Making agreement

When it comes to contracts, the devil is often in the detail. That is the case whether the contract is for grain or livestock production, or for a wind or solar farm.

Jennifer Zwagerman, director of the Drake University Agricultural Law Center, has fielded a few questions about those details in renewable energy contracts. She says solar or wind contracts can be beneficial for farmers, but they do need to read the fine print and consider all the possibilities.

One thing she tells farmers is that many wind contracts, for example, are very long-term contracts. The impact of signing will be felt for a long time.

That means landowners need to ask some questions both of yourself and of the company looking to locate turbines, Zwagerman said. Look at both the short-term and long-term implications.

In the short-term, there are obvious questions about construction issues, such as making sure there is payment for crop losses during construction due to equipment and crews being in fields. Make sure there is compensation for any loss of production and for any damage to fields, drainage or even to soil as dirt is moved.

She said there are also issues of annual payments for wind or solar energy generated. In some cases there is a flat payment for use of the land and a percentage payment for the amount of electricity generated.

But there are also long-term considerations. Some agreements may be for up to 99 years, Zwagerman said. Others may be 50 years or 20 years. Either way, they likely extend well into the next generation, if not longer. That means there are legitimate questions that may need to be addressed in the contract.

Who is responsible for the removal of a facility once it is no longer in use? In some cases, the company takes responsibility or creates a fund to do so, she said. There are also questions regarding any obstructions such as shadows cast or other items. For example, does a solar contract require you to remove trees?

“All of this is really an issue of awareness,” Zwagerman says.

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Gene Lucht is public affairs editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.