Signing a Wind Energy Lease: The most steady and predictable source of income is to lease your land for wind power farming. However, leasing farmland is not relatively easy; you have to go through complex legal procedures and deal with financial issues, which can also affect your right to property in the future. Thus, it is always important to ask these four questions before you sign up for a wind energy lease.
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How much land access is required?
Usually, a wind farm requires 60 acres of land per megawatt, which is ideal for a commercial wind project. However, only 3% of that area is used for installing the turbine, substation, or access to the road. The rest acts as a buffer land for maintaining a steady wind flow. Thus, you must go through the wind lease agreement or talk to a wind land agent to understand your right to use the buffer land for farming, grazing, or developing any subsurface mineral or other purpose.
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Will the wind energy lease affect farming operations?
A wind project can significantly damage farming operations and production. Also, the access to roads can change the configuration of the field and row orientation and make specific fragments of land inaccessible due to the placement of large equipment in the field. The drainage pattern is also altered, and the grazing land might also change. So, it would help if you get compensation for all these changes, which should be mentioned in your lease agreement.
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What are the obligations that come under the lease agreement?Â
Even if you own the land, you will be prohibited from constructing anything that can obstruct the flow of the wind. Also, there are restrictions on building structures, such as grain bins, cell towers, or even houses or trees. In some instances, according to the agreements, you might have to get permission from the wind company while trying to improve the property. You must speak to the wind company regarding drainage upgrades, as wind farms also include underground power lines. If any kind of damage occurs due to vehicular accident, fire, or mishap, then it won’t be covered by your personal and firm liability policy. So, you must avoid the wind power structure and buy additional insurance to meet the indemnification obligation.
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How is the compensation made?
Lease payments are structured in three ways – First, payment is based on the tower or megawatt capacity; Second, a loyalty payment is based on the gross revenue, and some may also include a combination of both these payment types. After the payment negotiation based on the gross revenue court, turbines 1.5 to 3 megawatts get an annual royalty of $5,000 to $8,000. Wind farm policies usually vary from one company to another. It would help if you were transparent about the sale of electricity, its revenues, and whether they are taxable.
Summing it up
Usually, a wind power agreement is signed for 50 years. The developer must get time to earn a massive return after making an upfront investment in building the farm. The initial lease term is 25 years, which is the expected lifespan of a turbine. The tenant has the exclusive right to renew the contract for another 25 years. To get detailed information, you can click on Inthequeuellc.com.
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