would not be deceptive if the marketer clearly and prominently stated, “made from a mix of renewable energy sources,” and specified the renewable source that makes up the greatest percentage of the portfolio.  The company may calculate which renewable energy source makes up the greatest percentage of the portfolio on an annual basis.

Example 3:  An automobile company uses 100% non-renewable energy to produce its cars.  The company purchases renewable energy certificates to match the non-renewable energy that powers all of the significant manufacturing processes for the seats, but no other parts, of its cars.  If the company states, “The seats of our cars are made with renewable energy,” the claim would not be deceptive, as long as the company clearly and prominently qualifies the claim such as by specifying the renewable energy source.

Example 4:  A company uses 100% non-renewable energy to manufacturer all parts of its product, but powers the assembly process entirely with renewable energy.  If the marketer advertised its product as “assembled using renewable energy,” the claim would not be deceptive.

Example 5:  A toy manufacturer places solar panels on the roof of its plant to generate power, and advertises that its plant is “100% solar-powered.”  The manufacturer, however, sells renewable energy certificates based on the renewable attributes of all the power it generates.  Even if the manufacturer uses the electricity generated by the solar panels, it has, by selling renewable energy certificates, transferred the right to characterize that electricity as renewable.  The manufacturer’s claim is therefore deceptive.  It also would be deceptive for this manufacturer to advertise that it “hosts” a renewable power facility because reasonable consumers likely interpret this claim to mean that the manufacturer uses renewable energy.  It would not be deceptive, however, for the manufacturer to advertise, “We generate renewable energy, but sell all of it to others.”

The guides do not operate to bind the FTC, other governments or the public, and are not legal advice, but they are characterized as the current thinking of the FTC.

Despite that the guides are instructive, this law firm is regularly asked to counsel and advise solar industry participants, owners of green building and others about environmental claims. In an era when consumer class actions are de rigueur it is particularly important that environmental marketing claims are not unfair or deceptive.

All of this exists against a backdrop of the greatly expanding use of solar panels generated by available LEED credits and Green Globes points, federal tax incentives, increasing numbers of local government mandates, not to mention that rooftop photovoltaic panels are chic.

Given this is a fast emergent industry and that consumers have become much more sophisticated about environmental claims in recent years, it is suggested that the current Green Guides need to be updated, especially with respect to renewable energy.

Maryland Expanding Green Building Thru Government Leases

The Maryland Green Building Council recommended a broad and deep expansion of green building leasing by state government and the Maryland Department of General Services has agreed to enlarge what is a “high performance building” for the purposes of state government leasing.

The regulatory change is being widely heralded as a dramatic step forward in expanding green building in the State and across the country, not only because of its efficacy (i.e., it will result in significantly more green building), but because it is a voluntary incentive to private landlords who want to lease to the state that is leading by example (and not creating another mandate from on high).

Maryland has for more than a decade had a statutory requirement that new construction projects 100% funded by the State’s capital budget must meet or exceed the current version of LEED. And in recent years the state has expanded that requirement to allow IgCC and Green Globes constructed building to satisfy the mandate.

But Maryland 100% funds the construction of very few new buildings each year (e.g., public private partnerships are the de rigueur). What the state continues to do is lease buildings and space within existing buildings, however despite a vibrant leasing program little of that space is actually green. This action by the Maryland Green Building Council seeks to buttress leasing of green buildings including significantly encouraging the greening of existing buildings.

The specifics of this are not sexy. This was a change to the “Office of Real Estate, Department of General Services, General Performance Standards and Specifications for the State of Maryland Lease Facilities” last revised July 2013. In those specifications, the Maryland DGS “has established a set of selection criteria for the evaluation of RFP submissions: for those who propose to lease to the state. “Proposal criteria will be evaluated and awarded a value from 0 to 15.”

These changes improve the 2013 specifications including to make them applicable to leases for a tenant space within and existing building, not just a whole building lease (as had been the goal in the past),

e.  In the event the proposed Leased Space is less than a whole building, the appropriate green building system may certify the existing building (e.g., LEED Operations and Maintenance Silver) the Leased Space (e.g. LEED Commercial Interiors Gold) – 35 Value Points.

The revised specifications now apply to lease renewals (a major change when the majority of Maryland DGS leasing activity is a renewal and not a lease of new space),

g.  In the event of a proposed renewal of a lease (i.e., beyond the last stated renewal term), as an alternative to item c and d above, and ENERGY STAR Portfolio Manager score of 75 – 25 Value Points.

