How to Lease to Wind Farms

Lease your extra land to a wind farm.

You can make money from the breezes blowing all around you; lots of farmers and ranchers are doing just that, leasing small portions of their land to energy companies as part of wind energy development. Wind farms are operating on working farms and ranches around the country without disruption to crops or livestock. To earn supplemental income from your own wind farm, you have to know the particulars of the lease agreement.

Things You'll Need

• Land suitable for a wind farm
• Legal and binding contract
• Lease agreement

Instructions

1. 

   wind farm wind tower

   Negotiate a legal and binding contract before any wind farm development begins. Be aware that any contract you are considering is negotiable in all aspects until it is actually signed. Make sure you understand and agree to every provision in your contract before you sign on the dotted line.

2. Ask these questions before signing any contract: How much of my land will be used and for how long? How much will I be paid and how will I get my money? Have all liability issues been dealt with? What type of compensation package do you offer? Who is responsible for roads, fences, gates and snow removal?

3. Know the components of wind farm leases. The first is a contract that leases the wind development rights for a certain fixed time period; the company that you sign a contract with will be the only company that can develop wind power in that time frame. The second component of the lease involves the wind tower itself and any development related to it, such as access roads. The lease on the wind tower itself is for a longer time so the wind farm developer has a chance to recover its investment cost and earn fair market return on investment.

4. Find out who will remove the tower when and if that time comes. Your contract should stipulate when it will be removed and who will pay for its removal. A North Dakota Public Service Commission ruling on October 1, 2008, states that the owner/operator of the commercial wind energy conversion facility is responsible for removing the wind turbines and facilities within three years of the end of electricity generation unless a new plan is proposed to reuse the turbines.

5. Exercise caution when signing a combined contract, even though this is the accepted procedure. The majority of your money will come from the right to build the tower, so be sure you're being fairly compensated.

Tips & Warnings

• Find out if your area is windy enough for development by going to the National Wind Technology Center's site at http://www.nrel.gov/wind/windmap.html.

• Visit the American Wind Energy Association's site at http://awea.org/faq/index.html to get answers to basic questions on wind farming.

• Wind towers require that access roads be built for maintenance and repair; this can affect access to your property, so make sure your contract allows for your input regarding any access road construction.

• Get payment for any crop damage caused in the building of towers on your land.

• Understand how payment will be made, whether per tower, per megawatt produced, a percentage of the gross revenue produced, or a combination of these methods.

References

• NDSU Extension Service: Wind Turbine Lease Considerations for Landowners
• PPM Energy: How to Profit from the Wind

Resources

• American Wind Energy Association