by Gene Wasson
Several solar farms have been built in Mississippi, and several solar companies are in Mississippi contacting landowners now to lease land for many more solar farms.
Existing solar farms are scattered across Mississippi in locations such as Hattiesburg, Sumrall, Ruleville, Jackson and Louisville and on lands ranging from Delta cropland to pastureland and gently rolling forested lands in other areas.
Many additional solar farms are in the planning or leasing stages. Solar companies are busy contacting landowners across Mississippi about leasing land, particularly lands located near high voltage transmission lines, electric substations and highways.
If you are a landowner who has been contacted about leasing your land for a solar farm, the revenue can be enticing. Typically, solar leases involve a three to five year option period and, if the company exercises its option, a potential 25 to 50 year lease term. During the option period, the solar company pays a small amount per acre per year (typically, $30/acre or more) while it studies the suitability of the property for a solar farm and while the solar company seeks to obtain power purchase agreements with buyers of the electricity and an interconnection agreement with a local utility to transmit the electricity from the solar farm.
If the solar company exercises the option, the landowner would grant a lease to the solar company at a rent of several hundred dollars per acre. The solar company would construct a solar farm of up to several hundred acres that might be located on one or several properties and then commence operation of the solar farm to generate electricity for many years.
Due to the option period and the length of any resulting solar lease, there are many issues for a landowner to consider when negotiating a solar lease, such as the landowner’s use of and access to the property not occupied by the solar farm, insurance against liability if someone is hurt on the solar farm, removal of the solar farm when the lease ends, etc.
Our experience with several solar farms to date is that each situation presents many similar issues but also issues unique to that particular land and landowner including price, risk tolerance and protection of that particular land and land owner.
Gene Wasson has been practicing energy, environmental and real estate law in Mississippi for over thirty years.