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Solar leasing can be a sudden and substantial windfall for landowners, but farmers need to arroyo such deals with caution.

A solar leasing array. Courtesy of Michael Nuckols

In July of 2019, Governor Cuomo signed The Climate Leadership and Community Protection Act , which sets a goal for New York State to reduce internet carbon emissions to cypher by 2050. This legislation and related federal programs have created strong incentives for evolution of both small and big-scale solar projects.

Until recently, solar development has largely been absent from the N Country; however, involvement is rapidly expanding. In full general, developers of solar projects seek level sites free of copse near major (three-stage) manual hubs, to include ability substations, and near roads.  These site requirements frequently coincide with agricultural lands .  The size of these projects tin range from a few acres for small community projects that deliver nether five megawatts to dozens of acres for projects exceeding 20 megawatts (and higher).

Financially, solar leasing tin can be a sudden and substantial windfall for landowners. That said, farmers need to arroyo such deals with caution. Consider the post-obit when evaluating a charter understanding:

• Do your inquiry to ensure a fair deal. Consider that multiple companies are investing in solar projects throughout the state. The beginning visitor that approaches you may not always give y'all the all-time lease offer. Is their offer reasonable and fair compared to similar projects in the area or region? Are you lot being pressured to sign a contract without time for acceptable review?  Is payment tied to electrical rates and/or production expectations or is it a fixed annual lease? Charter rates can vary considerably depending on the location (nearly a three-phase transmission hub), local ability demand and rates, land and federal incentives, installation costs, site accessibility, and the amount of country available nearby.

• Inquire the developer if they are willing to locate the solar installation onto portions of your land with the least impact to your farm. Selection of solar locations are often based upon access to the power grid and roads with niggling consideration for the intrinsic current and future value of the farmland underneath. Ideally, solar systems should be placed on soils of lesser agricultural value, retaining acreage with the best soils and geology for strictly agronomical purposes. If y'all needed to expand production, would you have enough of the correct kind of land available to do so? Or, would yous exist left with the rocky soil unsuitable for production? Furthermore, do you have right-of-entry through the project to reach other land on your belongings? If the project is not built or if it is significantly delayed, can you lot go along to employ the land in the meantime?

• Accost uniform agricultural uses within the leased bundle. Continued use of the land for other agricultural purposes is another consideration. Research at Cornell University has shown that sheep can be successfully incorporated into fenced solar installations as a way to reduce the amount of mowing required. Does the contract permit you to place sheep within the leased expanse? Does the contract allow the solar company to hire other farmers or companies to mow or graze the property?  How volition they access the site? Tin the alleys betwixt solar arrays be cut for hay? How high tin the grass get before it becomes a detriment to solar product? If there are trees near the property, or if an side by side pasture is allowed to revert to forest, does the developer have a correct to cut those trees? How deep volition electrical lines be buried?  Contempo demonstration projects have shown that vegetables can be grown under solar panels if they are mounted loftier ( viii-anxiety ).

Would the developer accommodate that type of installation? Tin can the land under the panels be cultivated for crops that tolerate light shade? Will herbicides be used to control vegetation? Tin manure be spread on the packet? Uniform and incompatible agronomical land uses should exist detailed in contract documents.

• Consider the t ax implications carefully.   Installation of solar on a property may potentially take meaning revenue enhancement implications. Land classified equally agricultural may be reclassified as industrial or commercial with higher tax rates. Removal of agricultural exemptions could result in retroactive penalties. Solar panels may be considered taxable improvements. Landowners might consider linguistic communication in leasing contracts to accost such tax increases. They might also consult with town tax assessors prior to signing agreements.

• Comply with zoning and related ordnances. County, boondocks, and village zoning laws might prohibit solar installation to prevent nuisances to next property owners. Is solar allowed on your land? Furthermore, will the Town allow the construction of access roads and associated infrastructure? Farmers might include language in contracts that requires the developer to complete all required studies, such every bit environmental impact statements, to adhere to all zoning requirements, and to obtain all relevant and necessary permits. Consideration must also be given to existing covenants, conservation easements, or similar act restrictions.

• Comply with stormwater and erosion control requirements. Control of stormwater runoff and erosion during construction, peculiarly on sites exceeding one acre, is required by ecology regulations. Furthermore, changes in drainage due to grading and soil compaction are possible; the effects of such changes may not announced for several years. Will the programmer meet all stormwater permitting requirements during construction of the solar assortment? Will they install all required erosion control practices? If erosion occurs, who is responsible for repairing the damage? The method of installation will greatly impact the amount of soil disturbance to be expected. The installation of large physical pads will consequence in significantly more impacts than a contractor using screw piers or piles, whose footprint is comparatively small. Furthermore, who owns any soils that are excavated while leveling ground or installing concrete pads? Can the contractor remove them from the site? Volition they bring soils in from other locations, which may potentially be contaminated with industrial chemicals or contain invasive weed seeds?

• Closely review end-of-lease terms. In general, lease agreements volition exist for the life of the solar panels, typically twenty to thirty years. At the end of the lease agreement, will the contractor be required to remove the installation, to include access roads, should they not renew the lease? Furthermore, if that contractor goes bankrupt, what assurances are given that the site will be restored? Is the contractor willing to postal service a bond for decommissioning and site restoration? If concrete pads are poured, will they be abandoned in place? If earthwork is required to level the site, will natural pinnacle-soils be replaced? Some companies include right-of-start refusal at the end of the contract menstruation. Such a clause could foreclose farmers from leasing to other companies for higher rates. Is that acceptable to you?

• Make sure your bank approves. If you have a mortgage, your lender might need to approve or endorse the lease agreement.

• Accost insurance and liability concerns. Should an accident occur on the property, what happens? Volition the solar visitor provide insurance? Or, will you have to increase your liability insurance to encompass potential losses. For case, if the panels were blown into a roadway or next property during a windstorm, who is responsible? If yous impairment panels during routine subcontract operations, who repairs them?
• Consult an attorney. Solar leasing contracts tin can be circuitous. The bug presented in this paper stand for only a fraction of solar leasing concerns. Given the long-term ramifications, we strongly recommend that you take charter agreements reviewed past an attorney to avoid unexpected surprises such as transfer of mineral rights or mandated renewal after the performance menstruum expires. Due diligence is required to avoid exaggerated claims of financial windfall or outright scams.

Solar leasing has the potential to significantly aid farmers residual their budgets with minimal impact to subcontract operations and should be advisedly considered.

For more detailed information on solar leasing, consult the post-obit publications:

Guide to Country Leases for Solar, Solar Free energy Industries Association.

Landowner Considerations for Solar Leases, New York State Free energy Research and Development and New York Land Department of Agriculture and Markets

List of Community Solar Projects and Associated Developers

Leasing your Farmland for Current of air and Solar Free energy Development: A Beginner's Guide for Farmers; New York Farm Bureau, December 2016.

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Source: https://smallfarms.cornell.edu/2020/04/considerations-when-leasing-agricultural-lands-to-solar-developers/

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