Report: Windmills and solar panels can yield more cash than crops

Published 3:44 pm Monday, November 18, 2024

Washington farmland owners with pastures and relatively low-value cropland stand to make more money leasing property to wind and solar developers, a state Department of Commerce study reports.

Solar-power companies typically pay $200 to $350 per acre annually, though payments can be as high as $1,000 an acre. Wind developers typically pay thousands of dollars per megawatt, according to the study.

The consultant who did the study, Industrial Economics economist Kieran Bunting, told a legislative committee Monday landowners also sometimes receive lump payments.

“When the property owner signs the agreement with the developer, they receive, say, $50,000 as a bonus,” he said.

“These payments can represent significant income for the landowner,” Bunting said. “This is especially true if the project is sited on lower value cropland, where the payments are going to outweigh the loss in crop value.”

Lawmakers asked the Commerce Department to conduct a study on how the growing number of wind and solar installations are affecting rural communities, especially in Eastern Washington.

The department briefed the Joint Committee on Energy Supply, Energy Conservation and Energy Resilience on parts of the report, including lease payments to landowners.

Farmland is the most common type of land taken by renewable energy projects, according to the study. Individual landowners have apparently benefited, but several counties are concerned about losing agricultural land and are opposing projects.

Bunting presented preliminary findings in June. The final report has more numbers. Although lease agreements between developers and landowners are typically confidential, some terms are publicly available, he said.

Lease terms vary dramatically, but are generally more profitable than agriculture, according to the report. Dryland wheat is the crop most commonly supplanted by solar panels, followed by hay, the study found.

Projects have displaced little land planted to higher-value crops, such as apples and cherries. Lease payments would have to be higher to offset the loss in farming income, according to the study.

The study estimated payments for the 160-megawatt Rattlesnake Flats Wind Farm in Adams County total as much as $740,000 a year. Subtracting lost wheat production, landowners stand to gain up to $690,000 annually.

Windmills typically cover 1% to 3% of the land leased for wind projects, leaving the rest available for farming, Bunting said.

The Lund Hill solar project in Klickitat County covers about 1,800 acres. The land typically rented for $8 to $9 per acre. The solar project will potentially increase landowner income by up to $470,000 a year, the study found.

The Bureau of Land Management leases land for wind and solar projects based on the land’s value. BLM has leased land for between $1,013 and $3,112 an acre in King and Snohomish counties in Western Washington.

BLM has leased land for between $36 and $106 an acre in Klickitat, Douglas and Ferry counties in Eastern Washington, according to the study.

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