Negotiating Solar Lease Terms: Key Considerations
Yes, you can negotiate the terms of a solar lease. Solar leases involve complex agreements, so it’s essential to ensure that the terms align with your needs and protect your interests. Here are key areas to focus on during negotiations:
1. Duration and Renewal
- Lease Length: Solar leases can be lengthy, often lasting 30 to 60 years. Be sure to understand how automatic renewals work and whether you can renegotiate terms during renewals.
- Termination and Extensions: Clarify terms for lease termination or extension and ensure flexibility for potential property sales.
2. Financial Considerations
- Lease Rates and Escalators: Ensure lease payments are competitive and include escalators to account for inflation. Negotiate any signing bonuses or royalties if applicable.
- Payment Structures: Leases typically involve different payment rates during preconstruction, construction, and operation phases.
3. Access and Land Use Rights
- Access Requirements: Negotiate terms for access across your property and adjacent properties. Ensure you understand any prescriptive rights or easements involved.
- Land Usage Restrictions: Discuss restrictions on grazing, farming, or other activities during the lease, especially once construction begins.
4. Liability and Indemnification
- Liability Allocation: Ensure the lease assigns liability for accidents or environmental issues to the solar company. Include indemnification clauses for protection against legal claims.
- Insurance and Bonding: Discuss insurance requirements and potential bonds for removing infrastructure at lease termination.
5. Property Restoration and Removal
- Removal of Improvements: Negotiate provisions for the removal of solar panels and restoration of the property upon lease termination. Ensure costs are covered by the solar company.
- Decommissioning Bonds: Consider requiring a bond to guarantee removal costs if the solar company fails to comply.
6. Environmental and Regulatory Compliance
- Zoning and Permits: Ensure that the solar company handles zoning and permit costs, ensuring compliance with local regulations.
7. Legal Review
- Professional Advice: Always seek legal counsel experienced in solar leases to navigate the complex terms and ensure your interests are protected.
Negotiations with solar lease companies should be approached with caution, ensuring that all agreements are clearly documented and understood by both parties.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/can-i-negotiate-the-terms-of-a-solar-lease/
