Ok. One part of our property does have an oil well. We are also dry land and in all honesty have had about the same luck as you seem to have had on crops. They want to lease our land during surveying and construction for $10 per acre annually.......the money won't come in until construction is complete. To me that doesn't sound good at all because they're saying construction could last from 3-5 years.......no income for 3-5 years on land that you can't use because they'll be surveying and constructing could be rough!

For those who have been approached to do this solar farm, what would it have done to your current AG use taxes on the land? Would it have changed the much lower tax rate of AG use to something else?

That, I do not know.

I assume you will also loose the agricultural use valuation on the property so property taxes will go up.

Im no farmer, but If it were mine, I think i'd be looking at what I could/would have to do to farm it. The farmers I know make a comfortable living. Im sure not all farm land is created equal though.

One other thing I just thought of. A very close friend of mine was approached about a lease of his land for the wind turbines. They would putting together several ranches to do this one. They gave him a lease and said several of his neighbors were going to do it. There were several parts of the lease he did not like, but one was the more glaring. It allowed to the company with lease to cross his land to access other leases. The lease was written in a way to allow this to happen even without putting one single turbine on his land. They company could line turbines up along his fenceline, cross his land with roads and transmission lines and he would not have received any turbines or income from them. The shortest route to the other leased land was through his land. He told them that was not going to work. They tried 3 different times over 3 yrs to do this lease, he turned them down every time.

If they did change then the would the land value from agriculture value would change with the new value based on the income from the solar farm? That could get very costly on the yearly taxes.

I believe they would value it as market value of what similar properties would sell for. I don't think they could value it on the income stream from the lease. They have to be somewhat equitable and consistent, if they valued their place on the income from the lease they would have to value their neighbors on it also and vice versa.

Never underestimate or trust any taxing authority....

Taxes on the income.
Increased property taxes due to no longer qualifying for 1-D or 1-D-1 appraisal.
Depending on County this may not be a big deal or it could be fairly steep. Most often property value will go up due to amount of $ being produced on the land.
IMO, most importantly what happens ' if ' and ' when '.
Contracts are always written to benefit lessee very little to no concern given to lessor other than monetary compensation.

Not unusual for lease rate to be substantially lower before construction or before actual energy production.
Usually use average lease rate for land in area before construction is complete. I don't know the area $10 per may be a fair rate? I pay between $4 - $14 for grazing in various areas.
During construction phase the folks I know were paid $1.88 per acre. Not land suitable for crops or much anything else.

Most often initial lease contain all acreage, after build out usually reverts to actual acres being used.
Example only; 1000 acre initial lease at $10 per, after construction 420 acres actually used to produce at $400 per = paid on 420 not 1000.
Should be spelled out in contract.
I know my sons FIL made sure it was total acreage, not just what is used for production acres.

They'll keep making offers in the area until they find someone that looks at the $$ figure offered and signs with little to no legal or financial advice or knowledge beforehand.

And if that someone is a neighbor or a place y'all drive past on the way you'll kick yourself in the butt every time you see the Jones place making 100,000 - 400,000 per year for the next 20 - 30 years doing nothing to get it.

As much as it sucks the world is changing, you can profit from it or be negatively effected by it.
How many thought there would be wind farms / windmills in counties surrounding bigger cities 20 years ago.

Like it or not solar and wind energy is expanding & coming to places no one would have dreamed of.
Profit from it or be effected by it are really the only choices.
How do you think those LO's that refused to deal with wind energy companies feel now with their neighbors collecting checks & windmills right next door screwing up the views anyway.

If I had 1000 acres of farm land that I struggled to make $120,000 per year on and someone offered me the chance at making 200,000 - 400,000 without lifting a finger, I'd be real interested.
Interested enough to take it seriously & get legal & financial advice, research the company making the offer, ask the county what it will do for property taxes.

Do your due diligence.
Just me, I wouldn't wait & see, they'll move on to someone else, I'd get real busy today.

Counties in the Eagle Ford tax the land and then tax the royalty not yet produced(projected production/income for the next year). One county taxes royalties not produced yet at a rate of as high 7% per year per share owner for what they project the produced royalty value will be for the next year. I would think counties will start to do this with solar income in the near future if they get creative enough.

Spacing of solar farm equipment pretty much only allows for solar panel after solar panel after solar panel. We leased a spot this year that is butted up against on2 sides by solar panels and we saw very few deer. We had a drought, then excessive rain and then hunting season and I don't know if deer failed to adjust or what, but we saw few deer. Also, travel of deer is impeded because they put up 8 foot fences around the entire pasture they leased for panels. And looking at these we are close to, I would say it is too cost prohibitive to ever take them down. Maybe not, but I would ask. Also. they have sheep feeding on the ground underneath these panels. Don't know if they contract that out or not, but if sheep keep ground underneath them cleaned, they don't have to do it. You probably wont be killing any 160 inch deer out there for a while if they put them in, but your Dad can retire. All of this is just what I have seen from the one we are close to where we leased this year. We are going to try it one more year and see what happens. If it isn't any better, we are gone.

