The use of solar energy is on the rise and solar companies require land where solar arrays can be installed. This means that farmers and landowners have the option of leasing their land for these solar installations. However, when you are a farmer or landowner, you need to do your own research and find out as much as you can about leasing your land to solar companies and developers.
While it is a complex subjected, here are some things you should know about this process:
Initial site visit
The developer will first do an initial site visit to see the land they wish to lease and develop. The size of the land required depends on how many megawatts (MW) of solar panels they wish to install. The purpose of visiting the land is to see if you have the required space, how much sunlight the land gets, the quality of soil and the proximity to the grid infrastructure. If the visit is successful, the developer will then make an offer to lease the land.
Letter of intent
A letter of intent (LOI) is used by the developer for making an offer. It outlines their terms and any problems that have to be dealt with before the lease and development can begin. For instance, they may require the land’s obstructive power lines to be cleared. These issues have to be addressed to meet the developer’s requirement.
Lease option
If the developer doesn’t use an LOI, they might use a lease option for negotiating the lease of a solar land farm. You will need a lawyer at this point to help you do the negotiations. In a lease option, you will give two to three years to the developer for exercising the lease. The agreement also states who will pay the taxes, what will happen if the developer changes their mind and more such issues.
Lease
Now, the lease is finalized by both parties and you need to collaborate with the developer to figure out how the land should be used. It is also a good time to figure out how you will calculate rent, whether it will be based on the power in the systems (MW) or according to acreage. Go over the final lease carefully with your lawyer.
Other factors
Remember that the leasing process is not the only thing to bear in mind. There are other questions about leasing land for solar farm development that you can ask. The other factors that need consideration include how the surrounding landscape will be affected by the development. For instance, will the nearby trees, shrubs, crops and power lines have to be removed? You also need to find out the solar farmland lease rates in your area because it will affect how lucrative and profitable the project might be for you. Moreover, you should also ensure that you are working with a reputable and well-known developer by doing some research and taking a look at their previous projects.
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