Shining the light on solar energy
Solar energy production is one of two primary sources of renewable electricity with the other being wind power generation. Industry, state and local government, and electric power generation companies want to achieve a certain level of electrical energy supply from sources that do not emit carbon. The demand for solar energy is increasing exponentially. The Tennessee Valley Authority is aiming to have 10,000 megawatts of solar capacity by 2035 which means more solar production facilities will be built across Tennessee. These facilities could utilize thousands of acres of farmland for the siting of solar panels and for easements to run transmission lines.
Solar facilities can be a major income source for landowners. To this point, many electricity providers are contracting with private companies to install and operate solar facilities and contract with the electrical provider. In many cases, the land is leased for a period of time to locate the solar panels and distribution lines. Nationwide, lease rates range from $300 to $2,000 per acre per year. Factors that can affect the lease rate include project size, land prices and substitute uses, and regional supply and demand of solar sites. Regardless of the lease rate, the return per acre annually for a long-term lease can exceed income from other uses.
Even though solar facilities can be a source of income for landowners, there are many unknowns. Very few laws exist to protect landowners from exploitation, damages and unexpected monetary losses when leasing their property for utility scale solar facilities. Concerns include decommissioning, long term effects to the land, liability for clean-up after a natural disaster and long-term financial stability of solar facility companies.
This year, Farm Bureau supported SB2797 Walley/HB2761 Gant which requests the Tennessee Advisory Commission on Intergovernmental Relations to perform a comprehensive study on utility scale solar energy. This study will bring all stakeholders together to ensure this alternative energy source is developed wisely with regard to consumer and environmental protection among other potential unknowns. Farm Bureau was also involved in SB1925 Walley/HB2056 Hurt which established guidelines and bonding requirements for utility scale solar lease agreements.
The Senate sponsor of both pieces of legislation, Senator Page Walley of Bolivar, says “Protecting our landowners, taxpayers and communities in the rapidly expanding “Solar Farm” industry was a priority for me and Farm Bureau this session. I sponsored and passed a major protection measure requiring that any solar developer who leases land must up-front have a “decommissioning” plan and financing to dismantle or clean up the solar equipment and reclaim the land. Landowners and taxpayers could easily be left holding the bag in a natural disaster, abandonment or default by the lessor. This first step will be followed with additional regulations in this largely unregulated field.”
