Clean energy production from wind power projects is growing quickly in the United States. According to the US Department of Energy, the U.S. has 149 GW of installed wind capacity as of January 2024. Wind developers are presenting landowners with lease offers as they plan more and more utility scale wind projects across the country.
Wind leasing is very lucrative since it allows landowners to earn significant amounts of money over the course of a project. Wind lease agreements are long term in nature, and can last upwards of 50 years. Given the length of wind projects, it's important to not jump into an opportunity without conducting due diligence first.
Not only should landowners review potential lease agreements in detail, they should also investigate the wind company itself. Property owners who have received lease offers are responsible for conducting due diligence, but many wonder which questions they should ask. In this guide, we will outline a few questions that landowners can ask to conduct their own research.
*This article is not intended to be used as legal advice (LandGate cannot provide legal advice). It is intended to be used as a starting point to help kickstart the due diligence process.*
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Why is due diligence important?
In any legal agreement, both parties must do their research to build trust and create a mutually beneficial relationship. Given the long-term duration of wind leases, this is especially crucial. A wind developer may occupy your land for 20 to 50 years, so it is worth taking the time to thoroughly investigate the matter.
Although most wind energy companies have good intentions, every industry has bad players. It is the landowners responsibility to conduct their own research to ensure that they are working with a reputable company.
Questions you should ask wind energy companies
Before examining the specificities of a wind lease offer, it is important that landowners vet the energy company itself. Most companies in the wind industry are credible and eager to start new projects, but every industry has bad players. The questions below can help you examine the credibility and success of a wind energy company:
How many wind turbine projects have you developed in total?
How long has your company been in business?
How many other projects are you actively working on?
Does your company have any other planned projects in this state/ county?
How many of your planned projects have entered the production/ construction phase?
Will your company be the one that continues production after the turbines are installed?
Do you have local land representatives who will be working with you over the life of the project?
Landowners may also find it helpful to visit operating wind farms and meet with other landowners under wind lease agreements. If possible, this should be done for a wind farm that has been developed by the same company that has presented you with an offer. LandGate can help you find operating wind farms near you:
Questions you should ask about your wind lease agreement
In general, lease contracts for renewable energy projects are completely negotiable. Many wind developers push for a quick signing even though careful examination of any lease offer is crucial. Landowners should consult with an attorney before signing any contracts. Below are some important considerations:
What can/ can’t I do with my land during the lease?
What happens if they default on the lease agreement?
Will I be responsible for my property taxes and other fees?
What are the implications on heirs of the land?
What happens to the wind turbines if the lease agreement is terminated early?
What is the minimum payment that I will receive?
How many turbines do you expect will be placed on my property?
Wind lease considerations for landowners
The numerous advantages of wind energy have contributed to its rapid growth in the US. However, wind energy projects also come with challenges, which are just as important for landowners to consider:
Advantages of Wind Power
Wind power creates good-paying jobs
The energy produced from wind turbines is clean and renewable
Wind power benefits local communities and landowners in the form of wind lease payments
Wind power enhances US economic growth
Challenges of Wind Power
Wind turbines produce noise and can be considered unpleasant to look at
Wind turbines can impact local wildlife even though new technology is being implemented to reduce this impact
Conclusion
Reputable companies should welcome questions from landowners and strive for a positive relationship given the long-term nature of land lease agreements. Although it may not be necessary to loop in an attorney immediately after receiving a lease offer, it is certainly recommended that landowners consult with one before signing any legal documents.
Are you interested in leasing land for a wind farm? Find your land’s estimated value for a wind lease in our free property report, and then follow this step-by-step guide for publishing a free listing to LandGate’s marketplace:
