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    Industrial scale solar

    A fairly large number of industrial scale solar operations are proposed in my area. It's a relatively new issue for this area and I'd be interested to hear comments on them.

    Landowners are being offered significant rental rates if their land is close to a 3 phase or larger power line. In some cases, this is way more money than they could make farming or growing trees.

    My concerns are:

    1. Most of the leases are being offered by a third party company, not the underlying utility.
    2. Industrial scale solar only makes sense economically for the utility company if the federal tax credits are in place.
    3. What happens at the end of 10 or 20 years when the project doesn't make sense? Can landowners afford to remove the equipment and clean the land up?
    4. Are we creating thousands of acres of future brown fields in rural areas?


    I hope this generates some comments on both sides of the issue. I get that it's hard for landowners to turn down income. Most landowners are land poor and cash money is hard to come by.

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    Honestly weather or not it's a good deal for the land owner is specific to the lease that is singed. On the face of it leasing your land so that someone else can manage a power generation facility on it could be a good deal.

    There has been a lot of leases like that in the Northeast for both solar and wind power. The equipment is paid for, maintained, and operated by a separate company. The land owner collects a monthly payment for the leases use of the land. Some will even be offered a small percentage of the electricity that is generated.

    For a lot of small farms it's proven to be a much more profitable use of the land.

    Environmental impact of solar farms is minimal for the local land. The panels generate no waste. The biggest impact will be all the concrete footings and transformer pads.

    If it was previously pasture or hay fields the grass will still grow under and in-between the rows of panels. Soil errosion is minimal and small animals have habitat.

    The important terms will be in the lease. The best leases will leave put no burrden on the land owner at all.
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    Regarding #3 on your list. If I were a landowner and offered one of these leases I wouldn’t consider signing unless the lease contains verbiage that the leasing company is responsible for completely removing all appurtenances installed as part of their system when the lease is terminated by or for either party or reason.

    The standard cell tower leases around here include clauses like this and are the only way to assure no burden on the land owner upon termination of the lease.
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    Removal clause

    Quote Originally Posted by balrog006 View Post
    Regarding #3 on your list. If I were a landowner and offered one of these leases I wouldn’t consider signing unless the lease contains verbiage that the leasing company is responsible for completely removing all appurtenances installed as part of their system when the lease is terminated by or for either party or reason.

    The standard cell tower leases around here include clauses like this and are the only way to assure no burden on the land owner upon termination of the lease.
    I think most companies insert that language, however since they are third party companies formed specifically to sign up leases and then sell them, I suspect that most of the leasing companies won't be around very long. I also suspect but won't know that the utilities that buy the leases will leave the cleanup to the original company. My guess is the leasing company will declare bankruptcy, the utilities contracts exclude them from the liability and the landowner will be left to do what they can. That's just a guess but based on other industries, it's certainly a possible scenario.

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    I sit on a local planning board and we had one of these "Large scale, ground based solar-voltaic systems" installed several years ago and just recently approved a 2nd which is being installed right now.

    My concerns are:

    1. Most of the leases are being offered by a third party company, not the underlying utility.
    2. Industrial scale solar only makes sense economically for the utility company if the federal tax credits are in place.
    3. What happens at the end of 10 or 20 years when the project doesn't make sense? Can landowners afford to remove the equipment and clean the land up?
    4. Are we creating thousands of acres of future brown fields in rural areas?
    Items #1 and 2 work together. The only way any of these projects work is if the 3rd party installer/manager can work the credits. In our case, there are both Federal and State programs offering credits. The Utility companies themselves aren't eligible for some of the credits, hence the 3rd parties.

    As far as #3 goes, we require that the installer/manager post a bond to cover the cost of equipment removal and site restoration. We have a formula we use (initial equipment cost multiplied by 2 and then add on an annual inflation factor of 4% then round up to nearest $100,000 mark = total value of the bond) and plan on a 30 year life-cycle. The bond must be issued prior to the start of any construction. The bond is setup so that if the installer goes out of business, the bond is payable to the town and we can hire someone to remove it.