And there are other positive changes in that the specification is no longer LEED only, when it provides,

3.a.  High Performance Building Plus (i.e., LEED Gold Certified, Three Green Globes, NGBS Gold, or the equivalent, in a current and appropriate green building system) – 30 Value Points.

And there are other forward thinking edits to the specifications, like, “the State of Maryland will own and control all information and data associated with the building including but not limited to energy and water data and other data associated with High Performance Building, and such information and data shall be considered proprietary may not be disclosed in any manner to a third party without the prior written consent of the State.”

Maryland is already among the greenest places on the planet and was recognized at #5 on the USGBC’s Top 10 States For LEED In 2017.  When this recommendation becomes final in the coming days, Maryland will become even more green.

This is an exciting expansion of green building. This is voluntary. No one in Maryland is required to do anything by this regulatory change, but if a project developer wants to lease to the state there are real incentives for building green.

And maybe most important, this type of government action leading through example and encouraging positive is an ideal model to be replicated elsewhere, resulting in more green building everywhere.

I would be remiss if I did not make the reader aware that Maryland Governor Larry Hogan appointed me to the Maryland Green Building Council in 2017 and I was pleased to participate in this recommendation.

Back to the Future with “Navigable Waters of the United States”

Last week the Environmental Protection Agency and U.S. Department of the Army finalized a rule adding an applicability date to the 2015 Rule (that never went into effect) defining “waters of the United States.”

But, the 2015 Rule will now not be applicable until two years following publication of the applicability date rule in the Federal Register (scheduled to be this week), giving the agencies the time needed to reconsider the very fluid definition of “waters of the United States.”

The 2015 Rule “clarifying” the scope of “waters of the United States” was a politicization of science that would have resulted in tens of millions of new acres of privately owned land being removed from productive use and placed under the jurisdiction of the federal government.

For those uninitiated in the moving target clarifying what are “navigable waters of the United States,” defining where those waterways begin and end has since the enactment of the 1899 Rivers and Harbors Act been the subject of disputes between the federal government and land owners (predating the modern environmental movement).

This current action follows the February 28, 2017, Presidential Executive Order on “Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ Rule.” The Order states that it is in the national interest to ensure that navigable waters are kept free from pollution, while at the same time promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of Congress and the states under the Constitution. It also directs the EPA and the Army to review the existing Clean Water Rule for consistency with these priorities and publish for notice and comment a proposed rule rescinding or revising the rule, as appropriate and consistent with the law. Further, the Order directs the agencies to consider interpreting the term “navigable waters,” as defined in 33 U.S.C. 1362(7), in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States, 547 U.S. 715 (2006).

To meet the objective described in the Executive Order, the agencies are following a two-step process intended to finally provide certainty.

In this first step, the agencies are establishing a legal status quo in the Code of Federal Regulations, by proposing to rescind the 2015 Rule and recodify the regulation that was in place prior to issuance of the 2015 Rule; which is being implemented consistent with court orders staying that rule and with the agencies’ final rule adding an applicability date.

The agencies then plan to propose a new definition interpreting the jurisdictional bounds of the Clean Water Act that would replace the broader approach of the 2015 Rule, taking into consideration the principles that Justice Scalia outlined in the Rapanos plurality opinion. Justice Scalia’s opinion indicates Clean Water Act jurisdiction includes relatively permanent waters and wetlands with a continuous surface connection to relatively permanent waters.

You care about how “waters of the United States” is defined because what falls within the jurisdiction of the 1972 Clean Water Act is the “navigable waters,” defined as all “waters of the United States” (section 502). This is important because all Clean Water Act programs, including non-tidal wetland permits, pollution permits, and oil spill prevention and planning programs, apply only to “waters of the United States.” The Clean Water Act provides the discretion for the implementing agencies, EPA and the Army Corps of Engineers, to define this term in regulations, and this has been further interpreted by the courts.

There has been obfuscation of what “waters of the United States.” From the 1970s through the 1990s, federal courts as well as the agencies interpreted an expanded bigger scope of Clean Water Act jurisdiction as necessary to and consistent with the Act’s goals of protecting water quality. Supreme Court decisions in 2001 and 2006 held that the scope of navigable waters must be interpreted more narrowly. The justices in the 2006 Rapanos decision were split on how this was to be accomplished. The agencies have been working since the Supreme Court decisions to provide clarification and predictability in the procedures used to identify waters that are, and are not, covered by the Clean Water Act. The 2015 Rule, and this new rulemaking effort, reflect the agencies’ efforts to provide that needed certainty and predictability.

