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Four considerations when leasing land for solar panel use

On Behalf of | May 20, 2024 | Energy Law |

Renewable energy is becoming more prevalent across New York. With it comes new economic opportunities. However, just like with other business ventures, this market has to be carefully navigated, otherwise you could end up missing opportunities and losing wealth. This can be especially true when you’re considering converting agricultural land into a leased property to be used as a solar farm. Here, you’ll need to be adept at negotiating and finalizing a fair and favorable lease.

Key issues to address in your solar farm-related lease

Regardless of which side of the table you’re on, you have to know the key provisions that go into a solar lease so that you can negotiate them to your advantage. Here are some that are often given too little attention:

  • Lease term: Many solar leases can last 10-15 years or more, which is a significant period of time. If you’re uneasy with such a long-term commitment, then you might want to consider paring that down. On the other hand, if a longer term will provide greater stability and reduce operating costs, then you should consider extending the term.
  • Portion of the land to be used: If you’re the property owner, then you’ll want to ensure that you’re balancing the use of your land so that you maximize its economic value. If you’re the solar company, then you need to ensure that you’re leasing usable land.
  • The effect on non-leased land: Will putting solar panels on your property decrease the value of your other land or restrict your ability to use it? This can be an important consideration when you think about whether to sign off on one of these agreements.
  • How taxes and other fees are paid: You don’t want to be taken by surprise by a sudden and unexpected tax or equipment repair bill. So, ensure the lease clearly addresses who is responsible for paying these costs.

Don’t blindly sign off on a land lease for solar energy

The renewable energy market can be exciting, and joining it can be a great way to generate passive income. But you don’t want to be taken advantage of. So, make sure you fully understand the process and how to protect your interests so that you can competently and confidently move forward.