Agricultural Solar Leases

To first understand what a solar lease is, it is important to understand what a solar farm is. A solar farm is a large-scale solar photovoltaic project which first generates energy and then sends that energy for distribution. A solar farm can help power a residential community and it can also be used on a utility-scale basis to provide energy for an entire community or region. As renewable energy becomes more popular every year, developers are looking for more land that would be suitable for large-scale solar projects.

A solar land lease is an agreement usually between a developer (often a private company) and large-scale agricultural landowners. The agreement is usually for a long period of time, 25 years or more. While exact terms can vary, payments are made to the landowner on an annual per-acre basis, and the payment rate is finalized in a contract between the developer and the landowner.

Large-scale agricultural landowners are becoming more aware of the opportunities and benefits that can be obtained while negotiating a deal with a solar project developer. Some of those benefits include:

• a source of passive income,
• the advancement of more sustainable farming practices, and
• lower energy costs overall.

Indiana is ranked 21^st in the country for development and activity of solar farms, as of October 2023. But within the next 5 years Indiana is expected to launch in to the top 5 due to future solar development. In fact, development of those projects has begun. The Mammoth Solar Project, currently underway, is anticipated to generate 1.3 GW of energy. This will power approximately 270,000 households annually and its footprint will be 13,000 acres. Mammoth North, phase 1 of the three-phase project, is expected to be operational in 2024. It alone spans 4,500 acres and generates 400 MW of energy. The opportunities for landowners to get involved in solar developments is surging in Indiana and solar developers are continuing to make offers to develop these solar farms.

If a landowner pursues solar development of their property, they need to expect a long-term commitment. This can make some landowners uneasy, but it is a way for landowners to maintain long-term financial stability for future generations. Additionally, the Inflation Reduction Act was a bill passed in 2022, and became effective in 2023, which provides incentives to reduce renewable energy costs for organizations. In Indiana, solar energy is eligible for a tax credit.

From development planning to contract negotiation, it is important to work with experienced attorneys regarding your interest in a large-scale solar project. Attorneys at McNeelyLaw have ample experience, having completed over 30,000 acres of deals. Contact the attorneys of McNeelyLaw to discuss your Indiana solar lease or project today.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.