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Be wary of solar farm leases

January 27, 2016

The solar revolution has arrived in Sullivan County in a blizzard of paper. In recent weeks thousands of Sullivan County landowners have received solicitations from a company called Cypress Creek, which is seeking to lease land for solar farms. Some landowners contacted the company and received boilerplate leases that offer $1,000 an acre a year for leased land. On the face of it, this might sound like a good deal—but in this instance, the devil is truly in the details.

First, as soon as the property owner signs a lease, he or she is legally bound to honor the terms and conditions of the contract, although the leasing company is not under the same obligation. The company may be able to tie up a very large parcel of land for two years by paying just a couple of thousand dollars, and then walk away from the deal entirely. It can retain its rights to the property for more than 40 years, or break the lease at any time.

If the leasing company does decide to build a solar farm, it may decide that it only needs around 10 acres of a much larger parcel, and in that case it will only pay rent on the acreage it actually uses. And the company has the sole discretion to decide where it wants to site the solar installation. It even has the right to remove sheds, barns or silos to make way for its solar panels. Adjoining parcels of land that are not under contract to the solar company can also be subjected to unspecified easements that might render them unsalable.

To top it off, tax increases due to the loss of agricultural or forestry exemptions, or to higher assessments based on the value of the solar farm, could eat up whatever income the property owner receives from the lease.

Anyone who is interested in leasing should first go to the Cornell Cooperative Extension website and listen to the presentation by attorney Steve Mogel, Ed Homenick from Real Property Tax Services, and Carol Roig and Stephen Stuart from the Sullivan Alliance for Sustainable Development (SASD). After that, if you’re still interested in leasing, hire a good lawyer.
Cypress Creek is not the only game in town. At least two other solar companies have their eyes on Sullivan County and, before long, landowners may be in the enviable position of having multiple companies competing for leasing rights. Solar development can benefit Sullivan County, but it has to be done right—and that means, among other things, it’s got to be a good deal for the folks who lease their land.

[Bruce Ferguson is a resident of Callicoon Center, NY.]