Specifically, under this rule, the 2015 Rule, which now does not go into effect until its applicability date two years from now, would be replaced. But claims that this somehow allows water to be polluted is not only not true, but the height of junk science.

The exact same regulatory text that existed prior to 2015 Rule (that gain never went into effect), which reflects the current legal regime under which the agencies are operating, would be re-codified in the Code of Federal Regulations.

This is not a good way to make environmental policy about clean water. It has been over 40 years since the Cuyahoga River caught fire and spurred the 1972 passage of the Clean Water Act. The law was intended to target big, point source pollution like sewage leaks and oil spills, and the continuing efforts to use it to use a definition of navigable water from the 1899 Rivers and Harbors Act to describe the scope of the CWA, not only does not well serve the potable water issues of the day, and are not only junk science, but silly talk.

Despite being published as a final rule, this positive step toward what is properly “navigable waters of the United States” is back to the future, but a long way from being final.

Criminal Conviction in Trade Secret Theft of the Wind

While many people focused on the tariffs of 30% imposed by the United States on imported solar photovoltaic cells and modules last week, most missed the larger renewable energy news story that after an 11 day trial, last Wednesday a federal jury in Wisconsin convicted Chinese firm Sinovel of stealing wind technology, including the theft of trade secrets.

The Beijing based Sinovel is the largest wind turbine manufacturer in China and possibly the largest in the world, so when it is convicted of all charges in a criminal case of stealing trade secrets including copyrighted software to produce “wind turbines, and to retrofit existing wind turbines with [stolen] technology, without having to pay” for the software, products and services, such is significant.

And while the dollar amounts are staggering, .. in March 2011, Sinovel owed American Superconductor more than $100 Million USD for software, products, and services previously delivered, and had contracted to purchase more than an additional $700 Million USD of software, it is the conspiracy using the stolen proprietary information to produce Billions of dollars of new wind turbine products, including sold in the U.S., that is astounding.

The Grand Jury charges in this case read like something out of a Cold War spy novel. In furtherance of the conspiracy,

(a) On or about February 26, 2011, ZHAO HAICHUN [a Chinese national residing in China] emailed KARABASEVIC [a Serbian national  who worked for AMSC Wintec through June 30, 2011] a contract offering a salary of 11 million renminbi (approximately $1.7 million USD) for KARABASEVIC to work for SINOVEL from May 2011 through June 2017, essentially doubling KARABASEVIC’s annual pay.

(b) On or about March 7, 2011, KARABASEVIC used the internet to access an AMSC computer in Middleton, Wisconsin to secretly copy the development folder for the PM3000 [proprietary software that is the Power Module], which included the PM3000 source code.  .. ..

(k) On or about June 2, 2011, ZHAO HAICHUN, in a written Skype “chat,” reported to KARABASEVIC that he was at a wind turbine farm in Gansu, China, and had conducted a “voltage sag” test on twenty-one SINOVEL wind turbines to which the L VRT update had been copied. ZHAO HAICHUN noted that the test was successful and wrote to KARABASEVIC that it was “all because of you.” .. ..

(m) On or about October 25, 2011, SINOVEL and ZHAO HAICHUN copied and caused to be copied the software compiled from the stolen and modified AMSC PM3000 source code into a wind turbine in Charlestown, Massachusetts.

With apologies to John le Carré, you will enjoy reading the complete Grand Jury charges here.

Sentencing is set for June 4 and federal officials previously announced, that taking into consideration the grave financial damage done to the U.S. based American Superconductor and its successor, Sinovel faces fines of up to $4.8 Billion.

To appreciate the import of this much watched criminal case, in a statement released on the day of the guilty verdict, Commerce Secretary, Wilbur Ross said Chinese disrespect for “intellectual property rights, by commercial espionage” poses a direct threat to the U.S.

This trade secret theft decision is a big deal in terms of the increasing attention be paid by the U.S. government to intellectual property theft by Chinese interests and in responding the Chinese aggressive mercantilist policies, both of which portend dramatic shifts in the business of renewable energy and sustainability more broadly in the U.S. and across the globe that have become so intertwined with China.

Saint Paul Green With Envy

When the Saint Paul City Council votes this Wednesday on Ordinance 17-60 it should amend the legislation to not delete, from the existing law, Green Globes as one of the approved green building standards.

