Leasing land for solar use


A seminar entitled “Solar Leasing 101” was held in the basement meeting room of the Highland County Administration Building Tuesday, and according to OSU Extension Agent Dr. Brooke Beam, the goal was to give farmers and landowners information and legal advice to guide them if they’re planning on leasing their land to solar energy developers.

“This was about what goes into the leasing process and things they may want to take into consideration before any contracts are signed,” Beam told The Times-Gazette. “This was step one, and next Monday will be step two, which is more of an overview of projects that are already being implemented.”

The eighth annual Ag is Everyone’s Business event is scheduled for Monday, Feb. 24 at the Southern State Community College Patriot Center with Gov. Mike DeWine as the keynote speaker.

Following his remarks, those in attendance can take part in breakout sessions. One of the three will deal with solar power.

Highland County Chamber of Commerce Executive Director Destiny Bryson said experts and representatives of the Willowbrook Solar Farm project will be on hand Monday to speak about the project.

Tuesday’s seminar was a marathon educational session that presented two aspects of utility-scale solar power generation, an overview of trends, policy and development in Ohio, and the legal ramifications of entering into an agreement to lease farm land to a solar energy development firm.

Eric Romich, an OSU Extension field specialist for energy development, spoke on the history and status of solar power generation in southern Ohio, pointing out that there are two main reasons developers are focused on this region.

“This part of the state has a high degree of what we call Global Horizontal Irradiance,” he said. “And the other reason is when you plot it out on a map, this region has close proximity to transmission and interconnection lines.”

The five points of his presentation focused on utility-scale solar trends, Ohio solar policy, solar development in Ohio, health and safety impacts of photovoltaic (PV) power and utility scale PV solar construction.

He said the fourth point – health and safety impacts – are what trouble people the most.

“Most of the solar cells are compliant with the EPA standards and they’re not classified as toxic materials when it comes to recycling them,” Romich said. “Most of that solar panel is aluminum, glass and some plastics, and in the photovoltaic cell, you’ll find silicon, phosphorous and boron with the toxic component being the solder that was used.”

He admitted no one wants lead dumped into the environment and said that on average, a solar panel contains about 13 grams of the metal, which he said a study from Stanford University showed that the total amount of lead in 750 solar panels would be equal to that of a 21-pound light duty automobile battery.

Another concern raised was that of electro-magnetic fields once a solar farm is in operation.

“The highest point of acceptable frequency is 100,000 hertz,” Romich said. “With the inverters in place at these solar farms, which in reality is an electrical generation plant, it tops out at 60 hertz.”

To dispel concerns over radiation, he said that a person standing outside the fenced perimeter of a solar farm would receive less radiation than one would get using their microwave oven or electric range at home.

Peggy Kirk Hall is an agriculture law specialist with the OSU Extension Agricultural and Resource Law Program.She went into great detail about things to look for, and language to put in place when negotiating a lease with a developer.

The farmland owner’s 15-point solar leasing checklist includes:

• Read the 45-page of the Farmland Owner’s Guide to Solar Leasing, available for download at www.farmoffice.osu.edu.

• Assemble your own team of experts before you make what could be the most important decision of your life. Hall noted that leasing agreements can have a lifetime of 40 years in some cases.

• Research the solar energy developer. Kirk poinoted out that it’s always good business to know who you’re dealing with.

• Talk with family members since, as earlier noted, a solar lease will take land out of production for a long period of time.

• Seek out Extension Service experts. Hall recommended going to OSU’s Extension Energize Ohio website at https://go.osu.edu/utility_solar.

• Read all documents carefully and with professional assistance. The documents, once signed, are legally binding.

• Consider the terms of the solar lease, noting anything that isn’t fully understood or questionable.

• Meet with the solar energy developer. Treat the transaction with the same diligence one would employ if conducting a real estate transaction where you would walk the property lines with the owner.

• Review the lease terms with your attorney. This will insure a clear understanding of the lease.

• Talk with your accountant, CPA and/or financial planner. In particular, examine the tax consequences of signing the lease. For example, Hall’s presentation showed that a 200-acre farm leased to a developer could realize nearly $6 million in revenue over a 40-year term, when considering median acreage payments during the development, active generation and end stage clean-up phases.

• Consult with your insurance provider, since leases almost always include provisions about how much liability insurance each party must carry.

• Include your neighbors in the conversation, since they will be impacted by both construction and the long-term existence of what amounts to an electrical generating station.

• Review the survey/aerial maps provided by the developer or its surveyor to get an accurate understanding of the land affected by the lease.

• Ensure that you have good title, since developers prefer to lease property that is free and clear of third party burdens.

• Check and double-check the final documents, because once signed, it becomes legal and binding.

Hall said that in her “nine initial considerations” checklist, it was the eighth-point — the one involving family and friends — that seemed to cause the most consternation.

“We’ve had meetings where some frustrated community residents have shown up because they don’t want to see this kind of land use occurring,” she said. “And what most people don’t realize is that under Ohio law, this type of an energy development is considered a public utility and can’t be prohibited by zoning.”

Another hot topic is the property owner who, for whatever reason, didn’t lease their property and fears being surrounded by acres of gleaming blue solar panels.

“At this point we really don’t know how that will affect property values,” Hall said. “We don’t have any of these large scale facilities in use yet, and though values should be fine when coming out of the lease, during construction and then in the generation phase we really don’t have an answer as to how it will affect property values.”

She said it is a legitimate concern and is fast becoming one that lenders have started to raise as well.

Kenneth Bohl, a trustee for Clay Township in southern Highland County, admitted you can’t stop progress, and said he’s witnessing it in his little corner of the world.

“I’m concerned about it because they’re putting it in on North Gath Road,” he said. “And if it goes through, it’s getting close to home.”

Reach Tim Colliver at 937-402-2571.

Attorney Peggy Kirk Hall with the OSU Extension Agricultural & Resourse Law Program points out nine things to consider before entering into a lease agreement with a solar energy development firm.
https://www.timesgazette.com/wp-content/uploads/sites/33/2020/02/web1_Hall.jpgAttorney Peggy Kirk Hall with the OSU Extension Agricultural & Resourse Law Program points out nine things to consider before entering into a lease agreement with a solar energy development firm. Tim Colliver | The Times-Gazette

OSU Extension Field Specialis Eric Romich talks during Tuesday’s “Solar Leasing 101” seminar.
https://www.timesgazette.com/wp-content/uploads/sites/33/2020/02/web1_Romich.jpgOSU Extension Field Specialis Eric Romich talks during Tuesday’s “Solar Leasing 101” seminar. Tim Colliver | The Times-Gazette
OSU Extension hosts seminar detailing the process

By Tim Colliver


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