Important things to consider when leasing your land to a developer:
- Know your wind resources to make sure that you know the value of what you have to avoid being taken advantage of.
- Consult with legal professionals who have experience with the wind industry and wind development to ensure fair treatment of the landowner and their rights.
- Consult your neighbors- if a developer is approaching you, then they are likely also approaching your neighbors. Consult with them and compare the terms of their agreements to your own to ensure that there is balanced equity. This can also be beneficial come negotiation time, as you will know what others have gotten for their land.
Choosing a Developer
Make a developer evaluation checklist for example:
- Does the project have a single project manager or multiple managers, and can they be contacted?
- Is the developer well known/do they have an excellent track record?
- What is their operations history, are they established, or are they a new developer?
- Number of current projects operating
- Do they work on a priority ranking system (how long before work will begin, or problems are addressed)?
- Location of their projects (are some local so that the landowner can see examples of the developers work for themselves)
- What is the location of the developer, do they have people on call to handle turbine issues?
Before agreeing to terms with the developer look around and compare developers, you must do your research. An informed landowner will be a more formidable obstacle for the developer and will help to ensure that a fair deal will be garnered.
Checklist for Determining Project Parameters
- Make sure that every parameter is stated to its entirety, and is presented in writing before the agreement is signed.
- What is the size and duration of the project, know the particulars (what will be the installed capacity, how many years will the project be running for) to ensure fair gains.
- What type of turbines will be used, noise level, and if possible have them present you with a model of the proposed project.
- If the agreement stipulates that the landowner will receive performance royalties the expected capacity factor will be helpful in determining fair royalties. Also include escalation clauses that ensure that if the price of energy increases then so does your share of the revenue.
- Make sure that the developer is legally allowed to work in the project state, county.
- Make sure that the developer has the proper permits for all facets of the project.
- Make sure that the developer has contacted the DEC about sensitive or endangered species present in the proposed project area, and if they have presented an Environmental Impact Statement (EIS) to the EPA.
- Make sure that it is clearly stated who is responsible for all aspects of the project (power generation, operations and maintenance, installation of turbines and power lines if needed, and decommissioning).
- Make sure that any damage to roads, or your property will be covered by the developer.
- Know the developers financing plan
- Do all meetings in person, not by phone or email to ensure legality.
- Does the developer have an agreement to connect to the grid?
- If possible make sure that before construction begins on your site that the money is given up front.
- Also, make sure that in the unlikely event that the developer can no longer finance the project that escape clauses are included in the contract so that you have the ability to sell the land to another developer.
- If the developer is contracting with another company or provider, make sure that the other company is included in the contract, and is held to the same standards as the original developer.
Things to be aware of as the project progresses:
- The ability for the developer to connect the turbines to the electricity grid requires an interconnection agreement with the Independent System Operator (ISO) which can be a lengthy process.
- Ensuring that the developer has obtained many of the abovementioned permits/ agreements will speed up this process
- Expect delays, some of which are out of the hands of the developer
- Know that experience from one area may not necessarily be the same in another area in regards to permitting, regulations, and ordinances
This information was compiled by Greg Gronski, Alternative Energy Research Assistant. Information was taken from: