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Securing Renewable Energy Leases on State Land

Securing renewable energy leases on state land is an important part of meeting state and nationwide ESG goals, creating new income sources, and generating a positive environmental impact by expanding the national renewable energy portfolio. Solar and wind energy projects have historically been the most popular renewables to develop on state land across the United States, however there is also an increasing focus on carbon capture and sequestration efforts, electric-vehicle charging stations, and battery storage.

Many states employ the use of public land trusts, which are solely responsible for managing state-owned public land. The majority of state land trusts are proactively seeking private sector development partners to lease state land for the construction of renewable energy facilities. For example, the Colorado State Land Board “…is eager to lease trust land to developers for renewable energy projects” and is currently using LandGate to monetize state land by seeking offers for solar energy leases.

Similarly, the California State Lands Commission’s 2021-2025 Strategic Plan has identified a strategic goal of “…identifying new, sustainable, and responsible revenue streams, including commission-driven project requests with desired revenue-generating activities such as solar and wind”.

Identifying Suitable Lands

The first step in securing a renewable energy lease on state land is to identify lands that are suitable for renewable energy projects. Public landowners or representatives can work with land experts to assess their land holdings and determine the renewable energy resources available. They will be able to determine which areas have the highest potential for renewable energy development. There are a few different factors that must be considered when determining whether a location is suitable for a solar or wind project.

  • Having a large area of flat land that has little to no obstructions is key for solar development.

  • Wind development requires a different amount of acreage given the size of the capital equipment

  • Wetlands, flood plains, and drainage areas should be avoided for both solar and wind farms.

  • The distance from substations, distribution lines, and transmission lines directly impacts the feasibility of energy projects. The closer land is to these electrical infrastructure, the more suitable it is for energy development.

With the use of LandGate’s PowerRealty tool, public landowners are able to evaluate all of these factors and determine if their land is a high value opportunity. PowerRealty can show the topography of the land, any exclusions such as floodplains, and the distances from the critical electrical infrastructure. LandGate then provides an estimated value for potential energy projects such as a solar or wind farm.

Spotlight on Solar and Wind of Renewable Energy Leases

Energy leases such as solar, wind, and geothermal can benefit public landowners. These benefits depend on the specific state incentives and policies in place:

  • Solar leases: Solar leases allow renewable energy developers to install solar panels on public land and generate electricity from the sun’s energy. Many states offer incentives for solar energy development, such as tax credits, grants, and performance-based incentives. Public landowners can benefit from these incentives by leasing their land to solar developers and receiving rental payments.

  • Wind leases: Wind leases allow renewable energy developers to install wind turbines on public land and generate electricity from wind energy. States with high wind potential often offer incentives for wind development, such as tax credits, grants, and production-based incentives. Public landowners can benefit from these incentives by leasing their land to wind developers and receiving rental payments.

Procuring Renewable Energy Leases on Public Land

Once public landowners identify which high value land sites are available for energy resource development, the next step is to create and deploy a strategy to procure a lease with a third-party lessee. Depending on the public landowner’s specific procurement policies, it may be necessary to host a public auction or have a competitive selection by issuing a Request for Proposals (RFP). A typical procurement strategy will include information about the requirements for the lease, the desired renewable energy technology, the length of the lease, and the minimum qualifications a third-party needs to submit an offer to lease public land. Regardless of the procurement requirements, it is critical for public landowners to proactively advertise opportunities to lease land for renewable energy projects directly to the third-parties that would be the lessee. LandGate is able to accommodate any procurement strategy in our marketplace so that public landowners can advertise land available for lease directly to a concentrated network of energy developers, investors, and funds.

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