Ask questions before signing a solar lease

Solar power technology has grown by leaps and bounds over the past few years. That means landowners are increasingly being approached about leasing part of their property for solar-powered projects.

The size of the proposed projects is large – ranging from 60 acres to 800 acres, said Dale Arnold, Ohio Farm Bureau’s director of energy, utility and local government policy.

He has been advising Farm Bureau members on a few things that should be considered before leasing land for these projects:

  • Research the company. Does the company have experience with long-term development, construction and operation of the facility, or is this lease package being created for speculative purposes?
  • Contract vs. regulatory issues – Some program provisions are determined in your negotiated lease; others are a matter of state and federal regulations. Know exactly what provisions you can control and negotiate.
  • How long will the project be on your property? Is the amount of money made in leasing the land more than the amount of income lost from agricultural production of that land?
  • What are the tax ramifications? How will this affect your Current Agricultural Use Value (CAUV)?
  • Who pays the cost of dismantling the solar project and returning the land to its original condition at the end of a lease? What happens if the company goes bankrupt? The lease contract should address these questions.
  • Be aware that many contracts say the lease can be extended at the discretion of the company. Technological advances could allow these projects to go on for decades.
  • How will these solar farms affect conservation practices and programs? Do adjustments need to be made to the building of these structures to address environmental and conservation concerns?
  • Be prepared to deal with media coverage – these projects will result in local public hearings, and state agencies will be involved in the permitting process.
  • Before signing a contract, consult an attorney that is familiar with utility and energy market rules, regulations and law.
  • Remember that none of these projects qualify for eminent domain.

To learn more about these solar-power projects, contact your county Farm Bureau to request an informational meeting with Arnold.

Leave a Reply

Your email address will not be published. Required fields are marked *