Alternative Energy (Solar/Wind)/renting our land for solar farm
We have recently been contacted by a solar company wanting to lease part of our land to put a solar farm on it. We know nothing about this. Do you know what is a good amount of money to lease per acre? We want to make sure we are not being low balled and are receiving a fair price. What do these companies pay per acre for someone's land and is there anything else we need to consider financially? Do we lock in for a long-term price? What else do we need to know if we decide to do this? We have researched online but. I'm sure there are things companies don't put on the internet. Those are the things I want to know about so when it comes time to sign we will know to ask about those things and can ask. Thank you for your help.
>This is a little beyond my expertise but I put in an inquiry with a fellow associate who works with utility size projects. He would have a better >idea of what you are asking. Unfortunately, he is very busy and it may take a little time before he responds. So once he replies, I will >forward on the information. Thanks
I heard back from my friend in the utility size solar construction company. He said his job has more to do with design and installation than it does with the financing but he still has some advise he could give:
1. The land should be purchased/leased at value to the area, if not more. Paying more than the value is the norm but also has a lot to do with the ease of which to use the land. Ask around to your neighbor to see if they are leasing or have solar any land nearby. He knew of one project where they put in a utility size system in a urban area. The land valued at $5000 an acre and the company paid $7000 an acre for the property.
2. The company is going to need to lease the land for a short time before they buy/lease. They can't do any real feasibility testing until they have possession of the land. Here is where they test the grounds, plan out utility access, do water flow test and grade designs. This process takes a year or so.
3. The value of the land to the company will have a lot to do with how little will need to be done to make the land usable for solar. Like flat land good, hilly land not so good, utility line access close or far, utility line size up grades, etc. He said the project they are finishing in Arizona now needed 30 million dollars in excavation work to get it to the point of usable and acceptable to municipality.
4. If leasing, then they are looking at a couple years to build the system, 20 to 25 years for life of the system and 1 year to breakdown the system and restore the land to the usable state that the was before.
5. You should get a real estate attorney involved. He said there will be a lot of paperwork and legalize and that you want to minimize risk and cover your bases.
6. Finally he said that they have seminars for businesses who want to develop large PV projects. He recommends attend one of these so you can see the transaction from the other size of the coin. That will give you some advantage in the dealing since you will know where the solar company will be coming from. To find a seminar he said to Google something like " PV Project Finance Seminar"
I hope that this is helpful and I wish you the best of luck.