The work product of an advisory committee of experts, Ord 17-60 Sustainable Building Regulation Ordinance, alters and amends the 2009 Resolution to Implement Saint Paul Sustainable Building Policy. The existing law was well received and was the subject of several prior blog posts that applauded the effort to make Saint Paul “the most livable city in the United States.”

The existing law has had some efficacy. There have been about 5 projects a year since 2009 falling under the law and while there are less than 50 projects in total they range from single family homes to a ball park.

The modest usage is not surprising because by design, the law only applies to: new construction of facilities owned or operated by the City of Saint Paul; new construction of facilities that the City will become the sole tenant; and, new construction of any facilities within the City of Saint Paul receiving more than $200,000 of City funding.

Commercial projects falling within the law must achieve a “Sustainable Building Standard means any of the following: ..  .. LEED New Construction (NC) 2.2 Silver or Green Globes 2 globes or State Guidelines Building Benchmarking and Beyond (B3) or Saint Paul Port Authority Green Design Review.”

But in what might be described as some Rube Goldberg tinkering with the existing law, the advisory committee of experts, recommended this legislation delete Green Globes as an option.

The rationale expressed at the January 17, 2018 public hearing was that no one in Saint Paul has used Green Globes to comply with the law, so “there was a lack of interest” such that it should be eliminated.

And while such may be technically accurate, it is not correct where there are nearly 40 buildings in the Twin City metro area that are certified by Green Globes and more pursuing certification, including the Xcel Energy Center and a new Whole Foods supermarket. If the City Council tries to pick winners and losers removing Green Globes as one of the options, such may or may not present real antitrust issues, but it is downright anticompetitive and only hurts green building, including in a year when a new version of Green Globes is being released.

After a review of green building rating systems by the Pacific Northwest National Laboratories in 2012, Green Globes has been accepted for federal government building use. Over 100 localities and 23 states currently accept Green Globes for green building projects. This is not about if Green Globes green enough.

This ordinance will make Saint Paul more and darker green. The biggest change is that not only new construction, but now also major renovations, being 10,000 square feet renovated space with replacement of mechanical systems are subject to this law.

Additionally, this ordinance is that it updates and makes very green the Saint Paul Overlay, the compilation of mandatory requirements on top of complying with a Sustainable Building Standard. The overlay will now require: 2% of energy needs to be met on site through renewable energy; that projects be electric vehicle ready (including prewiring); it will include a resilience component, that is a tool for developers to identify “shocks and stressors” a building may encounter and potentially alleviate; and it will require tracking actual water use.

And then, without public explanation the committee recommends adding the USGBC’s Parksmart as a new Sustainable Building Standard. Of course, this would become necessary if Green Globes were eliminated where Green Globes certifies parking structures, but LEED stopped certifying parking structures some years ago. There is nothing wrong with Parksmart, the problem is when a local government removes competition from the marketplace.

Shakespeare described envy as the green sickness. There is nothing wrong with Saint Paul desiring to be the most livable city in the United States, including through green building, but this ordinance now on third reader has garnered national attention because eliminating from use a green building rating system widely utilized in the Twin City metro area sends a covetous and wrong message.

Moreover, given that in 2018 there will be new versions of LEED, ASHARE 189.1, IgCC, ICC 700, and Green Globes, it may be desirable that City Council consider the Sustainable Building Regulation again, including expanding the number of Sustainable Building Standards, sooner rather than later.

Admittedly, with history of controlling 5 projects a year, this ordinance will not save the planet, even with a corrective amendment adding back in Green Globes, but the power of the mindset should not be underestimated and the City should be seen to be strengthening sustainable building requirements, not the opposite.

The updated law is proposed to take effect on July 1, 2018, so there will be no disruption in Saint Paul’s desire to be more green by amending the Ordinance 17-60 to not delete, from the existing law, Green Globes as one of the approved green building standards.

Green Globes Acquired by GBI Expanding Sustainability

Last week Green Building Initiative announced that it had completed the bold and innovative acquisition of Green Globes from JLL and I had an opportunity to speak with Vicki Worden, President and CEO of GBI and Bob Best, Executive Vice President of JLL.

In 2008, JLL, a Fortune 500 company with more than $50 billion of real estate under asset management, purchased ECD, a Canadian sustainability consulting organization that had developed Green Globes. JLL continued ECD’s strategy of promoting Green Globes in Canada as a building sustainability assessment and certification system.

