Leasing Land for Wind Energy Production

Farmers and landowners generally focus on the land beneath their feet. However, with the increasing amount of wind energy development across the Midwest, many are starting to look at the wind above their heads. There are several wind energy farms across Nebraska and they continue to expand in may rural areas. While increasing alternative energy source options is a good goal, farmers and landowners must exercise caution before entering into any lease agreement should a wind farm company approach them about constructing a wind tower on their land.

Before leasing land for wind production, it is of critical importance for a landowner to seek sound legal counsel, preferably with an attorney well acquainted with these types of contracts. Obviously, the contract initially presented is often streamlined so that the project may move forward quickly. Landowners are told that the contract presented is standard and the same as all other wind tower contracts. However, each parcel of land, and each landowner, has a unique set of characteristics and circumstances. It cannot be overstated that each provision is, in fact, negotiable. Once signed, each party has a legal obligation to uphold their part of the contract; as such, it is crucial to make changes before signing the contract.

According to North Dakota State University Extension Farm Manager Specialists Dwight Aakre and Ron Haugen, these are the questions you should ask before signing the dotted line:

How much of my land will be tied up and for how long?

How much will I be paid and how will I receive payments?

Are the proposed payments adequate now and will they be adequate in the future?

Have all liability issues been considered?

Have I considered all contract specifications?

Are there any other considerations?

Under each of these questions is an array of more specific considerations. For instance, what is the duration of the contract? Who is responsible for the access roads, both during construction and maintenance? What about inflation? Will the placement of a wind tower incur more taxes for the landowner? Who is responsible for liability should a problem arise?

Additionally, for farmers, the presence of wind towers on or near their land could affect farming practices due to new maintenance roads, less ability to receive aerial spraying, improvement restrictions, and construction phase damage such as soil compaction.

While these factors, as well as the lure of additional income, are the top concerns of landowners when first approached about wind energy opportunities on their land, there are other very important factors to take into account. Some landowners site noise issues, visual pollution, shadow flicker, and electromagnetic fields that cause interference with electrical devices.

The demand for renewable energy sources is high and wind farms are providing needed economic development in rural areas, so wind energy corporations will continue looking at prime Nebraska real estate to feed the nation’s energy needs. Landowners need to be ready to make leasing decisions that work for them. If you have concerns about leasing decisions for your land, contact UFARM—to lend you a hand.

Source consulted: Aakre, Dwight, and Ron Haugen. “Wind Turbine Lease Considerations for Landowners.” North Dakota State University Agriculture. NDSU. Feb. 2009. Web. 15 Sep. 2014.