The 2011 Defense Authorization Act signed by the President this week contains a requirement in Section 846 for the Department of Defense to incorporate a clause in specified solar energy contracts requiring photovoltaic devices provided under the contract to comply with the Buy American Act, 41 U.S.C. 10a et seq., subject to the exceptions recognized under the Trade Agreements Act of 1979, 19 U.S.C. 2501 et seq. or otherwise provided by law. Photovoltaic devices are defined for purposes of the legislation as “devices that convert light directly into electricity through a solid-state, semiconductor process.

The contracts to which this new requirement applies include “energy savings performance contracts, utility service contracts, land leases, and private housing contracts, to the extent that such contracts result in ownership of photovoltaic devices by the Department of Defense.”

Although on the surface one might expect this to limit the impact of the requirement to contracts that actually transfer legal title to the devices to DoD, the new requirement actually extends further because of a special definition of “ownership.” “Ownership” of a device by DoD is deemed to exist under the legislation if the device is “(1) installed on Department of Defense property or in a facility owned by the Department of Defense; and (2) reserved for the exclusive use of the Department of Defense for the full economic life of the device.”