GBI, a nonprofit organization, had first licensed the U.S. rights to Green Globes in 2004 from ECD and continued to operate the Green Globes program in the U.S.

In early 2017, GBI approached JLL with a strategy to purchase Green Globes and make significant investments in improving the technical platform, re-branding Green Globes and expanding its market reach. JLL accepted that Green Globes, which was a small independent operating unit, should be better owned and operated by a dedicated and neutral, not for profit organization that could serve the entire commercial real estate industry, including those JLL competitors who were uneasy about the relationship.

The terms of the sale were not disclosed, but all have been assured that this is a true sale and JLL’s involvement in the future will only be as a customer of GBI.

“As a nonprofit, GBI is in a better position to grow the sustainability movement as the sole owner and promoter of Green Globes, and we have every confidence in GBI’s ability to do so,” according to Bob Best.

Some suggest this acquisition should be seen as further consolidation of the green building industrial complex, but others see this as much larger than the single corporate act that it is an effort to square the circle in a huge expansion of market share in 2018 by Green Globes.

GBI has experienced significant growth over the past 2 years. As of January 2, 2018, 1,594 buildings in the U.S. have been certified by GBI. 1,328 under Green Globes; 266 under its Guiding Principles Compliance program; and 193 dual certified. In total, GBI has certified 299,152,031 square feet, 280,920,871 square feet of which was certified under Green Globes. A map of GBI certified buildings in the U.S. can be found here. Green Globes has garnered significant attention recently, and counts major national brands such as Whole Foods, Fidelity, and MGM Resorts as part of its expanding customer portfolio. Government is widely expanding statutory definitions of green building to include Green Globes from the GSA to the State of Maryland.

An increase in promotion, including a “brand refresh” and a new software platform expected to be completed in 2018 and launched in 2019 will fuel the expanded operations. And Vicki Worden offers assurances to customers who today demand real communication with real people that the “high touch customer service” that has been a hallmark of Green Globes, including keeping the program easy to use, will remain unchanged after this acquisition and after the release of GB101-201X which will become the next version of Green Globes NC when released in second quarter 2018.

GBI has established a Canadian non-profit subsidiary, GB Initiative Canada, to support the growth and previously established use of Green Globes in the Canadian marketplace and will begin a listening tour in Canada to judge customer demand.

No immediate push outside of North America is planned, but GBI is aware of clients with projects on other continents and they have made clear they will support the use of Green Globes as a certification option for those international owners.

Before the acquisition there are already 49 states with GBI certified buildings and this acquisition will no doubt result in more Green Globes building and more green building everywhere as more in the commercial real estate industry drink the green Kool-Aid.

This is more than just the first big green building story of the year. Green Globes is number two with a bullet. In 2018 forward thinking real estate professionals will consider Green Globes favorably as they consider the cacophony of high performance building.

Vicki Worden is clearly excited when she says this acquisition “was a logical and natural next step to further our mission to accelerate the adoption of green building best practices in the built environment.” And she could not sound more confident about the future of green building when she makes the point that growth in Green Globes will be driven by the fact that “third party certification does not have to be bureaucratic or costly.”

2018 will be a Year for New Green Building Standards, Codes and Rating Systems

2018 will be a watershed year in the course of green building standards, codes and rating systems. There has been no other single calendar year that has seen the breadth of substantive change that is before us.

In 2018 there will be new versions of LEED, ASHARE 189.1, IgCC, ICC 700, Green Globes and ..

True believers seek to design to a reality that green building, at its foundation, is fundamentally human; that engineering is second rate without aesthetics in the building architecture; and, that buildings work best when the people who will occupy the space have the most contact possible with those who will erect it.

I am not naïve enough to think that the new 2018 versions of green building standards, codes and rating systems will do all of that or what “The Jungle” did to meat packing or what “Unsafe At Any Speed” did to the automotive industry, but it is clear that the real estate industry is developing out of its green building adolescence.

I am optimistic that a global conversation, although centered in the United States, has begun where people are discovering and inventing new ways to build sustainably. Earlier versions of these green building standards, codes and rating systems were largely written in silos by partisans. What appears to be on the horizon in 2018 is the democratization of green building, in the U.S. and abroad.

And while those lofty ends are of great importance if green building is to expand beyond the duality of government building and publicly owned building on the coasts, the means are huge and present real opportunities not only for better and more building but also for those who will educate themselves and be able to execute on the new standards, codes and rating systems.

