Considerations for Utility Scale Solar Farm Land Lease Agreements

PSEG Wyandot Solar FarmOften heard questions from Ohio farmers these days include “Who is this solar developer?” and “Is a solar land lease agreement good for my farm?”  Well, if you could lease your farmland for $1,200 per acre over 30 years, would you do it? Considering the USDA 2016 National Agricultural Statistics Survey values Ohio cash rent at $160 per acre, this may seem like a rhetorical question. And while on the surface this may seem like a perfectly logical, economic decision, it is important to carefully consider all of the impacts of converting farmland to solar energy production.

As part of an agreement with the Public Utilities Commission of Ohio, AEP Ohio recently committed to developing 400 megawatts of solar in Ohio. In December of 2016, AEP Ohio issued a request for proposals (RFP) to develop up to 100 megawatts of solar energy. In response to the recent RFP, solar developers and representatives from land acquisition firms are contacting farmers and landowners throughout Ohio to secure long-term land lease agreements to site a large utility scale solar farm.

Solar leases are complex long-term commitments with various social, financial, and legal implications. One of the most important components of utility scale solar energy development is the contract between the landowner and the developer, providing site access to the developer. This is often referred to as the solar land lease.

Utility scale solar energy leases are long-term agreements which often range from 20 to 30 years or more. It is crucial that landowners fully understand the details of the agreements to ensure they are adequately compensated and their property rights are protected.

When considering a utility scale solar land lease agreement, do not fall victim to making a rushed decision. Many times, the initial lease is written in favor of the developer to best achieve their long-term interest, flexibility and objectives. Do your homework, conduct a detailed assessment of the developer, the overall project, and seek advice from your tax and legal professionals before signing any paperwork. While every project and lease is unique, below is a list of common issues to consider prior to signing a solar land lease agreement for your farm.

  1. How will a solar lease agreement influence my property taxes?
  2. Are there pre-existing deed restrictions on my farm?
  3. Will a solar project impact my eligibility for Current Agricultural Use Value (CAUV)?
  4. How does a solar land lease impact my property rights?
  5. How will a solar project impact the surface water on my farm?
  6. How is the project decommissioned after the lease expires?
  7. Who is responsible for insurance and liability for the solar project located on my property?
  8. What are the per acre lease rates for utility scale solar projects?
  9. Who will maintain the land?
  10. Is a utility scale solar project subject to the public utility tangible personal property tax?

This blog article has introduced a few of the many of issues to consider before entering into a utility scale solar lease agreement. Landowners approached by a developer to lease their land should carefully consider the legal and tax issues associated with the agreement. Furthermore, landowners are encouraged to work with an attorney that is familiar with energy land leases agreements to negotiate terms representing the landowners long-term interest.

Additional Resources

Eric Romich is an Assistant Professor and Extension Field Specialist for Energy Development.

Please find the answer to the question from the comment below here.

  • “What about a multiplier? $1200 an acre today sounds like a lot of money, but in 20 years it’s worth a lot less. What is the average rate for the multiplier? What should a land owner ask for?”

Everybody has a story

Columbus Dispatch headline

The Columbus Dispatch – August 25, 2016

Everybody has a story. We are all raised somehow, somewhere, by somebody. We are influenced, and we have experiences – good and bad – that shape us. At the end of our lives we leave a footprint, a legacy. Some legacies endure for eternity such as Socrates, Aristotle, DaVinci, and maybe our own George Washington. For most of us our legacies are much more fleeting than these bold examples of humanity. We may be remembered by our friends, and perhaps by our family for a generation or two. But what do they remember and what stories are passed down?

These ruminations came to me after participating in a recent statewide Opiate Crisis Conversation. After the conference I went to dinner with my son who is in his 30s. He told me the story of his roommate who I will call Nick. Nick never met his father, we don’t even know if Nick knows his father’s name. Nick’s dad left his mother when she was pregnant and never came back. Nick’s memories of his mother are that she was a drug addict. That’s how he pictures her, that is his memory of her, that’s what he says when he talks about her. We don’t know what drugs she took, we don’t know if she had a job or where she lived. But we do know she was a drug addict.

Because of his mom’s addiction, Nick was raised by his grandparents. When Nick did spend time with his mom he remembers danger and fear. His mom would take him on adventures, but not to Cedar Point. His adventures were accompanying his mom when she bought drugs.  Instead of visiting the library or staying home and reading, he saw his mom beaten up by boyfriends. These are his memories of his mother.  Nick’s mom died from the ravages of drug abuse before he graduated from high school. He went on to graduate from college and has steady employment with a good company.