There have been many studies that say the windfarms decrease the value of the property. Nolan county, is the largest wind powered producer of electricity county on Texas, and at one time produced more electricity than the state of California. A Taylor county pdf about affect on land values. https://www.ccawf.org/wp-content/up...-on-Market-Value-of-Texas-Rural-Land.pdf There are a lot more reports just like this. But is X million in payments more than Y thousands in property taxes???

The improvements do not belong to the landowner, the solar and wind rigs are taxed to their owners, not the landowner. While the projected oil and gas deposits are owned by the mineral rights holder, so they get bit by the property tax appraiser.

The land under the panels does belong to the owner. The use of the land will change from AG to what ever they want to call it in that county. The value of that land will be set by the county and the county I live in recently upped land values by a lot....60%. Did not mean anything to me with AG taxes but will if I ever loose the AG. The tax rates have and will continue to go up so that number paid will never be as small as it is today. If the 1000 acres is all used and taken from AG taxes it will be taxed at the current value listed on their taxes. That could mean taxes in the $30,000 to $60,000 range per year. If the solar company allows sheep or other livestock then they would benefit the landowner income and his taxes tremendously. That is the smart thing to do.

This happened to us. The ran a highline and an underground line through our place with ZERO compensation. We got one windmill; our neighbor got five, and another neighbor has one twenty feet from our fence that could have easily been in ours.

I would call the Tax Appraisal District first with questions about the change in taxation. And the big question would be about Rollback Taxes. Here was the first link I found with an example

"Buying Land? Don’t Get Rolled With Rollback Taxes!"

https://vanalstynehomes.com/rollback-taxes/

"If you change what you use land for, you could be subject to five years of rollback taxes + 7% interest."

This article refers to selling. It would be worse for your family because it would be them with the tax issue, not a buyer. So your family would be looking at several years before income on it. You would likely have Rollback taxes during the year of signing the lease + the new tax rate for the years to come, with no income.

I doubt it. Every parcel has an underlying mineral owner weather it be the same as the surface owner or different, but it is traceable. If wind/solar becomes that big a thing in that much demand then companies/people/investors will buy land to put into solar, much like they did corn in the early ethanol days which will drive up land prices etc.

no freaking way.

Wine turbines are a scourge on the landscape

At least if the green energy market goes totally bankrupt tomorrow and I'm left holding the bag on a bunch of wind turbines I can sell the scrap/dispose of them. Good luck with getting rid of those solar panels.

They're both a scourge on the landscape though. Never said I was a fan of turbines. They just beat the hell out of a 1,000 acres with nearly every square foot covered in dang solar panels.

I would lease it and use the lease money to buy land in a different area. A Win-Win situation.

I spent a long time reading the first contract we were offered. As far as property taxes go, it was stated in there that to lessee was responsible for increased taxes due to losing ag exemption. Basically they will pay the difference.

The rate we were given during the discovery period of 3-5 years was $20/acre. As soon as a piece of equipment gets on the property they start paying the lease rate of somewhere around $350/acre. This yearly number inflated over the 30 year period to close to $800/acre towards the end.

All of the neighbors have been in contact and each of them have representation on the deal. At this point I still don’t know if it will ever build but it’s looking like the discovery contract will at least go trough. There are so many factors during discovery that can ruin the deal for everyone, anything from environmental stuff to Indian artifact findings, etc. I’m not very confident that we will ever see a solar panel but if we do it will be on less than 10% of the property on a piece of old crp that doesn’t offer anything but some grazing. If a solar panel farm goes on it we don’t care about the grazing.

I’ll have to go back and look, but I do believe that they were offering an escrow account with the money to reclaim the property once the contract is complete.

How many acres of the 1,000 acres? All of it and only yours will be used and not the neighbors? Could be why they said not to let them know. Would be nice to only use part of your place and some of the neighbors and you all get on the same page and still have huntable land left. My in-laws leased their land, several thousand acres to a now defunct wind company between Amarillo and Canyon. Didn't receive anything but pipe dreams. They signed to take ownership % which resulted in nothing. I recommended taking the lease bonus... Not sure they would have saw that though. I suppose this solar deal is probably more realistic since it requires less land overall.

If they are serious with the deal, make sure you are getting the best deal. You can easily buy another place with that kind of money. They don't build these on $5,000 an acre land. Them tell them you will lease your new land out to them. I I don't understand why these guys don't buy their own land sometimes. Do they have no capital yet?

If they want it that bad then sell it to them and walk away. I would not be responsible for a piece of property that will be destroyed and useless to any other cause. There will be a lifetime of maintenance handed down to generations of family with the chance of little to no land value remaining. Get cash, run far away.

The payoff sounds great.
But there's that thing about when something sounds too good to be true...........


I think one day the government support is going to go out of all this Green "stuff" and a lot of people will get burned.

We had just about inked a deal on a 2k acre one. They declined after trump was elected. Unlike wind there is no dual use. Lease and soil conservation program only brought $13 an acre so it was a no brainer for me.

What ever you do make sure there is a build completion clause, and what ever they offer in reclaimation escrow go 1.5x. They may lease for 30 years but you make minimal money with restrictions until they build. They may not ever build.... which screws up other opportunities.

Also note the oil and gas is real cheap right now... wind and solar will loose money every time. On top of that gas and oil are fighting to keep a hold on the energy sector

You would be suprised, I’ve know some friends have gotten approached and they have a mile of Llano river frontage.