Among the positive 2018 updates:

LEED v4.1 will be released in first quarter 2018 and credits will be immediately available for use through a piloting period that will run concurrently with an approval process that will include public comment and a balloting of the members in 2019.

LEED v4.1 O+M Building Operations and Maintenance will be released earlier, again through piloting available for use (hopefully) before the end of January 2018. And it has been announced that a new LEED v4.1 Homes is only days from being released.

When the U.S. Green Building Council announces a new version of the most widely used green building rating system in the world, that certifies 2.2 million square feet daily and has more than 92,000 participating projects in more than 165 countries and territories, it is a big deal.

But in the long run, it may be more impactful that ASHRAE 189.1 – 2018 has been approved and is undergoing “a final accuracy review” in advance of publication. To appreciate just how important this is, one need only recall the, then, unprecedented announcement by the ICC, the AIA, IES, and USGBC in 2014 that 189.1 revisions would be collaboratively developed and be the basis of future versions of the IgCC and LEED.  Despite very real questions about the efficacy of the ASHRAE continuous improvement process being used for these purposes, the approved version of the 189.1 – 2018 has just been delivered to the ICC

The 2018 version of the IgCC has been characterized by the ICC as being powered by 189.1. Following ICC’s drafting of the administrative procedures for the technical content, the document that will be the 2018 – IgCC will be published in June.

ASHRAE 189.1 will be published in that same document as an alternative compliance path.

Development of the 2018 – ICC 700 National Green Building Standard is reportedly well underway, but with much input it is now not expected to approved and published until first quarter 2019. Be aware that this delay has apparently not impacted that NGBS – 2012 will sunset this summer and the very popular 2015 version, which has grabbed significant market share, will remain open for new certifications.

With commanding residential market share, the Home Innovation Research Labs has already certified NGBS compliance of more than 100,000 dwelling units. A growing number of local governments have incorporated the NGBS into local codes and incentive programs. Additionally, because the IgCC allows the NGBS as an alternate compliance path for all residential buildings four stories or less in height, broader adoption of the IgCC will mean more NGBS building

The Green Building Initiative’s Green Globes rating system, recently described as the rating system “with a bullet” with big expansion plans for 2018 to be released by JLL as early as this week (.. which may become a huge green building story in and of itself), has announced the third public comment period for GBI01-201X, which will become the next version of Green Globes NC, ended on December 18, 2017. GBI expects to finalize the consensus process in first quarter of 2018 and complete the rating system revision in 2nd quarter of 2018.

The third public comment version is also being piloted and GBI is currently seeking projects scheduled for completion by 2019. Projects selected for the pilot have fees waived, collaboration with Green Globes assessors and opportunities for public recognition. If you want to learn more about the pilot and to qualify as a participant using this rapidly climbing rating system, contact

The Department of Defense, the largest owner of LEED buildings across the globe, announced an effort to update the Unified Facilities Criteria 1-200-02 High Performance and Sustainable Building Requirements and while a 2018 release date could happen, such now appears not likely.

The situation at GSA is unclear with the new Administrator having been sworn in only 3 weeks ago. Such is significant because GSA, with more than 350 million square feet of building at over 1,600 locations, GSA is second only to the DOD in number of LEED buildings. Since 2003 GSA has required green building, but many believe there will be big changes to those requirement in 2018?

While outside the scope of this blog post, it is significant that China, with the world’s largest green building market, has announced a soon to be released 2018 version of its China Three Star green building evaluation standard for public building (i.e., all non-residential building).

These updates impact contract obligations, including the design and erection of green buildings, as well as government requirements, includes incentives and mandates to build green.

With new leadership at each of the green building groups since the last versions of their standards, codes and rating systems, the 2018 revisions hold great promise for dramatic expansion of market share. This will all result in more and better green building and also immediate business opportunities for those in the green building industrial complex who can execute the 2018 changes.

Fireworks Cause Air Pollution But

In a very good example of striking the right balance between environmental protection and celebratory festivities, despite that fireworks degrade air quality with particulate matter, in the United States we have decided that the pyrotechnic show must go on.

Fireworks have a storied history in the United States best articulated in a July 3, 1776 letter from John Adams to his wife Abigail about the festivities to celebrate Independence Day,

It ought to be solemnized with Pomp and Parade, with Shews, Games, Sports, Guns, Bells, Bonfires and Illuminations from one End of this Continent to the other from this Time forward forever more.

