Santa Cruz’s strict new battery storage zoning rules show how safety, zoning, and state law will shape green technology projects in 2026 and beyond.
Why Santa Cruz County’s BESS Ordinance Matters for Clean Energy
Santa Cruz County just proposed battery energy storage system (BESS) zoning that, in practice, confines large grid-scale storage to a handful of parcels near transmission substations. At the same time, officials pushed environmental review out by another three months, on top of an expected year-long California Environmental Quality Act (CEQA) process.
For anyone working in green technology—developers, utilities, climate-focused investors, or local governments—this isn’t just a local land-use story. It’s a preview of how the next wave of clean energy infrastructure will live or die on zoning codes, fire rules, and public trust.
Here’s the thing about battery storage: the technology is moving fast, the climate clock is ticking, but local processes are still running on 20th‑century timelines. Santa Cruz is a textbook case of that tension, and there are lessons here that can help you plan projects more intelligently, engage communities more honestly, and actually get steel in the ground.
The Short Version: What Santa Cruz Is Proposing
Santa Cruz County’s draft zoning ordinance creates a very narrow pathway for grid‑scale battery projects, framed around safety and neighborhood impacts.
Core elements of the draft BESS ordinance:
- Location overlay:
- BESS allowed only on parcels adjacent to high‑voltage transmission substations.
- Initially three 115kV Pacific Gas & Electric (PG&E) substations were in play; setbacks narrowed it to just two (Minty Road and Freedom Boulevard).
- Project size limits:
- Maximum development area: 20 acres.
- Maximum structure height: 25 feet.
- Setback requirements:
- 100‑foot setback from property lines and agricultural resources.
- 1,000‑foot setback from “sensitive receptors” like schools and hospitals.
- Design & technology rules:
- Projects must be outdoors or in single‑use buildings.
- Nickel manganese cobalt (NMC) battery chemistry is prohibited.
On top of that, the Board of Supervisors (BoS) told staff to revise the draft based on public feedback and return in three months. Only then will the CEQA environmental review start, which is expected to take about a year.
The result: a jurisdiction that says it wants clean energy but is effectively limiting grid‑scale BESS to two small clusters of land, under one of the stricter local frameworks in California.
How This Fits Into California’s Battery Storage Landscape
Santa Cruz isn’t operating in a vacuum. Across California, counties have been scrambling to write BESS zoning rules after years of project proposals outpacing local standards.
Recent examples:
- Orange County adopted BESS zoning standards focused on fire safety and land-use compatibility.
- San Diego County updated its rules after several high‑profile battery incidents.
- Solano County created a “balanced” framework—tougher than pure industrial zoning, but broad enough that developers don’t immediately bypass locals for state‑level permitting.
Santa Cruz took a much narrower route. While Orange, San Diego and Solano wrote county‑wide rules for unincorporated areas, Santa Cruz built a zoning overlay that:
- Applies only near specific substations.
- Uses setbacks and acreage caps to effectively shrink the universe of viable parcels.
For grid operators and climate planners, that has consequences.
- Grid reliability: California’s push for 24/7 clean energy hinges on large BESS assets that absorb solar overgeneration and support the grid at night.
- Regional balance: If coastal counties like Santa Cruz heavily restrict storage, inland regions shoulder more infrastructure, more lines, and more local risk.
- Project risk: Developers see jurisdictions like this and start baking in higher soft costs, longer lead times, and a higher probability of abandoning local approval for state processes.
The reality? Local rules can either accelerate green technology or bottleneck it for years.
Safety, SB 283, and the Shift Away From NMC
If you look closely at Santa Cruz’s draft, it reads like a response to two big forces: battery fire fears and new state fire-safety law.
Fire concerns are driving design decisions
Recent incidents—especially at Vistra’s massive Moss Landing BESS facility—have put fire and off‑gas events in the spotlight. Even when no one is hurt, headlines about smoke plumes and evacuations stick with communities.
Santa Cruz’s rules try to answer that fear with:
- Large setbacks from sensitive sites.
- Lower structure heights (which simplifies firefighting and limits visual bulk).
- Outdoor systems or single‑use buildings to reduce mixed-occupancy risk.
- A ban on NMC chemistry, which is generally more energy‑dense but has historically raised more concern around thermal stability compared to lithium iron phosphate (LFP).
From a green technology lens, that last point is revealing. Markets were already shifting toward LFP for stationary storage because it’s:
- Less energy‑dense but more thermally stable.
- Better suited to long‑duration cycling.
- Increasingly cheaper to produce at scale.
The Santa Cruz ordinance basically codifies where the industry was headed anyway: LFP‑dominated grid-scale storage with a heavy focus on fire performance.
SB 283: The “Clean Energy Safety Act” changes the rules of engagement
California’s Senate Bill 283 (SB 283), effective January 1, 2026, raises the bar on planning and fire coordination for BESS projects:
- Developers must meet and confer with the fire authority that has jurisdiction where projects are sited.
- Local fire departments must inspect and sign off projects before commercial operation.
- Developers pay for that oversight.
Santa Cruz delayed its vote earlier this year to wait for SB 283’s passage and for more data from the Moss Landing investigation. That was smart. The county’s rules now sit on top of a statewide baseline that:
- Forces earlier and deeper collaboration with fire agencies.
- Makes safety design decisions (chemistry, spacing, ventilation, shut‑down protocols) part of the political conversation, not just an engineering detail.
