November 17, 2020
Lease payments to landowners for wind and solar projects are usually cloaked in confidentiality agreements.
But a recent study, which sheds light on the multimillion-dollar payments, finds that landowners in South and coastal Texas receive some of the largest payments because those wind and solar farms produce electricity during peak afternoon hours when power prices are highest.
Landowners in high wind-producing South and coastal areas of Texas receive a total of $22.8 million over a 25-year lease to operate a 100-megawatt wind farm and $33 million for a 35-year lease, according to the study released in August. One megawatt is enough to generate electricity for 200 homes in Texas on a hot summer day.
Landowners in West Texas, where the wind is fiercest in the evening hours when electricity prices are cheaper, could expect to collect about $16.2 million for a 25-year lease and $24 million for a 35-year lease for the same 100-megawatt wind farm. The study made the calculations based on data collected for tax abatement purposes, typical leasing rates per acre and other costs reimbursed by developers.
The study was authored by University of Texas at Austin research associate Joshua D. Rhodes. It was sponsored by the Austin-based clean energy advocacy group Conservative Texans for Energy Innovation and the Austin-based wind energy advocacy group Powering Texas.
Like energy from the wind, power from the sun is most valuable coming from the coast. Property owners in the coastal regions earn about $10.3 million for a 25-year lease to house a 100-megawatt solar farm and $27.7 million for a 35-year lease.
Wind farmers in the Panhandle, West and North parts of Texas receive just about half that amount — $5.2 million — for a 25-year lease. A 35-year lease would generate payments of about $15.8 million, according to the study.