Vol. 50-2

By Josh Katz and Emily Meier

Recent Publications

An Analysis of “Private Energy” by Yael R. Lifshitz

Introduction

In her article “Private Energy,” Yael R. Lifshitz contributes to the growing legal discussion around distributed generation. Distributed generation (DG) encompasses various technologies that generate electricity at or near where it will be used.[1] Using this approach, Lifshitz evaluates the DG market through the lens of a private law regime[2] and  focuses on aspects of property law and the apparent connection to energy. Lifshitz argues that the role of property law in energy production and consumption is often ignored, and this oversight stands in the way of effective policy.

Lifshitz’s Analysis

Lifshitz begins her discussion by pointing out the function of property entitlements in the realm of the energy industry.[3] She highlights the importance of the locations that energy production and consumption take place. Property entitlements provide access to these unique locations. For example, oil production is ruled by the ability of developers to gain “mineral rights” to drill. Compare this to wind energy, which requires developers to gain “wind rights” to build a large-scale wind farm.   In sum, the different energy resources require distinct property entitlements.[4]

Next, Lifshitz connects property entitlements to the greater energy market and its management, examining the influence of property law on the field of energy.[5] For example, according to the National Renewable Energy Laboratory, over one third of households and commercial enterprises nationwide rent or lease their dwellings.[6] The typical rental or lease agreement prohibits renters from participating in the distributed generation market making it impossible to host a solar photo-voltaic system.[7] Lifshitz calls this the “renters’ problem,” and proposes a change in the standard landlord-tenant leases to include “distributed energy enabling clauses.” These clauses would allow renters to safeguard a right to use solar panels through their lease agreements. [8]

Lifshitz also suggests a novel solution to the renters’ problem called “we-solar.” Under this model, renters would share an interest in pooled-energy and distributed generation resources.  Analogous to a carshare program or a co-working space,[9] we-solar would allow renters to access distributed energy when and where they need it.[10] Lifshitz’s model differs from “community solar” because it allows for a broader range of energy resources—off-site projects, on-site projects, microgrids, and crowd-funding solar.[11]   Moreover, this model gives renters—or even homeowners who do not have the necessary property rights to install solar panels—access to distributed energy.[12]

Finally, from a policy standpoint, Lifshitz establishes three pillars for which policy makers should pay attention if they wish to advocate for the use of distributed generation in their respective states and municipalities. [13] First, they should focus on property entitlements throughout the entire energy cycle, from production, to transmission, and ultimately consumption.[14] Second, policy makers should look to private law tools when approaching the interaction of energy policy and climate change.[15] Third, policy makers need to think about property law as a facilitator and shaper of public policy.[16]

Conclusion

Lifshitz’s proposal utilizes property law in energy production and consumption in a way that has never been considered. Her novel policy proposals could affect the general public’s access to solar energy in the future, and she even considers potentially expanding into implications of the peer-to-peer trading we are currently seeing. Research plays an important role in shaping how policy is formed and how legal communities will need to increasingly utilize creative problem-solving skills.

Josh Katz is a partner at Bickerstaff Heath Delgado Acosta LLP and represents public and private entities before agencies and in state and federal court in the areas of environmental law, municipal law, water rights, and utilities.

Emily Meier is a third-year student at The University of Texas School of Law and a staff member of the Texas Environmental Law Journal.