Negotiating better lease terms with solar developers involves several key strategies for rural landowners. Here are some essential considerations:
Essential Strategies for Negotiation
- Understand the Lease Structure:
- Option Period: This is typically three to five years, during which the solar company conducts due diligence, securing financing and evaluating project feasibility.
- Lease Period: Can be as long as 25 years or more after the option is exercised, involving rent based on per-acre payments.
- Rent and Payment Terms:
- Negotiate for rent during the lease period to be based on a minimum number of acres, even if not all are used.
- Ensure payments include annual percentage increases to account for inflation.
- Access Rights and Liability:
- Clearly understand and define access rights for both parties to avoid potential liability issues.
- Due Diligence and Title Confirmation:
- Ensure that the solar company conducts thorough due diligence on property titles and liens during the option period.
- Regulatory Considerations:
- Understand local, state, and federal regulations that could impact the project, including tax incentives.
- Termination and Restoration:
- Include clauses for lease termination conditions and requirements for land restoration at the end of the lease term.
- Seek Professional Advice:
- Engage lawyers or legal advisors experienced in solar lease negotiations to ensure all terms are favorable and legally binding.
Future Development Potential
- Land with significant future development potential should command higher rents during negotiations.
By carefully considering these factors, rural landowners can ensure more favorable terms and protect their interests when negotiating solar leases.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-can-rural-landowners-negotiate-better-lease-terms-with-solar-developers/