When you think about what Nick saw, what he experienced as a very young and impressionable child, what his grandparents were feeling, and the total hopelessness and despair of his mother, it is heartbreaking. Every one of them, each in their own way were impacted, were terrified, were living on the edge, and all of them lost a piece of their soul. His mother lost her life.

His grandparents became his loving parents raising their grandchild while watching their own daughter dissolve under the spell of drugs.  They were parents who watched their adult child lie, cheat and steal because of the craving and dependency that drew her in more and more each day, promising to relieve the pain and ironically killing her at the same time. Imagine the fear felt by grandparents for their grandchild when he spent time with his mother and the stress of raising their grandchild while watching their own child self-destruct. In a different time and a different place they would have been enjoying retirement, instead they were surviving day to day, but not really living.

Then I think of the ripple effect of one person’s actions on a community and on a family. Nick’s grandparents were stable, law abiding citizens, they were you and me and our neighbors, so was his mom, so is he. But Nick’s mom took a turn, a wrong turn and never recovered.  She ended up dying at a young age, leaving behind a son who talks about her in terms of her drug use, and how he saw her treated. That is her legacy. That is her footprint.

Nick is in his 30’s now, and doesn’t have a serious relationship. I don’t know if he ever will. His filter, his frame of reference if you will, is something I cannot even begin to fathom. What is even more profound is that this story isn’t a rare or an isolated incident. I am aware of many stories like this, so many that I have lost count. So I circle back to my original thought. Everyone has a story, and everyone leaves a footprint. We all hurt people and are hurt by people. We all have successes and failures and make mistakes. Sometimes we recover, sometimes we don’t. As a parent, a sibling, a spouse, a friend, and a daughter, I hope that my legacy transcends my mistakes and that the world is gentle when (and if) I am remembered. When I think of all the lost souls, the wasted lives, and the fact that each of us is one decision away from being there, I am very grateful for today. That is my story. What is your story?

Ohio Drug Overdose Data by County

Kyle White is a County Extension Educator in Medina County (Western Reserve EERA).

The Plastic Paradise: STOP!

LIFE Magazine: Throwaway Living

Credit: Life Magazine, 1955.

If you took a moment to look around you right now, how many items would you see made of plastic? As I sit in my office, I have counted at least 30 such items. Fortunately, nearly all them are recyclable. Did you find any items made of single-use plastic, only useful for a few hours, a few minutes, or maybe even a few seconds? These single-use plastics are becoming increasingly more common in our everyday lives, having catastrophic effects on our natural environments, the health of wildlife, and maybe even the health of humans. So the big question now is how did we get here? How did we become a throwaway society that embraces “throwaway living” as Life Magazine called it on their 1955 cover?  Well, for one, throwaway plastics make our lives so much easier. But, are you still willing to take the easy way out when you know of the negative impact our everyday plastic decisions make on our natural resources?

Chart

Data Source: Hardy and Bartolotta, unpublished.

To better understand the answer to this question, Scott Hardy, Ohio Sea Grant Extension Educator in Cuyahoga County, and I conducted a study in Northeast Ohio to understand how often people use single use plastics, the barriers to using reusable alternatives, and what reminders to encourage reuse people prefer for plastic bags, plastic water bottles, and plastic cigar tips. (For this blog, I will just focus on the plastic bags.)

We learned that people in northeast Ohio use reusable bags about 30% of the time and plastic bags about 28% of the time. The most common reason for not using reusable bags is people either forget them at home or in the car. So how do we remind people to bring their reusable bags? Most prefer an incentive, such as money off their purchase, to encourage them to use reusable. Seventy-five percent were also in favor of either a ban, fee, or both a ban and fee on plastic bags.

So how do you fit into the equation? Do you shop? Do you use bags to carry your things from the store? Do you throw those plastic bags away when you get home?

Credit: New Scientist.when you get home?

Fact Check! The average use-time of a plastic bag is 12 minutes. Yet, the lifespan of a bag in the environment is, well… a really long time. Plastic never degrades. It becomes smaller and smaller pieces of plastic that get eaten by our tiniest animal zooplankton making its way up the food web to the fish you like to eat like salmon and perch. “What can I do” you ask? Make it a habit to bring your own bags to the store. It takes 66 days to form a new habit.