But that historic passage does not explain the skyrocketing popularity of fireworks, on Independence Day, on New Year’s Eve and for many other celebrations. Today, Americans are exploding almost one pound of fireworks each year for every man, woman and child, up from only just one-tenth of a pound annually in 1976, the bicentennial year.

There is actually little environmental regulation for the setting off of thousands of little explosions at a modern fireworks display.

In most states those who handle fireworks are regulated for safety by a state fire marshall who issue permits including of “firework shooters, explosive blasters, explosive manufacturing, and explosive sales.” In many locales individual fireworks displays do not even require a permit.

But fireworks are an undeniable source of fine particulate matter, particles that are less than two and one half microns in diameter. And it is heavy metals, including lead, mercury salts, copper, aluminum, and barium that give fireworks their colors.

However, despite the apparent irrefutable facts, all of this is very temporary and a recent NOAA study verifies there is a surge in fine particulate matter on the evening of July 4 (albeit at only 10 of 315 air quality monitoring stations nationwide). Levels drop back down by noon on July 5, according to the research. The increases are largest from 9 – 10 p.m. on the holiday.

As result of complex chemical reactions resulting from combustion, the miniscule quantities of metals are largely aerosolized at altitude and dispersed high in the sky having no effect on people.

And not to let reality get in the way of government regulation, the Environmental Protection Agency does offer guidance on particle pollution,

Most people will have no reaction when exposed to .. .. Some individuals are more sensitive than others, including possibly infants and children, individuals with respiratory conditions or allergies and asthma, ..

As a practical matter many people who are sensitive to particle pollution heed the EPA recommendation to limit their exposure by watching fireworks from upwind or as far away as possible.

Areas that exceed EPA’s particulate matter standards are known as “nonattainment areas.” Each state is required to develop a State Implementation Plan for how they will control air pollution, including particulate matter, within their jurisdiction. “Wildfires, high winds, volcanoes and fireworks” (.. a list that could only exist in a government regulation or a cognitive ability test for the term that does not belong) each are exempted from being calculated for the purposes of a State Plan under the (Obama era) 2016 Exceptional Events Rule (41 CFR 50.14),

Fireworks displays. The Administrator shall exclude data from use in determinations of exceedances and violations where a State demonstrates to the Administrator’s satisfaction that emissions from fireworks displays caused a specific air pollution concentration in excess of one or more national ambient air quality standards at a particular air quality monitoring location and otherwise satisfies the requirements of this section. Such data will be treated in the same manner as exceptional events under this rule, provided a State demonstrates that such use of fireworks is significantly integral to traditional national, ethnic, or other cultural events including, but not limited to, July Fourth celebrations that satisfy the requirements of this section.

To see how this operates, see the Rose Park, Utah Fireworks Exception Event Report, prepared under an earlier version of the rule.

Such rational rule making is a good thing because fireworks are simply not a public health concern.

In the event there is harm, there is nothing in this regulatory scheme that precludes an actual damaged (e.g., embers igniting a roof) party from seeking judicial redress.

This is a good result. Fireworks have a longstanding and proper place in our nation’s celebrations. Fireworks do contribute to air pollution, but only very modestly over a few hours each year. Environmental regulation of this space would not serve the public good. As a New Year’s resolution for 2018, the regulatory balancing act displayed here should be repeated in other instances.

Migratory Bird Treaty Act Reform is for the Birds

A week after this blog post, the Office of the Solicitor issued a memorandum the subject line of which was, “The Migratory Bird Treaty Act Does Not Prohibit Incidental Take.” The very first page of the Memorandum ends with the sentence, “Interpreting the MBTA to apply to incidental or accidental actions hangs the sword of Damocles over a host of otherwise lawful and productive actions.”

Decriminalizing accidental bird killings “this Memorandum finds that, consistent with the text, history, and purpose of the MBTA, the statute’s prohibitions on pursuing, hunting, taking, capturing, killing, or attempting to do the same apply only to affirmative actions that have as their purpose the taking or killing of migratory birds, their nests, or their eggs.”

The Migratory Bird Treaty Act was enacted in 1918 to protect the migratory bird population from overhunting and poaching.

The Federal government has in recent years threatened that anyone involved in an otherwise legal activity may be subject to criminal liability for the unintentional death of any one of over 1,000 species of birds protected under the Act.