    I'm not sure how you get a brownfield out of a solar install. Brownfield usually refers to a site that has contaminated through prior industrial use. There are very little at these sites that can contaminate anything. Holes are dug, concrete footings are poured, steel is erected and solar panels are mounted on the steel. Everything is wired into a small shack on site. That's the only place where there would be anything that could cause any contamination. The current system we have going in will have 2 Tesla batteries hanging on the interior wall of the shack. The solar panels themselves have special disposal requirements but they don't "leak" anything onto the ground of they break.

    In our case, we welcomed both projects for one reason. We have a small rural community and everyone wants to keep it that way. But we have a lot of pressure from people in the greater Boston area wanting to buy lots and develop them into single family housing. The town is setting aside tax revenue to buy up as much land as possible and setting it aside as conservation land but there is only so much revenue that cam be raised in any given year. Both of the projects were brought to us by farmers who where having a hard time staying afloat and had a choice between this or selling their land to a developer. By allowing the solar project, the farmer gets steady income and can keep their land. It can't be developed in any other way while the solar farm is in place. And having it in place for 20-30 years gives teh town some breathing room to buy up other lots in the mean time. At the same time, that farmland was in the state's "current use" program so they had been getting significant property tax reductions. When you take property out of current use, the developer pays back property taxes for the last 5 years. Plus, while the solar system is installed they'll pay taxes at the "industrial use" rate. It's a huge tax windfall for the town.

    Once those solar farms are decommissioned, then the town can think about trying to purchase those lots. But we'll know when that's happening instead of it coming as a surprise.
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    Quote Originally Posted by Treefarmer View Post
    I think most companies insert that language, however since they are third party companies formed specifically to sign up leases and then sell them, I suspect that most of the leasing companies won't be around very long. I also suspect but won't know that the utilities that buy the leases will leave the cleanup to the original company. My guess is the leasing company will declare bankruptcy, the utilities contracts exclude them from the liability and the landowner will be left to do what they can. That's just a guess but based on other industries, it's certainly a possible scenario.

    Treefarmer

    Bingo! That's exactly the issue you run into. Hence, our requirement for the bond.
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    Why would anyone try to do solar when, literally,, 132 feet up the road, you have a nuclear power plant !!??

    Add new energy sources where there is a need,,, not where "you" want to build it,,,

    The guy who tried to add wind generators somewhere like the middle of Texas,, found it would not work..
    No customers,, no sales,,, he had too many losses trying to move the electricity to a customer,,

    The same with solar, who wants $0.11 per kilowatt solar electricity,, when you can buy $0.10 nuclear electricity??
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    I suspect the leases are structured in a similar manner to oil & gas leases here. That being said, the devil is in the details of the contract language. Having a surety bond in place is a good way to protect yourself should the leasing company go belly up or the lease has been bought and sold on the secondary market like mortgages a number of times where things fall through the cracks during ownership transfers.

    As for the construction impact; an earlier poster pretty much said it best as for the relative simplicity of construction and the materials being used.

    I think these things are great on industrial buildings with lots of flat rooftops just waiting to be put to good use. I have mixed feelings on using them on large ground based projects. I think they are a good way to profitably use odd shaped pieces of land that aren't suitable for other uses. However; whether they a smart use of land that could grow cash crops can be debated.

    Lots of variables involved as each site and the terms of the lease are different that prevents a one size fits all approach to these PV farms.
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    Thanks, great reply

    Quote Originally Posted by JimR View Post
    I sit on a local planning board and we had one of these "Large scale, ground based solar-voltaic systems" installed several years ago and just recently approved a 2nd which is being installed right now.



    Items #1 and 2 work together. The only way any of these projects work is if the 3rd party installer/manager can work the credits. In our case, there are both Federal and State programs offering credits. The Utility companies themselves aren't eligible for some of the credits, hence the 3rd parties.

    As far as #3 goes, we require that the installer/manager post a bond to cover the cost of equipment removal and site restoration. We have a formula we use (initial equipment cost multiplied by 2 and then add on an annual inflation factor of 4% then round up to nearest $100,000 mark = total value of the bond) and plan on a 30 year life-cycle. The bond must be issued prior to the start of any construction. The bond is setup so that if the installer goes out of business, the bond is payable to the town and we can hire someone to remove it.