If you’re developing BESS in California, you can’t treat SB 283 as a box‑checking exercise. The jurisdictions that embrace this meet‑and‑confer cycle early—and bring data, modeling, and realistic failure scenarios—will build far more trust than those that show up with glossy renderings and vague reassurances.
The Seahawk Project: A Case Study in Local vs State Permitting
Tucked inside this ordinance story is a concrete project: Seahawk Energy Storage, a 200MW/800MWh BESS in Watsonville, proposed by New Leaf Energy.
Where Seahawk stands:
- Application submitted: December 2024.
- Size: 200MW / 800MWh (big enough to matter in CAISO markets).
- Status: Deemed incomplete by Santa Cruz County; no full CEQA review yet.
- Next steps: Once complete, the project and ordinance both go through CEQA.
Here’s the tension: under California law, any BESS project over 200MWh can skip local permitting and go straight to the California Energy Commission (CEC) via its opt‑in certification process.
During the latest Board of Supervisors meeting, some officials openly worried that New Leaf might abandon the county process and head to the state instead. That’s not an idle concern.
From a developer’s perspective:
- County path: Narrow zoning overlay + multi‑year CEQA + intense local politics.
- State path: Centralized, more technical review with broader statewide climate goals baked in.
If Santa Cruz over‑tightens local control without offering a predictable timeline or clear criteria, developers will rationally use the CEC route. The county then loses direct negotiating power on local benefits, design tweaks, and community protections.
For green technology companies, this is the key strategic question:
When do you lean into local permitting to build relationships and shape long‑term acceptance, and when do you move up to state‑level processes to protect project viability?
There’s no one-size answer, but you can stack the odds in your favor by doing three things early.
Three practical moves for BESS developers
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Map zoning and overlays against your portfolio
Don’t wait for a specific project to check local rules. Build an internal map of:- Where BESS is explicitly allowed.
- Where it’s only allowed via overlay or conditional use.
- Where moratoria, de facto bans, or ultra‑strict overlays (like Santa Cruz) exist.
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Design for SB 283 from day one
Assume you’ll be sitting across the table from the fire chief. Show up with:- Clear explanations of chemistry choice (e.g., why LFP).
- Site layouts optimized for emergency access and compartmentalization.
- Scenario‑based emergency response plans and training offers.
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Be honest about project trade‑offs
Communities are tired of vague promises. Spell out:- Local air‑quality and diesel‑peaking plant reductions.
- Property tax and community benefit contributions.
- Visual and noise mitigation details.
- Decommissioning and recycling commitments.
Done well, this doesn’t just get one project across the line. It builds a template you can reuse across counties—and that matters when zoning keeps shifting underneath you.
What Local Governments and Climate Leaders Can Learn
Most counties are now being forced to write BESS rules under pressure—from developers on one side and anxious residents on the other. Santa Cruz shows what happens when safety and control dominate the conversation without an equally explicit strategy for climate and grid reliability.
There’s a better way to approach this.
1. Set clear, measurable goals up front
If your climate plan calls for retiring local gas peakers or supporting a higher share of renewables, say explicitly how much storage you need in your jurisdiction.
Then write zoning that:
- Protects people and sensitive uses.
- Still leaves enough feasible land to meet those goals.
Right now, Santa Cruz is signaling: “We support clean energy in theory, but only in two small places in practice.” That gap between theory and implementation is where projects die.
2. Use performance standards, not only geography
Instead of only saying “adjacent to substations,” consider rules that focus on:
- Fire performance standards (UL, large-scale fire tests, LSFT data, etc.).
- Verified chemistries and system architectures.
- Third‑party commissioning and ongoing safety monitoring.
Geographic overlays make sense for interconnection efficiency, but performance‑based standards give you flexibility as technology evolves.
3. Bring AI and data into the process
Since this post is part of a broader green technology series, it’s worth calling out how AI can actually make this easier:
- Risk modeling: AI tools can simulate fire, plume, and noise scenarios for different site layouts and chemistries.
- Siting optimization: Machine learning can scan parcels, grid data, and constraints to suggest candidate sites that meet both energy and community criteria.
- Public communication: Interactive, AI‑powered visualizations can show residents realistic impacts instead of abstract fears.
I’ve seen projects move faster when technical teams bring this level of evidence into public hearings. It takes the conversation from “what if everything goes wrong?” to “here are the quantified risks and the mitigations.”
Where This Leaves Green Technology in 2026 and Beyond
Santa Cruz County’s draft BESS ordinance is a snapshot of the transition we’re in right now: green technology is no longer just about clever software or cheaper hardware. It’s about where that hardware is allowed to sit, how it’s regulated, and who trusts it.
For developers and energy companies, the path forward is clear enough:
- Assume stricter safety expectations are here to stay.
- Design for LFP‑first, safety‑forward BESS.
- Treat zoning, SB 283, and CEQA as design parameters, not annoying afterthoughts.
For local governments and climate advocates, the challenge is different but just as urgent:
- Don’t write rules that make clean energy visually acceptable but practically impossible.
- Use data, not fear, to shape setbacks and chemistries.
- Align land‑use codes with your climate targets, not just your inbox.
Battery energy storage is one of the most powerful tools we have for decarbonizing the grid and supporting smart, resilient cities. The question over the next few years is simple: will our zoning codes keep up with our climate ambitions—or slow them down?
If your organization is planning BESS or broader green technology projects in 2026, now is the time to audit your target jurisdictions, build a safety‑first design playbook, and get ahead of the permitting curve rather than reacting to it project by project.