Can I Sell my Wind Lease Royalties?

August 2, 2021

Wind Lease Royalties, Wind Royalties, Wind Turbine Royalties, Wind Rents…the terms are one and the same: they mean you lease your land for commercial wind turbines, also known as a wind farm, and you receive regular payments for the wind lease.

The time to sell your wind rents is now. Landowners like you are making huge profits by selling their wind royalty payments while market demand is high. Rather than receiving a check in the mail each month over the lifetime of the wind farm project on your land, you can cash in now for one large payment. There are eager buyers after your wind rent payments and LandGate has a free tool that allows you to calculate just how much you could make today.

Calculate Your Wind Rents Sale Value

Wind Rents / Wind Royalties Explained

When you lease your land for a wind farm, you can expect to collect your earnings over the time period stated in your wind lease agreement, typically 25 to 50 years, in the form of wind rent payments. These wind rent payments can be based on a fixed amount per wind turbine or can be a percentage of the energy production or gross revenue. While a wind land lease positions you to receive these payments monthly, quarterly, or biannually, selling your wind lease royalties provides you a lump sum payment up front rather than waiting years to collect your earnings.

“We were considering accepting an offer to sell our wind lease payments but were not sure if we were getting a fair offer. We listed our wind turbine payments on LandGate. They did all the work. Within 5 days we had seven separate cash offers.We decided to go with the best one that was over three times higher!” -PF

Top Reasons to Sell Wind Rent/Royalties:

Inflation – With inflation at historic highs, your wind payments are losing value every day. Since wind payments are relatively fixed and are not variable, the higher inflation becomes, the less valuable your future payments will become.

Taxes – The sale of your wind rent payments qualifies for a 1031 Exchange. That means you can have severely reduced tax consequences when you sell your wind rents and get paid upfront.

Extremely High Demand for Wind Rents – Currently there is a very high demand from investors to purchase wind rent payments. As more renewable energy projects come online and the market cools down, the willingness of buyers to go above and beyond typical investment metrics will likely go away. We are in a ‘renewable energy bubble’ right now and it will not last forever.

Lease Term Uncertainty – Most landowners are not aware that their wind project will not likely go for the full term of the lease. A buyer who purchases your lease upfront takes on the full risk of that variability of the project life vs. you hoping that the project continues to operate after any renewable energy credits expire.

Net Present Value – The value of an upfront payment is more valuable than waiting for payments to come in over the potential life of the project. $10,000 in your pocket today is worth more than $10,000 30 years from now. Many landowners are cashing out and re-investing that money into additional real estate or other investments that will grow vs depreciate due to inflation.

Don’t Have to Sell Your Property – Many landowners are simply selling their lease; not their land in these wind payment transactions. Keeping your property that will appreciate over time and selling your lease that is depreciating over time is an incredibly smart financial move for landowners. Many landowners are growing the size of their farm, ranch, or real estate portfolio by capitalizing on their lease cash flow and they still own the land at the end of the day.

Now is the Time to Sell Wind Rents

Your wind land royalties are currently in high demand from energy investors who are scrambling to add ‘green investments’ to their portfolios. Amidst a frothy market and a renewable energy boom, wind cash flow buyers are willing to pay a premium for wind rents, meaning more money in your pocket today. Due to inflation, if you are getting $10,000 of wind lease royalties this year, in 30 years this $10,000 won’t be worth much at all.

LandGate has helped landowners find wind royalty buyers for their wind rents that pay close to ‘inflation cash’ for 30 years of future wind royalties. This means that they’d pay you today what you’ll be getting over 30 years minus inflation. The reason investors do this is because Wall Street is desperate to show that they invest in green energy. Investors are increasingly utilizing ESG (Environmental, Social, and Governance) to analyze risk factors and growth opportunities when they are looking to invest in companies. They are viewing companies that lack a focus on sustainability as “riskier” investments.

Therefore, companies are eager to purchase your wind rents to prove to potential investors they have an eye on sustainability, giving experts like LandGate the upper hand in the negotiations to present you the best deals. While green energy is currently heavily incentivized, the future of these incentives is uncertain and can change at any time, which could decrease your wind royalties sale value. Strike while the iron is hot.

It is important to also note that many wind leases include clauses that the developer can get out at any time. Operational problems can also cause your wind lease to get canceled, potentially cutting your 20 years of receiving rent checks drastically short. If you sell now, you can take the future money from your producing wind farm and invest in something more stable.

How Our Client Made Money Selling Wind Lease Royalties

As an example, LandGate recently secured a top offer for a landowner from Illinois who signed a Wind Lease and Easement Agreement with a wind farm developer 6 years ago. The wind farm was constructed and is currently in the operations phase, which means the developer is converting wind energy into electricity and selling it to utility companies. This lease has a term of 25 years and also grants the developer 2 options to extend the lease at 5-year intervals at the end of the 25-year term.

The lease provides for an annual minimum rental payment plus monthly royalty payments. The rental payment is $6/acre/year and increases $1/acre/year every 5 years. The monthly royalty payment is 4% and increases an additional 2% every 5 years. As the rental is a fixed amount/year, the royalty payment is calculated based on the gross revenues of electricity sold. The form and terms of wind lease agreements can vary from one company to another. Rent and royalty payments can oftentimes be calculated differently.

This landowner received an offer to purchase all his future payments, which he estimated to be approximately $1,000,000. He did not know if this offer was fair and asked LandGate to do a valuation of his property rights and market his wind turbine payments for sale. In a matter of days, we presented him with multiple offers and accepted an offer almost 3 times his original offer.

LandGate Can Help You Sell Wind Cash Flow

We have hundreds of buyers looking to make you an offer for selling your wind royalty payments. LandGate is the Zillow for land resources. LandGate experts help landowners receive top offers from institutional energy investors around the world to purchase your cash flow. It is free to list your interests and there is no obligation to accept offers. Whether you are ready to list your wind royalties on our leading marketplace or simply want to calculate how much you could get, LandGate is here to help today.