Solar Farm

3,975 Views | 17 Replies | Last: 3 yr ago by fightingfarmer09
Ag92NGranbury
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8:19a, 8/30/22
AG
We have a solar farm going into the area near of one of our properties. The farm will be about 1.2 gigawatts.

Several of the neighbors to the property have leased land to the solar company. We have no intention on putting solar panels on our property, but the company has reached out to us to potentially sell land to them that we own that is under some high wires where they would to tie into the grid. The land is pretty useless due to the right-of-way of the lines.

Anyone with solar field experience know what the going rate is for approx 30-40 acres?
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Comeby!
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9:33a, 8/30/22
AG
All I know is that if your land is the grid tie in, it's especially important to them. You just need to find out where else they could tie in: ie what other options do they have?
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agnerd
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11:21a, 8/30/22
AG
Further, I believe the utility can use eminent domain to make a connection, so the goal is to ask a little more than what it's worth, but not too much that its worth going through the courts to take it. Find an experienced lawyer in the area that will sell you a couple hours of his time to advise you on a price to ask.

Also, if they're asking to buy the whole thing and not just for an easement to connect, they are either planning to put more panels or a substation on your land.
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Ag92NGranbury
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In reply to agnerd • 1:07p, 8/30/22
AG
agnerd said:
Further, I believe the utility can use eminent domain to make a connection, so the goal is to ask a little more than what it's worth, but not too much that its worth going through the courts to take it. Find an experienced lawyer in the area that will sell you a couple hours of his time to advise you on a price to ask.

Also, if they're asking to buy the whole thing and not just for an easement to connect, they are either planning to put more panels or a substation on your land.
It will include a substation. They don't have many other options from what I can tell to tie in.
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htownag2007
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1:10p, 8/30/22
AG
Would you mind mentioning what county you are in? Potentially going to be going through something similar in Milam County soon.
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OnlyForNow
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1:19p, 8/30/22
AG
The use of ED to tie into the "grid" can be their strong hand.

I'd go back to them with an open mind, explaining your position and your understanding of their position.

I'd request a lease and not a sale of land. You'll make more in the end, and still "retain" ownership. The provisions for the lease, will be to return the substation site and tie-in location to prior converted "ag land" or whatever it is now.
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Kurt Gowdy
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1:22p, 8/30/22
AG
I'm dealing with this on two separate different properties.

What you can sell this for is dependent on what the market value is for land in your area. Generally speaking, in my area, we're seeing substation prices go for roughly 4-5x market value. I'm not sure in a higher price per acre area if that would hold true but it seems to be that way for us in the lower price per acre areas.

I'd make sure you sell as much of it as you can and make sure that the shape of the property they're asking to buy doesn't leave you shaped with something undesirable; I always try to get them to square me up as best as possible.

Lastly, look into tax deferring this income via 1031 while the democrats still let you.
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tlh3842
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6:40p, 8/30/22
AG
Assuminf it's a "solar company" and not a PUC regulated transmission utility, they can't use eminent domain for that. However if their story is true about wanting it to be used as a line tap to connect to the grid, it does mean it's more valuable to them for sure. A key question would be whether the transmission owner or the solar company wants it there. If you get an answer that it's the former, that's helpful and means the solar company will pay more. If the latter, not as helpful but it would be good to understand how far your spot is from the potential solar panels. The closer the better and gives you more leverage.

Good luck
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mm98
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9:54a, 8/31/22
AG
My close friend has a deer lease in the Needville area. The property owner has another field across from the deer lease that I recall is roughly 900 acres. His solar deal was negotiated about 3 years ago and it was a 20yr terms for about 600K per year, with an small annual escalation every year of the term. The solar company tried to buy the land outright but he didn't budge, so this doesnt entire answer your question but maybe gives you an estimate of the alternative.

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Bob Knights Liver
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10:05a, 8/31/22
A long-term lease of that property sounds good. If you could lease them the surface rights only for a long period (25+ years) for the going per acre rate of buying it, that sounds like a long-term win. You retain mineral rights, profit off of land you can't currently use, and have more to give to future generations or to charity when you're gone.
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OnlyForNow
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In reply to Bob Knights Liver • 11:03a, 8/31/22
AG
Bob Knights Liver said:
A long-term lease of that property sounds good. If you could lease them the surface rights only for a long period (25+ years) for the going per acre rate of buying it, that sounds like a long-term win. You retain mineral rights, profit off of land you can't currently use, and have more to give to future generations or to charity when you're gone.
This typically works out in everyone's favor.

The solar/utility company doesn't have to deal with ownership and access easement(s); and you get a nice check for leasing off mostly worthless property.

Hell, you could be proactive and have your attorney draw up a lease agreement with cost and send it to them,

Depending on what area you're in, I'm sure someone here knows a land attorney that has dealt with this and knows going rates.
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Bob Knights Liver
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In reply to OnlyForNow • 11:49a, 8/31/22
Of course if you do this, you have to keep taxes in mind. Can you still keep it Ag use while you lease it? Also will they do an upfront lease payment for the whole period (they could get a loan just as if they purchased it) instead of giving you regular payments?
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rlb28
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11:59a, 8/31/22
AG
Land we hunt on in Matagorda County is in talks about solar farm.
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OnlyForNow
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In reply to Bob Knights Liver • 3:39p, 8/31/22
AG
Only the portion that is used as commercial would be taken out of Ag. And I assume they'd pay you the difference via negotiations.

Other than that you're beyond my simplistic knowledge of this.
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Bob Knights Liver
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In reply to OnlyForNow • 4:24p, 8/31/22
Right, just something to keep in mind if you lease. At annual property tax level of 2.5% to 3% of value, you'd pay back the entire lease value in 30-40 years or less, depending on land value movement. You would want to have that in mind if you are leasing. Another item to offer up is to give them an option to continue renewing the lease annually for up to x additional years at a price based on the greater of the annualized initial lease price or y percentage of the average value based on acreage sales in the county.
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Ag92NGranbury
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7:09p, 8/31/22
AG
Thanks for all the advice. We do have a lawyer engaged, but I was hoping to find anyone with prior experience. Trying to avoid some of the things that weren't fun to negotiate during the Barnett Shale craziness and to get good value for the property. Appreciate it.
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JSKolache
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In reply to mm98 • 11:08a, 9/1/22
AG
mm98 said:
My close friend has a deer lease in the Needville area. The property owner has another field across from the deer lease that I recall is roughly 900 acres. His solar deal was negotiated about 3 years ago and it was a 20yr terms for about 600K per year, with an small annual escalation every year of the term. The solar company tried to buy the land outright but he didn't budge, so this doesnt entire answer your question but maybe gives you an estimate of the alternative.

It's going nuts down there. I swear every former rice field from Needville to the coast will be solar farms in 10yrs.
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fightingfarmer09
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In reply to JSKolache • 2:05p, 9/3/22
JSKolache said:
mm98 said:
My close friend has a deer lease in the Needville area. The property owner has another field across from the deer lease that I recall is roughly 900 acres. His solar deal was negotiated about 3 years ago and it was a 20yr terms for about 600K per year, with an small annual escalation every year of the term. The solar company tried to buy the land outright but he didn't budge, so this doesnt entire answer your question but maybe gives you an estimate of the alternative.

It's going nuts down there. I swear every former rice field from Needville to the coast will be solar farms in 10yrs.


Then a weedy over grown landfill of solar panels in 20 years.
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