While each agreement on the use of solar energy may be unique, there are a few considerations that are in common to many agreements. A second factor driving the recent development of solar power projects is the federal tax relief for photovoltaic installations. Tax incentives are down from 30% to 26% for projects launched in 2020, 23% for projects launched in 2021 and 10% thereafter. Thus, developers have a strong economic incentive to launch their solar photovoltaic installations in order to maximize federal tax breaks. 1. Windows of luckSwo factors seem to result in much of the recent development of the solar park. First, Michigan has strong Renewable Portfolio Standards (PRS) that require distribution companies to increase energy production from renewable sources – up to 40% by 2025. If you have any further questions regarding questions regarding solar land use contracts, please contact Scott Storey at 517.371.8159 or firstname.lastname@example.org. 4.
Exclusive leases contain exclusivity clauses that prevent the landowner from leasing other land to a competing solar energy company. Landowners of a considerable area should consider requesting a limitation of the width of geographic exclusivity. 3. ConfidentialityThe leases and leasing options contain confidentiality clauses that apply to all terms of the contracts, including financial terms and even the identity of the solar company. Therefore, once an agreement is signed with a confidentiality clause, it may constitute an infringement on the terms of the contract. 6. RentalsThe rental can be extended for decades, it is important to provide a mechanism to ensure that rents meet inflation. Many leases have a rent repayment plan that increases annual rent by a certain percentage. If you are dissatisfied with the percentage of the rent division, a homeowner might consider indexing the annual increase to either the consumer price index or the power purchase contracts approved by the Michigan Utilities Commission (DSP). 7. Tax considerations Most leases/relief provide that the solar company pays increased property taxes due to the installation of photovoltaic installations. However, changes may be needed to address possible “indecisions” or the introduction of recapture taxes due to the loss of the “farmland” classification.