as a mineral interest owner should we lease our ownership for solar panels - would this prevent future drilling interest and what is the going rate to expect to be paid for an acre - also lease says up to 50 years… is that the usual time frame…
Hard no. They are probably offering you very little for a long term lease. It potentially makes your minerals worthless. If they lease All around you then you can negotiate what the mineral value is and sell them at a premium later. We did this with some crappy Cline minerals in Sterling and it worked out well. Must have patience as it took three years.
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offering $1k an acre - up to 50 year lease - still a hard no?
The lease rate is per year. I have seen several, one in which I owned part of the minerals and they wanted the mineral owners to consent. We had them dedicate roads and pad sites. Funny thing was, one of the pad sites was over a stock tank. That was fixed.
Most recently we were offered $750 per acre, with cpi adjustments and some sort of sharing of taxes. This will convert your property from above to commercial and taxes will increase substantially.
Currently we are passing on that deal as I don’t want to lose the ranch for 50 years.
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The solar company will probably present you with either an accommodation agreement or a surface use waiver, not a lease. Use of the surface for solar farms will prevent oil and gas drilling unless: 1) your minerals can be pooled and no surface use is necessary; or 2) the oil and gas can be reached with directional or horizontal drilling; or 3) pad sites are reserved that comply with Texas Railroad Commission rules. There really is not a standard compensation or term. A lot depends on the state of oil and gas exploration and production in the area of your minerals. This is a situation where it will be critical to get input from an attorney experienced in these issues.
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There are many other thingsto consider. The property has probably already been rezoned as commercial. Have they offered to cover the additional taxes? What is the land value now, after rezoning, and future value? The company that approached me wants the mineral rights. There are also additional payments for development period, construction period, underground cables, storage, etc. The proposal also states that I will not have access to the fenced area and there is a 100’ easement along the front and 250’ around the remaining perimeter that I will not be able to use for farming or timber.
I’m not a tax pro, but I think passive income is taxed at 30%. That means you would be paying $333 per acre to the IRS each year.
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