    I'm not sure how you get a brownfield out of a solar install. Brownfield usually refers to a site that has contaminated through prior industrial use. There are very little at these sites that can contaminate anything. Holes are dug, concrete footings are poured, steel is erected and solar panels are mounted on the steel. Everything is wired into a small shack on site. That's the only place where there would be anything that could cause any contamination. The current system we have going in will have 2 Tesla batteries hanging on the interior wall of the shack. The solar panels themselves have special disposal requirements but they don't "leak" anything onto the ground of they break.

    In our case, we welcomed both projects for one reason. We have a small rural community and everyone wants to keep it that way. But we have a lot of pressure from people in the greater Boston area wanting to buy lots and develop them into single family housing. The town is setting aside tax revenue to buy up as much land as possible and setting it aside as conservation land but there is only so much revenue that cam be raised in any given year. Both of the projects were brought to us by farmers who where having a hard time staying afloat and had a choice between this or selling their land to a developer. By allowing the solar project, the farmer gets steady income and can keep their land. It can't be developed in any other way while the solar farm is in place. And having it in place for 20-30 years gives teh town some breathing room to buy up other lots in the mean time. At the same time, that farmland was in the state's "current use" program so they had been getting significant property tax reductions. When you take property out of current use, the developer pays back property taxes for the last 5 years. Plus, while the solar system is installed they'll pay taxes at the "industrial use" rate. It's a huge tax windfall for the town.

    Once those solar farms are decommissioned, then the town can think about trying to purchase those lots. But we'll know when that's happening instead of it coming as a surprise.
    Thanks, that's a lot of great information. FYI, we may be talking a difference of scale. We have projects proposed or built from 100 acres to 6,000 acres. One of the projects already built required significant grading of the land and the developer failed to control silt which literally ran across a state road deep enough to block it. It then silted up a nearby creek. Fortunately, that's a worst case scenario.

    As for the term brown fields, I probably expanded the definition to include any industrial land use that is no longer being used for either it's designed purpose or converted to another productive use. Again, worst case scenario would be hundreds of acres of slowly degrading solar panels with no one taking care of the ground so eventually brush and trees grow up. Trees can't be harvested because of the panels, concrete and steel in the way and the panels, concrete and steel are too expensive to remove because of the trees.

    Does your bond require removal within a certain time frame of a plant going out of commission or if the site is no longer maintained?

    Thanks again for the information, that's very helpful.

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    We refer to them as solar farms, here in MN. Being a very blue state, the legislature in their infinite stupidity passed A a law here a few years ago mandating that a minimum of 25% of all energy production has to originate from a renewable resource. That coupled with Obama's war on coal, sent electric rates skyrocketing. I'd be thankful for $0.11/KWH electricity. Our electric bill has a half page of surcharges and add-on charges. So what they say the rate is and what it actually is are two different things. I just simplify and divide the total by the KW consumed. We are $0.1405 a KWH for the general service and $0.0902 KWH for off-peak (only energized from 11:00PM to 7:00AM).

    To meet this renewable mandate, they first invested in wind generators. They found the maintenance costs were pretty hefty. No surprise, considering the blades are nearly 70' long. Can you imagine the load they place upon the bearings in a short depth rotational shaft? Of course, 100' up makes them so convenient to service. I use to drive by a small wind farm of a dozen generators. At any given time, two were not operating. There went nearly 20% of the capacity.

    So they moved to solar, which is not cost effective even with the tax credits, here in MN. We're just too far off the equator and the angle of the panels is steep, which is not optimum for generation. However, without that angle, the snow sticks to them--which it does anyway, but not all winter.

    Another power provider is building a huge transmission line across the northern MN wilderness, "The Great Wilderness Transmission Line" so they can purchase/transmit hydro power being generated in Canada, which satisfies the renewable mandate. That was good for another 7% in the rate a year ago.

    So with these type of energy prices and the crazy taxes, it is driving business out of the state and we as retirees have our home on the market and plan to leave the state. The only people that can afford to live here are government employees and entitlement recipients. I wonder what they're going to do when there is no one left to foot the bill?

    In short, with the way things stand here, the mandates will protect the solar farms and don't see them going broke until the state government does. As for the rest of the country, as most of the Dem front runners all seem to jumping on the "New Green Deal" boondoggle, they will be safe in the est of the country until our currency collaspes after the IMF de-certifies the dollar as the global reserve currency and we can no longer print money to pay for our trade deficit and other things. At that point, the solar subsidies will be the least of your problems.
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