We have been approached by a company that wants to put up solar panels on a 443 acre tract. There’s an electrical substation adjoining the 443 acres (Im assuming that’s why they picked the location). We own 242 mineral acres under the surface of this tract and it has had production from the 6,500 Frio sands in the past with som new Vicksburg wells going in within a mile. My question is what’s a fair offer to make up for any chance of new production for at least 30 years. Has anyone here had the same situation? any advice would be greatly appreciated.
i would say that due to the location of the substation your land is worth way more then market values… Maybe try to negotiate a large upfront payment and a percentage of the power that’s generated but also a percentage of what flows down the wires to the sub station but if primary site construction doesn’t occur within 5 years then the agreement is void and you keep the initial bonus payment. Unfortunately they can always say your impeadeding economic progress but the can’t really argue that point when some huge manufacturer is trying to price fix the electrical rate for themselves in the future by making a big “green economy investment”. Engi did this in our area and the big boys were Walmart an Black & Decker…this is allot of option but it was all in the easement contracts.
Solar leases are quite long and complicated and not a do-it-yourself project. You need to consult an attorney specifically experienced in solar leasing. Attorney does not need to be local, but should have knowledge of rates in various areas of Texas. You can reserve a well location. If you are under an oil and gas lease you might want to get help in setting the acreage and location. Payments are substantial per acre and should include annual rentals adjusted for inflation. Often there are 3 parts or periods to the agreement. Option of 2-3 years while lessee lines up financing and agreements and you are paid lower amounts and continues to use surface as now. One year construction with much higher payment. Then operations with annual payments which as you note can be 30 or more years. Frequently the operator is not the original lessee.
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Definitely listen to TennisDaze, about needing to consult a competent attorney, this is definitely one of the situations where you think gee it’s better to do it now than to after you’ve signed all your wrights away…
But this is super interesting please please update us on how things go…
It sounds like you own over 50% of the minerals underneath the proposed tract. If this is correct I would ask for the same compensation they are paying the land owners. Proportionally reduced. They cannot and more importantly will not do anything without your consent.
Good luck
Thanks you guys for the great info!
I ended up using Uhl Fitsimons (the same firm that Parks Brown and Blake Waggoner represent) law firm out of San Antonio. Thank you M_Barns for your recommendation, they are great!! I’ll keep everyone posted in case you ever run into the scenario.
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