When negotiating a solar lease, landowners should consider several key factors to ensure they are well-prepared and protected throughout the process. Here are the main considerations:
Key Considerations for Landowners
1. Environmental Risks and Protections
- Hazards from Solar Equipment: Solar equipment can contain hazardous materials, and landowners should negotiate protections in the lease to ensure proper handling and maintenance.
- Environmental Claims: Landowners should be aware of potential environmental claims and seek legal protections.
2. Financial and Tax Implications
- Payment Structures: Landowners should carefully negotiate payment structures to ensure they receive fair compensation for the use of their land.
- Tax Implications: Understanding the tax implications of a solar lease is crucial, as it can affect the landowner’s overall income and liability.
3. Property Use and Restrictions
- Long-Term Commitment: Solar leases typically involve long-term commitments, often spanning decades, which can restrict landowners’ use of their property.
- Exclusivity Provisions: Many leases include exclusivity provisions that prevent landowners from leasing nearby land to other solar developers.
4. Lease Periods and Option Periods
- Option Period: A typical solar lease involves an option period (usually 3-5 years) during which the solar company conducts due diligence.
- Lease Period: After the option period, a much longer lease period begins, during which the solar company operates the solar project.
5. Landowner Obligations
- Non-Interference: Landowners must not interfere with the solar project operations and may need to seek approval for any new constructions or improvements near the solar panels.
- Quiet Enjoyment: Landowners are typically required to ensure that the solar company can operate without hindrance.
6. Decommissioning Responsibilities
- Landowners should understand who is responsible for decommissioning the solar project at the end of the lease, including removal of equipment.
7. Third-Party Rights
- Landowners should review any third-party rights that might affect the lease, such as mortgages or conservation easements, and ensure necessary consents are obtained.
8. Impact on Adjacent Land
- Solar leases can impact not only the leased land but also adjacent properties, so landowners should consider these potential effects.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-key-considerations-for-landowners-when-negotiating-a-solar-lease/
