As renewable energy expands across the United States, it's becoming more common for developers to approach farmers about leasing their land for wind turbines or solar panels. While this can be an excellent opportunity for landowners to generate additional income, farmers must approach these offers with knowledge and representation. At a high level, farmers should be aware of what it means to “share” the land they are working on, how much acreage is involved, how long development will take, and who is responsible for restoring the land at the end of the project's lifecycle, to name a few. You may also want to consider how your neighbors feel about renewable development in your area. Here are some things to check off before signing on the dotted line:

Do your research. Before agreeing to anything, make sure you understand the terms of the agreement, the potential benefits and drawbacks, and the developer's reputation. Make sure you understand your rights and obligations. For example, make sure you know:

1. How much acreage will be used?
2. How will construction crews access the land?
3. How long will construction last?
4. What ongoing maintenance access is required?
5. Who is responsible for removing the equipment at the end of the project's lifecycle?
6. How will you be compensated and protected? 

Consult with legal and financial experts. It's essential to have a lawyer and accountant review any contracts or agreements to ensure that you are getting a fair deal. For example, how are you compensated? Just on a lease payment? A portion of the megawatts produced? A portion of the megawatts sold? Do these payments start only after the commercial operation of the development? Or after the development is energized and megawatts are injected into the grid? In these cases, financial outcomes and tax obligations may vary, and you should consult professionals to ensure you are fully aware of your rights. If you'd like some help, you can contact the Dohrwardt Law Firm for help.

Consider the impact on your land and operations. Will the project interfere with your farming operations? Will it require you to give up any valuable land, or will the infrastructure coexist? For example, Agrivoltaics allow coexistence on the same field but are more expensive than traditional solar panels, so you want to know what technology will be used. It is easy to envision solar panels or wind turbines on your property, but farms should consider daily operations. Farms should consider access for construction equipment, ongoing maintenance access, removal of the generation equipment, and even where the grid interconnection equipment is located. Ensure you fully understand the project's impact on your business before signing anything. Also, consider how your neighbors may feel about renewable development in your area. There are many stories of support and opposition to wind, solar, and transmission wires. If your neighbors oppose your project, you may find the project tied up in litigation and other challenges well into the future. 

Negotiate the terms of the agreement. Feel free to negotiate the contract terms to ensure you get the best deal possible. This may include lease payments, land use restrictions, and termination clauses. Also, understand whether your neighbors may have been approached for the same purposes to determine if there is an opportunity to work together on the negotiation of similar terms, etc.

Plan for the future. While renewable energy development can be a great opportunity, it's crucial to consider the long-term impact on your land and operations. Please make sure you have a plan for what you will do when the project lifecycle ends. Is removal of the infrastructure a part of your deal? Are the costs of removal secured so that you know it will be covered?

By taking these steps, farmers can ensure that they are making an informed decision about whether or not to use their land for renewable energy development. With careful consideration and planning, this can be an excellent opportunity to generate additional income while also participating in the energy future.

Please contact the Dohrwardt Law Firm to discuss how you should respond when a developer approaches you. The Dohrwardt Law Firm's energy law practice can help you get business done!

The information provided is only for general information and is not meant to be legal advice.  Information on this website, including third-party links, may not include the most up-to-date information, so you should contact your attorney to discuss your particular matter. Third-party links are provided for convenience only and are not an endorsement by the Dohrwardt Law Firm.