But in a 2015 decision by the Fifth Circuit Court of Appeals reversing a misdemeanor conviction after 10 birds were found in two large open-top tanks at a Texas refiner, Federal Judge Edith H. Jones wrote,

If the MBTA prohibits all acts or omissions that “directly” kill birds, where bird deaths are “foreseeable,” then all owners of big windows, communication towers, wind turbines, solar energy farms, cars, cats, and even church steeples may be found guilty of violating the MBTA.

In an earlier blog post about Federal government enforcement, I wrote, Okay to Kill Eagles with Wind Turbines But Not with Solar Panels or ..

Federal Courts of Appeals have split on whether the Migratory Bird Treaty Act imposes criminal liability on companies and individuals for the inadvertent death of migratory birds resulting from business activities.  Three circuits – the Fifth, Eighth, and Ninth – have held that it does not, limiting taking liability to deliberate acts done directly and intentionally to migratory birds.  Two circuits – the Second and Tenth – have held that it does.  After articulating incidental take was acceptable during its term, on January 10, 2017, in the final days of the Obama Administration, the Office of the Solicitor issued an opinion, in a textualism interpretation, arguing that incidental take is prohibited, which was “suspended and temporarily withdrawn on February 6, 2017” by the current Administration.

Concomitantly, the Fish and Wildlife Service announced it intends to evaluate the general permit issued last year for incidental take under the 1940 Bald and Golden Eagle Protection Act.  When the bald eagle was delisted under the Endangered Species Act, FWS issued a rule establishing a permit program for incidental take under the Eagle Act.  On December 16, 2016, FWS adopted a final rule intended to address some of industry’s concerns regarding that incidental take permit process, but future rulemaking is ongoing; although many believe that a statutory change is appropriate to address the broad breadth of interests.

Despite its title, the World War I era Migratory Bird Treaty Act is a domestic law (not a treaty) that affirms the United States’ commitment to four international conventions (with Canada, Japan, Mexico, and Russia) for the protection of a shared migratory bird resource. Each of the conventions protect selected species of birds that are common to both countries. The Act protects migratory birds by governing the taking, killing, possession, transportation, and importation of such birds, their eggs, parts, or nests.

There is now a proposal in Congress to clarify liability under the nearly 100 year old Migratory Bird Treaty Act, reflecting the significant changes over the last century, including the electrification of homes (.. in 1918 less than 30% of American households had electricity), not to mention how energy is produced, transmitted, and distributed.

The discreet amendment to H.R. 4239 offered by Representative Liz Cheney approved by a 20 -14 vote in a markup of the Secure American Energy Act before the House Natural resources Committee, is,

At the end of Title II, add the following new section:

SEC. 207. CLARIFICATION REGARDING LIABILITY UNDER MIGRATORY BIRD TREATY ACT. Section 6 of the Migratory Bird Treaty Act (16 U.S.C. 707) is amended by adding at the end of the following:

(e) This Act shall not be construed to prohibit any activity proscribed by section 2 of this Act that is accidental or incidental to the presence or operation of an otherwise lawful activity.

In a newsletter to her constituents, Congressperson Cheney said the amendment, “clarifies the Migratory Bird Treaty Act to ensure oil and gas operators, wind operators, home-builders, and folks performing every day activities are not held criminally liable for the accidental take of a bird.”

Owners of wind turbines and of solar panel farms have had their modern ‘environmentally friendly’ and legal businesses criminalized under this century old regulatory scheme. It is those environmentalists who are pushing to amend both Acts to exempt from criminal liability a taking, killing, or other harm to a migratory bird that is accidental or incidental to the presence or operation of an otherwise lawful activity.

At first blush environmentalists might think the 32 word Congressional proposal is not a youthquake and while it may be technically correct that the amendment is not a significant cultural change arising from the actions of young people, it is dramatic modernization of a century old law advanced by one of the newest members of Congress (although an influential member). And it is a modern textualism interpretation of this old law that obstructs renewable energy gains by wind turbines and solar panels.

An amendment offered in a Congressional committee mark up of a bill, is a long way from being the law. But nearly all believe that the 100 year old law must be reformed.

This has already sparked a fiery debate, pitting members of the environmental industrial complex against each other seeking to find a balance between this dinosaur law and the incidental take, including that associated with wind turbines. Congress should act to modernize the Migratory Bird Treaty Act making the amendment the law of the land and if it does not, the Solicitor should act reversing the Obama era guidance and decriminalizing accidental bird killings.