Anyone have actual experience with leasing their land for commercial solar?

[lostcause]

I've had a couple mailings come in over the last year or so from a company wanting to lease land for setting solar panels. I've passed them off until now because i'm really busy and just haven't had the time to think about it. the last package was a lot bigger, and i'm going to do some research if i can. I'm just wondering if any of you have real world experience on this and not just opinions - i'm looking for details and facts where possible. There's a post started earlier this month with over 100 posts already, so i get that this can be a polarizing topic on a site like this, so if you have experience and don't want to get dragged through the mud, you could PM me with your experiences.

First off, i have a small piece of unused property - 12~ish acres of half hilly woods and half flat, road level field. I'm not farming any of it for myself, and don't expect to. I currently let a local farm use the field to plant crops that are sold at local supermarkets. They pay $50 an acre, so $300 per year. that's a little less than 1/2 the taxes on the whole 12 acre lot. The solar company is stating $2500 an acre per year for 20 years - that's 50x the return right now, plus a $5000 bonus at the beginning. in 20 years i'm sure it's a lot less of a return per acre in comparison, but this number makes it hard to not consider, or at least investigate.

What i'm wondering is has anyone experienced or know what happens in a case of default? i'm sure this is all driven by federal grants and subsidies, so if the money dries up, companies always find ways to go out of business without losing any money on their end. are there cleanup issues? a friend of mine thinks that people are getting stuck with hazardous cleanup on these because the companies are defaulting. i see these going up everywhere here now - they just started popping up 3-5 years ago - solar panels on aluminum frames - assuming that they have a 20 year lifespan then a serviceable panel would still have resale value at any point in the lifespan wouldn't it? And scrap aluminum is never hard to get rid of. Are there chances of anything contaminating the ground from them? not a solar panel expert... i'm likely 10-20 years from retirement depending on the world, so it just seems like a nice potential nest egg.

 

[dodge man]

Im retired before I retired I worked on both solar and wind projects as a land surveyor. I have heard numbers thrown around on how much it pays but I have no direct memory of the amounts. I’m assuming it’s attractive for the land owners because a lot of them jump on it.

The only real good advice I have, and most governments require it anyway, is a bond to decommission it at its end of life. That way you know you aren’t stuck with a bunch of junk solar panels on your land.

 

[MGP4506]

I've had a couple mailings come in over the last year or so from a company wanting to lease land for setting solar panels. I've passed them off until now because i'm really busy and just haven't had the time to think about it. the last package was a lot bigger, and i'm going to do some research if i can. I'm just wondering if any of you have real world experience on this and not just opinions - i'm looking for details and facts where possible. There's a post started earlier this month with over 100 posts already, so i get that this can be a polarizing topic on a site like this, so if you have experience and don't want to get dragged through the mud, you could PM me with your experiences.

First off, i have a small piece of unused property - 12~ish acres of half hilly woods and half flat, road level field. I'm not farming any of it for myself, and don't expect to. I currently let a local farm use the field to plant crops that are sold at local supermarkets. They pay $50 an acre, so $300 per year. that's a little less than 1/2 the taxes on the whole 12 acre lot. The solar company is stating $2500 an acre per year for 20 years - that's 50x the return right now, plus a $5000 bonus at the beginning. in 20 years i'm sure it's a lot less of a return per acre in comparison, but this number makes it hard to not consider, or at least investigate.

What i'm wondering is has anyone experienced or know what happens in a case of default? i'm sure this is all driven by federal grants and subsidies, so if the money dries up, companies always find ways to go out of business without losing any money on their end. are there cleanup issues? a friend of mine thinks that people are getting stuck with hazardous cleanup on these because the companies are defaulting. i see these going up everywhere here now - they just started popping up 3-5 years ago - solar panels on aluminum frames - assuming that they have a 20 year lifespan then a serviceable panel would still have resale value at any point in the lifespan wouldn't it? And scrap aluminum is never hard to get rid of. Are there chances of anything contaminating the ground from them? not a solar panel expert... i'm likely 10-20 years from retirement depending on the world, so it just seems like a nice potential nest egg.

I talked to a company that is hired to install solar panels, they do not own or run them. He said the money is good for the landowner upfront. The issue will come down the road once the panels start to fail. I was told they have a life expectancy of 20 years give or take. Also, he said depending on their location, size of the field and other factors such environmental (snow, fog...) it takes about 15-20 years for a return on the cost (install and maintain). He said the companies make their money on the subsidies the government gives them. Once they get their money from the government, they do what most companies do when the money dries up. They file for bankruptcy and walk away leaving the landowner to pay for the cleanup. Some landowners are smart enough to require a bond be taken out to pay for this however that amount is typically based off current cleanup estimates. As we all know the cost of things always go up.

So before leasing your land out you need to take all this into account.

 

[ddbackhoe]

“mailbox money”, the check that mysteriously shows up once a month. Similar experience, we got involved with a cell tower. My suggestion, get a lawyer earlier rather than later. There are a lot of minor details that can get ”lost” in the translation. How do they access the site, how much clearing are they actually doing, is all waste hauled off, new right of way easements, reassignment of rights, etc.
Having them post a bond for end of life/discontinuation of service is a very good idea.

Three things to consider (IMO);
will the neighbor be able to continue to farm on the property?
will you really like your new view?
who really benefits from the install, you and your neighbors or some place just buying renewables with govt money?
They recently put in a large solar project near us, but its for a company in Washington DC not the local grid.

 

[JJT]

Typically solar companies don't want treed lots and they don't clear cut wood lots. So you really have a 6 acre field ready for solar panels. Around here solar companies don't mess with anything under 5mw of production, that takes 25 - 35 acres. They are paying about half of what you were quoted, with 30 year leases and the option to renew for another 10. The developer also takes care of the increased tax burden, that might be why you are seeing a 2x quote. Local and state requirements here in NY require demolition bonding funded before construction, by the developer. The land owner does not get stuck rehabilitating the site in 30 - 40 years.

I think your offer is too good to be true for your small parcel. Does your land have ready access to 3 phase power? If so, can the existing grid handle the new power? If the answer is no to either of these questions, a solar farm is not feasible without a costly grid upgrade.

 

[5030]

Getting stuck with remediation in the end can be very costly as end of life panels are considered hazardous waste and then there is removal of the supporting structures. I'd be very careful about leasing my land to any solar installer. Seen people get burned around here already.

 

[bigtiller]

I am the landlord of a cell phone tower for over 15 years. My advice, take the first offer that is made in writing to an attorney who is experienced in this and similar matters. Make a counter offer, they have room to wiggle.

 

[Fuddyduddy1952]

Yes step one would be a good attorney. There are so many things to consider. What happens if you move or pass away? Remediation, someone gets injured on your property, how it impacts your insurance?
Me...I wouldn't consider it at any price.

 

[5030]

I am the landlord of a cell phone tower for over 15 years. My advice, take the first offer that is made in writing to an attorney who is experienced in this and similar matters. Make a counter offer, they have room to wiggle.

cell towers are a lot different because the footprint is small compared to a solar array.

 

[dodge man]

A couple of things to add. Of the solar farms I worked on, they were all located near power lines so they had a short distance to tie into the grid. All the ones were also on open ground, they didn’t seem to want to do any clearing.

I have seen some go up that were on smaller parcels like yours.