Your challenge: For the next 66 days, use ONLY a reusable bag. Come May you will be a reusable bag-toting champion! If you forget your bag at home say “No thank you” to a plastic bag and hand carry it out. Lake Erie thanks you, the zooplankton thank you, and I thank you.

Jill Bartolotta is an Extension Educator with the Ohio Sea Grant College Program.

Endnotes:

catastrophic effects: Bartolotta, J. 2016. You are the solution to the “Eww”. The Ohio State University Community Development Extension Blog.

Website: https://u.osu.edu/extensioncd/tag/marine-debris/.

1955 cover: 2016. The Macro Cost of Micro Contamination. Zero Waste in Action.

Website: http://zerowastezone.blogspot.com/2016/06/the-macro-cost-of-micro-contamination.html

12 minutes: Save the Bay. Reducing Single-Use Plastic Bags in the Environment. Fact Sheet. Website: https://www.savesfbay.org/sites/default/files/news_release/Fact%20Sheet%20single%20use%20bags_MASTER%205-9-14.pdf

get eaten by our tiniest animal zooplankton: New Scientist Magazine. 2015. Plankton snacking on plastic caught on camera for the first time. Website: https://www.newscientist.com/article/dn27849-plankton-snacking-on-plastic-caught-on-camera-for-the-first-time/.

66 days: Lally, P. van Jaarsveld, C.H.M., Potts, H.W.W., and J. Wardle. 2009. How are habits formed: Modelling habit formation in the real world. European Journal of Social Psychology. 40:6, pp. 998-1009. Website: http://onlinelibrary.wiley.com/doi/10.1002/ejsp.674/abstract.

Looking for Leadership?

Leadership! It is a basic fundamental need for any organization to perform at its best. And whether you want to learn more about public service or have thought about becoming more involved in your community, participating in a formal leadership development program may be helpful.

OSU Extension has been involved in such programs for over half a century and recent research shows such programs make a difference. Currently, OSU Extension Clermont County is working to address the needs of local elected officials and appointees of local government committees, zoning and planning commissions, school boards or task forces. The Clermont County Organizational Leadership Academy (CCOLA) includes eight, weekly two-hour workshops involving foundational principles of organizational leadership and decision-making tools enabling participants to learn more about their leadership style and those of others. It also provides opportunities to explore effective strategies for team-building, conducting effective meetings, communicating with citizens and media, managing conflict and building sustainable communities.

The components of the CCOLA can also be customized to fit a specific organization for hands-on training. The workshops below are available on single-session basis in addition to the multi-session Academy format. The sessions are:

  • Public Officials and Public Service: Build a framework for improving your tenure and service in public office. Topics include Duties and Responsibilities of Public Officials, Codes of Ethics, Standards of Conduct, Conflict of Interest, and Open Meetings Laws/Executive Sessions.
  • Team Building: Explore the principles for building effective working relationships with others, with organizations or local governments. Learn more about these relationships with Real Colors ®.
  • Conducting Effective Meetings and Decision Making: The goal for every public official is to “make good decisions.” What is a good decision?  How do we make them? Learn the most effective techniques to conducting effective meetings as well as decision-making processes.
  • Communicating and Working with Citizens and the Media: How can you develop positive and effective working relationships with all community residents, as well as with media representatives? Polish your skills for building effective relationships, while engaging community residents and improving media relations.
  • Building Sustainable Communities: Explore the relationships between growth, development, environment, ecology, social structures and the civic culture. Learn how to build sustainable communities in the areas you serve.
  • Conflict Management and Dispute Resolution: Learn how to work through difficult situations by developing conflict and dispute resolution skills needed to create strong, lasting collaborations.
  • Leadership Skills and Styles: Do you know your leadership style? Do you know that understanding leadership styles and types can help improve  interpersonal relationships and the effectiveness of your organization(s)? Gain skills to improve the operations and effectiveness of your governing body and your personal decision-making.
  • Intergovernmental Relations: Opportunities and Challenges for Cooperation: Explore Ohio law pertaining to opportunities and limitations for intergovernmental agreements and cooperative arrangements. Invest in opportunities to cooperate with others.

For more information about the Clermont County Organizational Leadership Academy or how to register, go to OSU Extension – Clermont County, go.osu.edu/ccola, or contact me using the information below. How are you making your organization or your community better?

For further information, contact Trevor Corboy, Clermont County Community Development Program Coordinator, at 513-732-7070 or email at corboy.3@osu.edu.