Checklist for the Creation of a Solar-Use Easement

Solar-Use Easement: Summary Explanation Memo to California County Supervisors Sample Solar-Use Easement Agreement Model Resolution of Acceptance Checklist Frequently Asked Questions Submit Questions

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Checklist for the Creation of a Solar-Use Easement (PDF, 51 KB)

Eligibility

Determination – For land to be eligible for a Solar-Use Easement, the Department of Conservation (DOC) must determine that the land meets the following two requirements showing that the land is marginally productive or physically impaired:

Eligibility Requirements:

Requirement 1 – The land must either:

Consist predominantly of soils with significantly reduced agricultural productivity for agricultural activities due to chemical or physical limitations, topography, drainage, flooding, adverse soil conditions, or other physical reasons;
OR
Have severely adverse soil conditions that are detrimental to continued agricultural activities and production. Examples of severely adverse soil conditions include contamination by salts or selenium, or other naturally occurring contaminants.

Requirement 2 – The land is not among lands designated on Farmland Mapping and Monitoring Program maps as prime farmland, unique farmland, or farmland of statewide importance.

HOWEVER, land designated as prime farmland, unique farmland, or farmland of statewide importance may still qualify for a Solar-Use Easement if DOC determines that eligibility factors exist that limit the use of the land for agricultural activities.
For the purpose of Solar-Use Easement eligibility, important farmland designations may not be changed solely due to irrigation status.

Factors – In making its determination, DOC considers the following information that landowners must provide to the extent applicable:

A written narrative demonstrating that even under the best currently available management practices, continued agricultural practices would be substantially limited due to the soil’s reduced agricultural productivity from chemical or physical limitations.
A recent soil test demonstrating that the characteristics of the soil significantly reduce its agricultural productivity.
An analysis of water availability demonstrating the insufficiency of water supplies for continued agricultural production.
An analysis of water quality demonstrating that continued agricultural production would, under the best currently available management practices, be significantly reduced.
Crop and yield information for the past six years.

Nature of Easement/Agreement

Term: (GC § 51191.2.)

Perpetuity
Term of Years – not less than 20 years unless a shorter term is requested by landowner

Only the landowner can request a term of less than 20 years with a minimum of 10 years.
At end of the term, the easement is extinguished.
The easement may provide that at the end of the term, or on another date, the easement may be converted to a self-renewing easement whereby each year on a specified date a year is added to the term, unless a notice of nonrenewal has been served.

Self-Renewing – not less than 20 years unless a shorter term is requested by landowner

Only the landowner can request a term of less than 20 years with a minimum of 10 years.
Each year on the anniversary date of the easement, or another date acceptable to the parties, another year is added to the term of the easement unless a notice of nonrenewal has been served.

Conditions: (GC § 51191.3.)

Mandatory:

Restrictions, conditions, or covenants necessary to restrict use of land to PV solar facilities. (GC § 51191.3, subd. (a).)
Surety Bond (required for term-of-years and self-renewing easements). (GC § 51191.3, subd. (c).)
Soil and Restoration Management Plan: (GC § 51191, subd. (c).)

How the soil will be managed during the life of the easement.
How impacts to adjacent agricultural operations will be minimized.
How the land will be restored to its previous general condition, as it existed when the project was approved, upon the termination of the easement.

Optional: (GC § 51191.3, subd. (b).)

Onsite Mitigation
Offsite Mitigation
Surety Bond (County can determine whether to require a surety bond for perpetual easements. Surety Bond required for term and self-renewing easements – see above.)
Provision for necessary amendments. (Note: This is optional but highly recommended.)

Practical Considerations

Once a Solar-Use Easement is formed, the landowner is obligated to use the land for “collection and distribution of solar energy for the generation of electricity.” Because a project proponent must have site control in order to obtain a power purchase agreement (PPA), but entering into a Solar-Use Easement (to demonstrate site control) would mandate use of the land for a solar facility regardless of whether a PPA was obtained, a dilemma is created. To resolve this issue, a term may be added to the easement agreement so the rescission of the Williamson Act contract and creation of the Solar-Use Easement only occurs upon the project proponent receiving an acceptable PPA. If no acceptable PPA is obtained, then the conversion is never triggered and the Williamson Act remains in place.

