First it was wind and now solar is all the rage. Much like wind easements, solar farm easements are not to be taken lightly nor signed up for without due consideration.
Most of the of the time, the solar farm lease is an exploratory lease that signs up all your acres for a potential installation of solar. You can do quick math on the per acre amount if a farm is installed on your fields and see nothing but easy street ahead. A close reading of the actual terms and conditions could result in the solar farm optioning just a piece of your property and leaving you with an odd shaped parcel to farm around that grows palmer amaranth all season long and frustrates your remaining acres into less productivity, not more.
Here are some things to consider when contemplating your new bright sun shinny day.
- How long is the courtship? The developer may seek to simply tie up your acres under their umbrella and shade out the competition from offering a competitive lease.
- How long is the actual installation going to be on site?
- How much? Does the developer have to take the whole acres offered under contract or just sum? Can you impact the shape of the final solar farm? How much can they back off of their original leased footprint and shave your payments down?
- How about inflation? We know the dollar movie theatre in town had to finally move to $5.00 to stay with the times. If this is a 50-year lease, what is a deal today is a deal breaker down the road. Look for an escalator clause or an indexing mechanism to keep up with changing costs.
- Who gets the goodies? These farms have carbon credits, tax credits and other incentives to install. Who gets those, you or the developer?
- Who is going to clean this mess up? To the solar farm developer, what happens under the panels isn’t important, the sunshine is. Do they care about keeping weeds out of the under carriage of the solar array? Who can spray what and how do we keep the solar farm up to your standard are questions that need to be addressed? Also, who pays to take all this stuff away when its out of date and one or the company is bankrupt. A bond might be a great thing to ensure that money is available to sweep up the broken glass and twisted frames after the next straight-line wind puts the company out of business.
- How is this installation going to impact run off and sub surface drainage?
- Who is responsible for liability coverage on things going wrong on the solar farm?
- How will future bankers feel about mortgaging this property subject to these long-term leases?
- How do I get out of this lease if I can?
- Will my county zoning ordinance allow it?
- Who fixes things and who pays for damage to surrounding crops when equipment needs to come in to fix things? How is the crop damage calculated?
