Got a Solar or Battery Storage Lease Offer? What to Do First

It often starts with a letter, a phone call, or a visit from a land agent. A company is interested in leasing part of your land for a solar farm or a battery storage site.

Take it seriously, and take it slowly. A lease like this can be a life-changing financial opportunity for you, your family, and your farm's future. It can also commit your land for 30 or 40 years or more, long enough to outlast you. What you do in the first few days and weeks, before you sign anything and before you start negotiating, often shapes everything that follows.

Here's what to do first. The steps are the same whether the offer is for solar or battery storage.

1Don't sign anything yet

Not the offer, not a letter of intent, not a "simple" form to get things started. Even a short document can include binding promises, like agreeing not to talk to other companies or to keep the offer secret.

Developers sometimes set deadlines to create urgency. Those deadlines are often more flexible than they sound. Taking a few weeks to get advice is normal, and a reputable developer expects it.

2Figure out what you're holding

Developers use several kinds of documents, and they mean very different things:

• A letter or postcard of interest is marketing. It isn't a contract.
• A letter of intent (sometimes called a term sheet) is a short summary of the main terms, like rent, acreage, and length. Most of it usually isn't binding, but parts of it can be.
• An option agreement, often 10 to 15 pages, gives the developer the right to lease your land later.
• A lease, often 40 to 60 pages or more, is the full agreement. It controls your land for decades.

The option agreement is where many landowners get caught. It works in one direction only: during the option period, the developer can walk away or move forward, but you cannot walk away. And the full lease is often attached to the option. So if you sign the option agreement, you've usually already agreed to the lease, all 40 or 50 pages of it.

If you received an option without the full lease, ask for the lease. Just ask for the document; don't start negotiating.

3Write down what you know about the developer

Note the company name, the person who contacted you, the project name if they gave one, and anything they said about timing or plans. Keep every letter, email, and business card.

This matters because the company that signs with you is often not the one that builds the project or owns it for the next 30 years. Knowing who you're dealing with is part of evaluating the offer.

4Decide what matters most to you and your family

Before anyone negotiates, get clear on your own priorities. Sit down with your family and talk through questions like these:

• Which land do you want to keep farming, and which could you do without?
• Would you rather have more money up front, through a signing bonus, or higher payments later?
• What do you want the land to look like when the project ends?
• Who owns the land now, and who will inherit it? An agreement that runs 30 or 40 years can outlast most estate plans, and it can affect farming and non-farming heirs differently.

There are no wrong answers. But every lease involves trade-offs, and you'll get a better deal if you know which ones you're willing to make. Being honest with yourself about your top priorities for your family, your farm's future, and your finances is the starting point for an effective negotiation.

5Hold off on negotiating

It's natural to want to push back on the rent right away. Try not to, yet.

Every conversation tells the developer something about what you'll accept. If you ask for a small bump in rent, that number can quietly become your ceiling, when the market might have supported much more. And rent is only one of dozens of terms that decide what this deal is really worth to you.

Be polite, be open-minded, take notes, and let the developer know you're getting advice.

6Talk to a lawyer who focuses on these agreements

The best time is before you sign anything, ideally as soon as you receive a letter of intent or an option.

Look for a lawyer who focuses on solar and storage leases for landowners. These agreements are a different beast from most contracts. They often run 40 or 50 pages and last for decades, and much of what matters is buried in the details or, worse yet, not in the contract at all.

A lawyer will review the documents, explain what they mean for your land and your family, and negotiate with the developer for you. Ask the developer whether they'll cover your legal fees. Many developers will.

Don't worry if you can't find everything. Your lawyer will help track down the rest.

This resource is general information, not legal advice. Every property and every agreement is different. Sunright Law PLLC represents Pennsylvania landowners (never developers) in solar, battery storage, and land use agreements.

Sunright Law PLLC · (717) 802-8113 · seth@sunrightlaw.com · sunrightlaw.com/resources/lease-offer