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Renewable Land > Blog > Renewable Land > Should I lease my property to a wind farm?

Should I lease my property to a wind farm?

Wind farms have different real estate needs than solar farms in that they are much less land intensive. A typical solar farm will cover an entire property in solar panels, leaving little other use for the land. However, wind turbines need to be spaced out to minimize turbulence. This can be a win-win for landowners. By leasing your property to a wind farm, you get an additional income source and because wind turbines take up a relatively small area, you can continue to farm the surrounding land.

If you are currently farming your land, you’ll want to calculate how much land will be taken out of production for the wind turbine. The wind farm operator will need access to their turbine, so don’t forget to factor their access route into your calculations.

The biggest complaint we hear from landowners is that their property was disturbed more than expected during the construction of the wind farm. Turbines are very cumbersome and it requires large areas to move and install them. There will also be transmission infrastructure installed to connect the turbines and move the power. Make sure to ask questions and that you understand how your property may be impacted during construction of the wind farm.

Wind production varies much more than solar from year-to-year. As a result, most wind leases have a royalty component, rather than being 100% fixed rent. The typical wind lease will have a base rent component that is paid up front on an annual or quarterly basis, and royalty true-up at the end of the year. This royalty will likely vary greatly from year-to-year (often +/- 20%). Royalties can be based on the production of the turbine(s) on your property or on the entire wind farm. It is not uncommon for wind turbines to go offline for repairs, so you may want to ask for your royalty to be calculated off the production of the entire wind farm. This diversification should reduce the volatility of your royalty payment.

As with rent, royalty percentages are negotiable and it’s very common for the percentage to increase over time. An increasing royalty percentage will also offset potentially lower project revenues down the road once the power purchase agreement (PPA) expires. Many expect that projects will have to sell their power into the merchant market after current PPAs expire and that merchant pricing will be lower.

Renewable Land is a leader in acquiring wind and solar leases. Please call us today if you are interested in receiving a free valuation of your lease or have other questions.

1 comment

  1. My wife and I would be interested in purchasing land with the intention to build a home and lease land for wind turbines. We are interested in the Cheyenne Wyoming area. Currently we are located in Maine however with a major part of family here in Wyoming, we are considering a move. Regardless we would like to buy land for the express purpose of leasing for wind turbines. What details, options would you recommend we consider?

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