Extinguishment: (Article 3 commencing with GC § 51192.)

A perpetual and term Solar-Use Easement may be extinguished on all or a portion of the parcel(s) only by immediate termination or by returning the land to coverage under a Williamson Act contract.

Termination – Prior to any action by the county to tentatively approve the termination of a Solar-Use Easement, the county assessor must determine the current fair market value of the affected parcel(s) as though the parcel(s) were free of the easement restriction.
This appraisal shall be used to determine and certify to the county auditor the amount of the termination fee that the landowner must pay the county treasurer upon termination. That fee shall be an amount equal to 12.5 percent of the termination valuation of the property.
The county may waive all or a portion of the termination fee if it finds that it is in the public interest to do so, and it may extend the time for making the payment or a portion of the payment for a period of time not to exceed the unexpired period of the easement, had it not been terminated, if both of the following occur:
(1) The termination is caused by an involuntary transfer or change in the use of the land, and the land is not immediately suitable, nor will it be immediately used, for a purpose that produces a greater economic return to the owner.
(2) The waiver or extension of time is approved by the Secretary of the Natural Resources Agency. The secretary must approve a waiver or extension of time if (a) doing so is consistent with the policies of the Solar-Use Easement law and (b) the county complied with statutory Solar-Use Easement extinguishment provisions.
Termination fees must be transmitted to the State Controller, similar to Williamson Act contract cancellation penalty fees.

A self-renewing Solar-Use Easement may be extinguished on all or a portion of the parcel(s) by nonrenewal, immediate termination, or returning the land to its previous Williamson Act contract.

Nonrenewal – Either the landowner or the county may serve a written notice of nonrenewal on all or a portion of the parcel(s) subject to the easement.

The notice must be given at least 90 days before the annual renewal date.
A notice of nonrenewal given by the county may be protested by the landowner, and the county may withdraw the notice before the renewal date. The landowner is required to restore the land subject to the easement--i.e., remove the solar panels and restore the land to its previous condition—upon extinguishment of the easement only when the landowner requests nonrenewal or immediate termination. If the county requests nonrenewal of the easement, the landowner may continue to operate the facility after the solar-use easement is extinguished.

Process

Step 1:

Submit to county an application requesting a Solar-Use Easement Conversion Agreement (GC § 51191.1.). The application should include:

Request that the county request an Eligibility Determination from DOC (GC § 51191.)
Request that the County Assessor conduct a fair market value (FMV) determination (GC § 51255.1, subd. (c)(1).)
Information for submission to DOC:

Eligibility Criteria (GC § 51191, subd. (b).)
Soil and Restoration Management Plan (GC § 51191, subd. (c).)
Any applicable fee to DOC (GC § 51191, subd. (e).)
Information regarding Surety Bond if required. (Plan for amount and where it will be held etc.) (GC § 51191.3, subd. (c).)

Step 2:

County requests determination from DOC. (GC § 51191, subd. (a).)

Step 3:

DOC consults with CDFA and makes Eligibility Determination. (GC § 51191.)

Step 4:

If necessary, amend instrument to include recommendations regarding the Soil and Restoration Management Plan provided by DOC in Step 3. (GC § 51191, subd. (c).)

Step 5:

County Assessor certifies to the Board of Supervisors the FMV of the land and sends notice of that certification to the landowner and DOC. (GC § 51255.1, subd. (c)(1).)

Step 6:

Board of Supervisors determines and certifies to the County Auditor the amount of the rescission fee (6.25 percent of FMV if Williamson Act Contract; 12.5 percent of FMV if FSZ contract) (GC § 51255.1, subd. (c)(2).)

Step 7:

County adopts resolution accepting or approving the instrument (GC § 51191.4.)

Step 8:

Applicant provides County with notice that an enforceable power purchase agreement has been obtained, pays rescission fee to the County Treasurer (GC § 51255.1, subd. (c)(2).), and provides County with any necessary financial assurance (GC § 51191.3, subd. (c) and § 51191.3, subd. (b)(3).).

Step 9:

Rescission fee is transmitted to the State Controller. (GC § 51192.2, subd. (e).)

Step 10:

Recordation of Instrument by Clerk of Board of Supervisors. (GC § 51191.6.)