My family has been approached to lease for a possible wind farm. I do not understand the lease option period. They quote a sum of $1500 for 60 months for their ingress and egress onto the property to erect meterological towers while they decide to proceed with the lease. What happens during this time? Does it usually take 60 months? Is $1500 a going rate for this time period?

Sherry,
Depending on the amount of land this company is considering leasing from you the rate of 1500 sounds rather lower. It is common in states with high levels of prime development for land owners to command between $8-13 per option acre, per year. Also, keep in mind the research lease that they are offering you comes with a development option. Understand the terms of this portion before signing. Operation terms are 20 -25 years, this is long time to be stuck in a bad lease.

Sherry,

Others in the office suggested that you try to get a sense of how promising your land is for wind development, especially in terms of the wind resource and access to transmission lines. This will give you a better place from which to negotiate.

We still don't have a good answer about the going rate for a lease like this, but it was suggested that you might want to negotiate for access to the data that's collected as part of the lease agreement.

Hope this helps!

Sherry,

Thanks for posting your question! It’s a very wise idea to try to fully understand and carefully review the terms of any lease before you enter into it. Because the terms of a lease can affect you and your land for a very long time, you should not enter into a lease without first consulting with an attorney, preferably one with experience in wind leases.

Windustry has a good online reference about leases and easements. It’s at: http://windustry.org/opportunities/lease.htm. It can help you figure out what things you should be considering and what questions you should be asking as you negotiate a lease. While money and time are both important issues, there are many other provisions that can be part of leases and which can really affect what kind of experience you have.

Although I can’t tell you exactly what would happen during the 60 month period, the developer might install meteorological towers, collect data, and analyze it to see if they want to pursue a larger wind development. They might also use the time to look into a host of other things that would impact whether or not a larger development was built, like financing, zoning, or environmental impacts. I’ve read that a typical lease for meteorological studies can last from 1 to 5 years, so the timing on this one sounds within the realm of reasonable.

I’m not sure about the rate, however. I’ll ask around, and post more later if I learn more.