Renewable Energy & Green Tech
Vi bistår mange danske green tech-virksomheder i USA
The Inflation Reduction Act was signed into law on August 16, 2022, by President Biden. The act significantly increases the use of renewable and clean energy resources and prolong the investment tax credit and production tax credit. This has spiked an interest from foreign investors and foreign companies in investing and conducting business in the renewable energy/green tech industry in the United States.
However, many Danish companies which wish to offer their services may find it difficult to successfully overcome the regulatory hurdles in the sector. We have significant experience in assisting Danish green tech companies to enter the US marketplace.
Is there one set of legislation or regulations that governs the renewable energy and green tech industry?
The renewable energy and green tech policy, and the performance of construction and services hereto, is not regulated by one uniform legislation or regulation on the federal level. Both federal law and state law regulates this area and industry. It is therefore essential for companies to familiarize themselves with state and local restrictions and requirements and create an overview to support the companies’ business plan or investment in the sector.
Are there any consent, license or permit requirements?
Typically, a state specific license or a territory license or permit is required to perform services or construction work on a renewable and green tech project. Depending on the circumstances and the work to be performed this may be achievable through the main contractor’s license.
Regulatory Compliance for Green Tech Companies
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Health, safety and environmental laws
Health, safety and environment is one of the more regulated spaces in the United States and, therefore, various different state and federal laws will apply to the construction work and service provided to the renewable and green tech project. For example, one of the most commonly referred to acts in contracts is the Occupational Safety and Health Act of 1970 and the amendments thereto (“OSH”). The OSH applies to the private sector and federal government and sets out the minimum standards for safety and health standards. Under the OSH, the specific work to be performed and its inherent risks and dangers must be taken into consideration when developing safety and health standards. For example, installation of wind turbines is usually performed at a high altitude and special considerations to prevent falls must be taken into account as such.
The Occupational Safety and Health Administration has developed helpful guidelines and procedures for work and services performed in the renewable and green tech industry which they offer to industry professionals. These guidelines and procedures may be found at the Occupational Safety and Health Administration website.
There is not a general requirement to use a Labor Union workforce. It should be considered, however, that on February 4, 2022, President Joe Biden signed an Executive Order on Use of Project Labor Agreements for Federal Construction Projects. The order requires contractors and other participants to use project labor agreements (“PLA”) on large-scale federal construction projects with a total estimated cost of $35 million or more. As of now, the order only applies to Federal Construction Projects, which means it will generally not affect projects controlled by state and local governments.
While it is not a requirement to use a Labor Union workforce, it is an advantage to either use workers from Labor Unions or offer similar conditions as those under the Labor Unions, if a company wishes to bid on state or local government projects. This is because the state or local government may be inclined to look towards the new standard set by the Executive Order on Use of Project Labor Agreements for Federal Construction Projects as they set their own standards.
Foreign Green Tech Companies in the United States
Generally, there it is not a domicile or incorporation or presence requirement. However, for license and permits requirements, business purposes, visa-purposes, and liability purposes it would be beneficial for the foreign company to have a presence, in the form of a subsidiary, in the United States.
For foreign investors who wish to invest in an extant renewable and green tech project in the United States, restrictions may apply depending on the location of the project, type of project, location of the foreign investor, and the Committee on Foreign Investment in the United States may limit foreign investment.
Insurance requirements are normally governed by the contract between the participants on the project. These requirements are different from European or Scandinavian insurance policies. For example, in the United State insurance limits are usually on a “claim basis”, whereas in Europe or Scandinavia insurance limits are normally made on an “annual aggregate” basis. It is therefore important to check with your insurance provider whether additional coverage is needed.