There was a time when the concept of renewable energy may have seemed like a fad. That time is firmly in the past. As of 2020, electricity generated by renewables surpassed coal for the first time, when the U.S. created a record 834 billion kilowatt hours (approximately 21% of total production, versus coal’s 19%).

Two of the top renewable energy categories – wind and solar – require a large footprint to operate. Because of that, farmers continue to be targeted by various companies to install turbines or solar panel installations on their property. These deals can be lucrative, and total payouts to landowners has climbed to several hundred million dollars per year.

Even so, contracts for these projects are often confusing to navigate, according to Tom Jennings, partner with the Illinois-based law firm Livingston, Barger, Brandt & Schroeder. And the stakes can be high – wind turbines, in particular, can have contracts that last as long as 50 years.

Jennings encourages landowners to pore over the fine print on these contracts and involve an attorney, if possible. Pay attention to components such as payment plan, term, insurance, taxes, damages, land use and decommissioning.

Land use squabbles are a common pain point for landowners, Jennings points out. He recommends adding a rider to the contract that ensures that substations, battery storage and other extra infrastructure is negotiated separately. You’ll also want to make sure you have continued access to drainage tile and retain your subsurface mineral rights. Also, make sure developers do not leave odd-shaped areas outside of projects.

Related:How to navigate wind and solar leases

“If they’re putting a 50-acre solar field on top of my 100 acres, I don’t want them leaving me something that looks like a gerrymandered map without road access that I can’t get a 24-row planter through.”

Demand is on your side, Jennings adds. Don’t be afraid to ask for what you want.

“You can’t really offend these people if you ask for something,” he says. “You’re not going to run them off, even if they don’t agree.”

The average wind turbine’s footprint takes out just under an acre of land, and solar installation size varies widely. Crop damage is also likely to occur during installation. Make sure a compensation plan is included in your contract. If it’s to your benefit, tie yield losses to actual farm data and not county averages.

Even though most renewable energy projects will stretch decades into the future, it’s important to look at the terms surrounding decommissioning. Also look into a “cure” period for additional compensation due to compaction and fertility issues, which can negatively affect your production potential for several years.

Related:Solar panels help stabilize farm income

According to Jennings, the top two questions regarding decommissioning are:

At the end of the day, many renewable projects make smart financial sense, and many others may not be worth the hassle. Be sure to put in the adequate amount of homework before making what will be a generational decision on your operation.

Ask these questions

According to YSG Solar, it’s critical to ask plenty of questions before signing any contract to install a solar array. Getting the answers to these questions will help give you peace of mind and help you figure out whether the venture will be a profitable one.