There are two or more separate Companies Leasing or attempting to lease both the surface and mineral interest in Houston County. The offers and terms differ. There was a entire page add in the Grapeland Messenger paper stating their offer was $1,000/per acre per year for 30 year’s for the surface rights. A friend said that they have offered him $1,200 per acre after talks. Another company is trying to lease solar and the mineral rights for the solar farm just north of Crockett. Their name is Candela Renewables. Their offer for the mineral lease for the solar farm was initially $800 for the entire 30 year period plus an additional 30 year’s. BUT the only wanted to a very SMALL dollar amount for the first 2 year’s. These people think everyone is dumb.
Solar leasing is complex and the surface owner should consult an attorney who is familiar with both the an appropriate detailed solar lease form and with solar lease rates. It is a bad idea to negotiate the rents and other terms in advance and thereby hamstring the attorney. Solar leases are not done with a single fixed lease rate over the entire term. There are 3 periods. First, a development period when the lessee finds financing and verifies that they can get the electricity into lines for market. Often 3 years. Rent is lower and surface owner continues to use surface for ranching, hunting, etc., but cannot construct buildings or permanent structures. Second, construction period, usually about a year, and higher rent. Third, the operating term with highest rents. There should be periodic inflation adjustments. Ag exemption will be lost and there will be a 1-3 year prior year clawback of property taxes at non-at exempt rates. Surface owner will not want to pay for all these higher taxes. The original lessee/developer will most likely sell the solar facility.
Great Post and advice. I had a mineral owner and land owner have me look at the proposed lease form for his 100% mineral ownership. He received an abstracted title on his minerals from 1835 forward in Texas. The proposed facility on the surface was 4,500 acres which one individual owned. It was for 30 year’s with a 30 year option. It was for a fixed rate over the 30 year period. But they did not want to pay that for the first few year’s, but at the end of about the 3 year or so they would pay the back fee’s. It’s a little more confusing than that. Basically let us “tie you up” and if we can get the deal done we will pay you then! This mineral owner owned a 100% of a smaller than the 4,500 acre surface owner. This is in Houston County, Texas.
Plus the surface landscape is ruined. Take a trip down to Taft Texas and then on to Sinton Texas and Portland Texas to get a preview of what you are getting yourself into. By the way most of these projects are initiated by American companies and then flipped to European or Chinese companies who could care less about your property or view. I hate these projects and the companies with a passion and I will never lease to any of them.
And it only takes one big hail storm to destroy the solar farm!
Happened quite recently near Houston.
Good article. Even though the solar array is out of commission the landowner’s property is still encumbered by the lease and repair efforts, assuming there are any.
It just appears that these companies or groups are wanting to “tie up” surface and mineral owners for very little money initially. It seems to be a “trap” that I would not want to get involved with. I feed that they should have the money before they try to make a deal. My personal feelings.
Yes and they generally get tax abatements in the early years of the project from the county so their exposure is minimized
Houston County is not in an area where enough WIND blows to power a “wind farm” Thank goodness!