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JenREES 3/6/22

Estate Planning Workshop: A reminder of the estate planning workshop to be held on March 8th from 1:30-4 p.m. at Harvest Hall at the Seward Co. Fairgrounds (location changed). Even if you haven’t RSVP, feel free to still attend if you’re interested.

Seward County Ag Banquet: The 54th Annual Kiwanis Club of Seward Ag Recognition Banquet will be held on Monday, March 21 at the Seward County Fairgrounds. A social with wine, cheese, and sausage will be at 5:30 p.m. with prime rib dinner at 6:30 p.m. To reserve seats, call Shelly at 402-643-3636.

Proposed York Co. Solar Farm: I’m grateful for the public informational meeting in McCool Junction that was held by EDF Renewables in February. It’s important that people can gather and share. I’ve been asked about Extension’s role; it’s to listen, provide educational resources, and share perspectives regarding concerns and considerations. Thus, my focus of this week’s article in regards to some perspectives and considerations in relation to contracts. I plan to share on vegetative management and potential economics next week with my colleague, John Hay, Extension Energy Educator.

The big-picture difficulty about solar and wind energy in rural America is the fact that this is ultimately a land-use conflict. It’s a conflict between land used by those who make their livelihoods from farming/grazing/haying the land and land used by those who are looking at a future of renewable energy. The conflict also involves the changing landscape. With wind, the large turbines and blinking lights can be seen from a distance in addition to seen/heard by those living around them. On the land use side, 1-2 acres of land per turbine and access road is removed allowing the remaining land to be farmed. With utility scale solar, it’s not vertically visual from a distance, but changes the landscape for those who live around it. On the land use side, for a proposed 5000 acre utility scale solar farm such as this York Co. one, all 5000 acres would be taken out of typical farming production. The challenge with land-use conflicts is determining if the varying viewpoints can come together in some way or not as families, neighbors, and communities are all impacted.

As I’ve listened, the discussion isn’t so much about solar in general, but the size/scope of this proposed project and potential impacts locally. For perspective, the solar farm on the north side of the interstate west of Lincoln is 30 acres. It is a single-axis system, meaning the panels rotate as the sun changes direction during the day, similar in concept to what is proposed. The display board images at the informational meeting showed fixed axis systems not representative of what is being proposed.

Contracts: Some have chosen to sign contracts as it provided a consistent payment, provided a way to keep land in a family when there isn’t an heir to work the land, or for other personal reasons. Some have chosen not to sign because the land is their livelihood, they’re concerned about the future impacts to other aspects of the ag and local economies, or for other personal reasons. It’s important to remember there’s not necessarily a right or wrong for ‘why or why not’ regarding signing contracts, and the ‘why’ for each is based on individual/family goals and values. However, there definitely are things that need to be considered prior to signing these long-term contracts in order to ensure a fair contract and protection for the landowner.

First, for those on the fence, while you most likely feel pressure from both sides, your decision needs to be based on what aligns with your goals and values. Take the time to review and negotiate these contracts and always know that saying “no” is an option. We recommend you have an attorney who specializes in wind/solar energy review the contact. Extension has recommendations from who we’ve worked with if you’re interested. Specifically, these contracts need to include: liability, indemnification (should be insured under the company), list a maximum percent drop of acres, decommissioning, and consider adding “most favored nation” to contracts to allow for the best payment and terms. There’s vegetative management things I’ll cover next week. A group of landowners can work together with an attorney to negotiate the best contract with a company; for example, landowners within the Saline Co. windfarm did this.

Resources: This resource contains a checklist of items for contracts to discuss with the company and an attorney: https://farmoffice.osu.edu/sites/aglaw/files/site-library/Farmland_Owner%27s_Guide_to_Solar_Leasing.pdf. John Hay’s website contains more information on solar lease considerations for landowners: https://go.unl.edu/2xch. The following resource is a webinar recording on land use conflicts-wind/solar: https://uada.hosted.panopto.com/Panopto/Pages/Viewer.aspx?id=b2d87be8-6d94-48e3-a8c7-ae220131e443.




Considerations for Leasing Land for Solar Development

Leasing land for solar development is a topic landowners in the McCool Junction and Lushton area are facing. This is a guest column by my colleague John Hay, Nebraska Extension Energy Educator.

Renewable energy has increased significantly in recent years and the number of wind farms and size of wind turbines are a visual reminder of renewable development.  Due to higher development cost, solar electric systems, also called solar photovoltaic (PV), have lagged in commercial electric development. In recent years, the dramatic price decline of solar PV has led to greater interest in utility scale solar development.  For instance, consider a 5-Megawatt system similar to the one constructed West of Lincoln North of I-80. Based on solar cost benchmarks published by the National Renewable Energy Lab, a 5-Megawatt system constructed in 2010 would have cost $27.6 million dollars, compared to $5.65 million dollars to construct the same size project in 2018.  Combine this with the 26% federal tax credit and the economics of utility scale solar are sufficient for major development interest across the nation. The federal tax credit is currently 26% and set to decline to 22% in 2021, then 10% for future years.

Utility scale solar farms are constructed on open ground generally near access to the electric transmission grid.  Other considerations for siting solar farms may be the solar resource, proximity to electricity demand, other local incentives, and regional value of electricity. Access to land is an early step in utility scale solar development.  Farmers and landowners in Nebraska are being approached to lease land for solar development and these landowners are facing important long-term decisions about the future of their land.  When considering a solar leasing contract many factors should be considered.  According to the Farmland Owner’s Guide to Solar Leasing published by the National Agricultural Law Center these considers are: Length of the commitment, Who has legal interests in the land?, Impacts on the farm and land, Family matters, Property taxes, Government programs, Liability and insurance, and Neighbor and community relations. 

Utility solar farmland leases are long term contracts and need to be reviewed by a qualified attorney.  In Nebraska these leases can be as many as 40 years and longer if extended. For many landowners this long-term contract may extend into the next generation and should be discussed with family.  Landowners at times feel pressure to sign contracts and this can be stressful. Take the time to review and negotiate these contracts and always know that saying “no” is an option. 

Solar leases can be attractive to landowners as they can offer long term income and profitability on the leased land.  A study in Michigan of landowners with wind farm leases showed farmers with leases invested more in their farms than farmers without leases. This suggest the lease income may influence farm stability and longevity.  Solar farms like wind farms add to county tax income. These developments are exempt from property tax and instead have a nameplate capacity tax paid each year in place of the property tax. 

Utility scale solar farms are unlike wind farms in some ways.  For example, wind turbines may take only 1-2 acres out of production per turbine because farmers can farm around the base of the turbine and turbine access road.  In comparison, a 1,000 acre solar farm will take all 1,000 acres out of production.  Solar farms are low to the ground and have less impact on the skyline. Generally solar farms will be fenced with vegetation growing amongst the solar panels.  Vegetation could be perennial pollinators, grass, or weeds. Common management is periodic mowing to ensure plants do not disrupt solar operation and production. 

Landowners approached about solar leases should seek advice from an attorney and take time to thoroughly consider the contract and its implications to their farmland.  Review of the Farmland Owner’s Guide to Solar Leasing published by the National Agricultural Law Center will help frame the issues and considerations for solar leases. This can be found at: https://farmoffice.osu.edu/sites/aglaw/files/site-library/Farmland_Owner’s_Guide_to_Solar_Leasing.pdf. For additional questions about solar leasing, please see https://cropwatch.unl.edu/bioenergy/utility-scale-solar, or contact John Hay, Extension Educator at 402-472-0408 or jhay2@unl.edu.

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