Should we lease land for a solar farm?
August 14, 2011 6:40 PM   Subscribe

Should we lease our land to a solar energy company? We were approached by a solar energy company that wants to lease 5 acres of our family (3 generations) land in Ontario, Canada for solar collectors. We are having some lawyers and other folks make recommendations and look over contracts, etc. What sort of things might we be missing? Will our neighbors hate us? In 10 years, what will make us say, "didn't see that coming?"
posted by I'm Doing the Dishes to Society & Culture (16 answers total) 4 users marked this as a favorite
Best answer: What is the background of the lawyers who are reviewing the contracts that the solar power company has shown you?

How permanent are the structures? Can they be easily removed if you decide not to renew the contract with the company? Do you have an option not to renew?

How long is the duration of the contract?

What is the formula for determining payments?

Can you (or your representative) audit the company's books in order that you can assured you're being paid properly?

What are the potential liabilities to you if trespassers or company workers injure themselves on your property?

posted by dfriedman at 6:46 PM on August 14, 2011 [2 favorites]

If this company goes bankrupt (are solar collectors economical in Ontario?) what happens to all the equipment sitting idle on your land?
posted by blargerz at 6:53 PM on August 14, 2011 [1 favorite]

Will they give you power as part of the contract?
posted by serazin at 7:03 PM on August 14, 2011 [2 favorites]

How will the power be transmitted from the solar array onto the grid? Will that require the placement of towers across the rest of your land? What sort of access for construction will be required? Will they repair all damage that might be caused during construction?
posted by Thorzdad at 7:12 PM on August 14, 2011 [1 favorite]

What kind of maintenance, will have to happen; who will be responsible; and are you okay with the plan for doing it (e.g., will the weed control be via some sort of herbicide that you don't want used on your land)?
posted by salvia at 7:19 PM on August 14, 2011

Oops! extra commas!
posted by salvia at 7:20 PM on August 14, 2011

I would look very carefully at the payment terms and make sure you understand them completely -- what rate you are paid, and how it can or might change. Ask how this happened and how assured you are that it won't happen again (and you can also look up the issues Mexican farmers faced with when leasing for wind energy). Energy companies have huge staffs of lawyers -- you need one that can explain everything to you, several times need be, until you understand every bit of it.
posted by Houstonian at 7:22 PM on August 14, 2011

Best answer:
are solar collectors economical in Ontario
They are; part of the problem with photovoltaic arrays is that their efficiency and output is reduced due to high temperatures. That's why a lot of the arrays in Arizona and other southlands have focused on solar thermal generation instead of solar photovoltaic generation.

Questions I'd ask:
- Are they binding any resource rights on your property to air, water, or sunlight? Are they siting things in an area where normal tree growth will not interfere with the array? Can they require you to make changes to your property (e.g. to cut down the tree that your favorite dog is buried under because in the last twenty years it started to shade the array between 3:00 and 3:15pm)?
- How often will they need to access the arrays for maintenance? Is there a seasonal change in times they will need to be accessing the arrays?
- What use are they making out of existing utility easements?
- Who bears liability for things like fires that could start on the property due to a mishap with inverters or other electrical transmission equipment?
posted by SpecialK at 7:23 PM on August 14, 2011 [2 favorites]

Will the payment scheme include annual increases to account for inflation? A fixed percentage, or indexed to CPI?

If the lease is terminated, does the lease require them to remove the equipment and restore the land to its original condition (remove concrete fixings and contaminated soil, replant trees...etc.)?. Is there a time frame for that? Is there a deposit or bond for the rectification that will cover the rectification if they fail to do it?

Liability, liability, liability. They should bear it, you shouldn't. You need to make sure that you are protected from their misdeeds. Does the lease require them to have certain insurances? Worker's comp., public liability... etc.?

Who is paying for your lawyer? This varies from jurisdiction to jurisdiction, but here in OZ, the lessee pays for the legal expenses of the lessor relating to the lease.
posted by His thoughts were red thoughts at 7:37 PM on August 14, 2011 [1 favorite]

They'll want access to the equipment --- do they plan to build a road and/or use an existing family driveway? How often will they need to access it, and when --- on a daily/weekly/whatever schedule, and with what type of vehicles? If they use an existing driveway, will they be maintaining it? Do they want to build sheds and garages for extra equipment and vehicles?

Since this is family land, is there any family residing on the rest of it? How close? Would the solar equipment be visible from anyone's homes? Any noise or nighttime light concerns?

How long is the lease? What are the provisions (on both sides!) for early cancellation, how much notice does either side have to give of a cancellation, and what happens to their equipment when the contract ends, whether by cancellation or nonrenewal? How about security and insurance?

How much damage will they do to the property: what kind of foundations will be dug, what kind of power lines will be run and where, what about leveling any land or tree cutting, and will they return the property to it's original state afterwards?
posted by easily confused at 8:20 PM on August 14, 2011 [1 favorite]

Failure to negotiate RoW and access roads for a series of gas wells royally fucked over the rancher for whom I worked. Although the company paid him for every hectare and portion thereof they officially used, the roads and pipe carved up some prime graze land and caused us no end of headache for cattle moves. Take that as you will.
posted by Sternmeyer at 9:48 PM on August 14, 2011 [1 favorite]

Something else to consider: in all likelihood, once the solar collectors are in the company will probably want to remain there in perpetuity, which means that this is not some sort of 'just ten years' or whatever contract. If you do this, expect that land and access areas to be unusable to your family pretty much forever, just as if you'd sold it.
posted by easily confused at 4:33 AM on August 15, 2011

Best answer: Here in Texas we've got some pretty specific rules concerning mineral rights. And while you're talking about putting something ON the land, that doesn't negate the fact that your rights to the property (currently) extend to what is below the surface upon which these generators will sit. Before agreeing to encumber the surface of your property with a long-term arrangement, please take some time to understand what your rights are with respect to the minerals/water/etc under the surface of your property. What if you discover that you're sitting on a huge deposit of Unobtainium, which is directly below where all this stuff is located. What will it cost you to get it if you have to remove all the stuff on the surface? Is that your responsibility? Is that theirs? Must they leave a reasonable percentage of the area unobstructed to permit such subterranean activities?
posted by jph at 8:33 AM on August 15, 2011

while you're talking about putting something ON the land, that doesn't negate the fact that your rights to the property (currently) extend to what is below the surface upon which these generators will sit

As a property owner you have no rights to minerals in Canada.

Each province officially holds the rights to all minerals, and doles these out to paying individuals/companies regardless of the surface property owners. In most provinces anyone exploring for minerals must get permission from the surface owner prior to entering their private property. If you strike gold on your property, you have no right to that deposit until you purchase the mineral claim from the government. If someone owns the mineral claims to your land, it is illegal for you to prevent them from entering it to explore or stake claims.

Use the OGS's CLAIMaps app to see if anyone owns the mineral rights to your property. It will show up as a green polygon. The green C tool on the side will identify that claim with a number and a link to more information at the bottom of the map.
posted by t_dubs at 10:42 AM on August 15, 2011

Err, link for CLAIMaps
posted by t_dubs at 10:43 AM on August 15, 2011

One thing that may affect your calculations is the delay that Ontario Hydro has with new project approvals. I'd be careful that hook-up delays aren't going to cause kinks in your plans, financial or otherwise.
posted by bonehead at 8:43 AM on August 16, 2011

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