Frequently Asked Questions Regarding the Implementation of Solar-Use Easements
What is the minimum length of a Solar-Use Easement?
The new law allows a landowner to petition a county for rescission of the landowner's Williamson Act contract if the parcel or parcels prove to be predominantly marginally productive or physically impaired for agricultural production, as long as the land is simultaneously enrolled in a solar-use easement agreement for a period of not less than 20 years, unless the landowner requests a 10-year agreement. However, since Power Purchase Agreements endure for a minimum of 20 years, landowners will likely request a minimum of a 20-year restriction.
What land is eligible for a Solar-Use Easement?
An eligible parcel must qualify as marginally productive or physically impaired for agricultural purposes.
- Marginally productive farmland means it consists 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 is physically impaired for agricultural purposes.
- Physically impaired land has severely adverse soil conditions that are detrimental to continued agricultural activities and production. Severely adverse soil conditions may include, but are not limited to, contamination by salts or selenium, or other naturally occurring contaminants.
Generally, land designated by the Farmland Mapping and Monitoring Program as prime farmland, farmland of statewide importance, or unique farmland is not eligible for a Solar-Use Easement, except when the Department of Conservation, in consultation with the Department of Food and Agriculture, determines that the land is eligible due to existing circumstances that limit the use of the land for agricultural activities.
Is nonprime land automatically eligible for rescission as "marginally productive or physically impaired," or can a county differentiate between productive nonprime agricultural land and nonprime land with "significantly reduced" agricultural productivity?
Nonprime land is not automatically eligible for a contract rescission under SB 618. The county remains the ultimate policymaker on what land within its jurisdiction is eligible. A Williamson Act contract rescission and the simultaneous enrollment of the affected land into a Solar-Use Easement are subject to the agreement of the board of supervisors. If the county wants to differentiate between productive nonprime grazing land and marginally productive nonprime grazing land, it may do so. A county may also consider the protection of valuable open space and wildlife habitat areas that may qualify as marginally productive for livestock grazing as a higher priority than a Solar-Use Easement.
What are some examples or potential standards that would qualify as "significantly reduced agricultural productivity?"
The law requires the applicant for a Solar-Use Easement to provide 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. Examples might include, but are not limited to, poor soil texture or structure, the presence of a clay-pan or hard-pan in the soil's substrata that prevents water penetration, a perched water table, or alkali soil characteristics due to the presence of high soluble solids.
Why would an applicant request a perpetual solar-use easement?
If absolutely certain the land will never be used for something else, an applicant may request a perpetual easement. Even though these new Solar-Use Easements are not perpetual conservation easements as defined by Civil Code section 815.1, by adopting SB 618 the Legislature created these new perpetual easement agreements. While it is legally possible to create a perpetual Solar-Use Easement, as a practical matter it may not make economic sense to choose a perpetual easement. The reason is that it would require the payment of the 12.5 percent termination fee to extinguish the easement agreement should the landowner ever wish to cease using the land for solar PV facility. Nonrenewal is not an option for perpetual easements because by definition they are forever. Most landowners should be directed to a term easement of 20 years with an option to convert to a self-renewing agreement in year 19. This approach would allow the easement to continue on a self-renewing basis indefinitely with only a one-year nonrenewal period.
Also, pursuant to Government Code section 51192.1, if a landowner ever terminates a perpetual easement, the land must be restored to the conditions that existed before the easement.
Can a county waive, reduce, or delay the payment of the easement termination fee?
Yes, when the property is condemned or if the county determines that a proposed new use is in the public interest. The "change in use" provision allows the county to waive all or a portion of the termination fee and allows an extension in the time for making the payment. Any extension of time for the payment of the termination fee must not exceed the unexpired period of the easement had it not been terminated.
Is a power purchase agreement (PPA) required for the creation of a Solar-Use Easement?
A PPA is not legally required, but conditioning the creation of a Solar-Use Easement on a PPA is generally a good idea. This is due to the fact that once a Solar-Use Easement is created, the landowner is obligated to use the land for "collection and distribution of solar energy for the generation of electricity." A dilemma is created because a project proponent must have site control to obtain a PPA, but entering into a Solar-Use Easement (to demonstrate site control) would mandate use of the land for a solar PV facility regardless of whether a PPA was obtained. To resolve this Catch-22 situation, a term may be added to the easement agreement so the rescission of the Williamson Act contract and creation of the Solar-Use Easement occurs only upon the project proponent entering into a PPA. If no PPA is entered into, then the rescission of the Williamson Act contract is never triggered and thus it remains in place.
Can a landowner continue to operate a solar PV facility after the Solar-Use Easement has been extinguished?
Generally, no. Government Code sections 51191.3, subdivision (c), and 51192.1 require a landowner to "restore the land that is subject to the easement to the conditions that existed before approval of the easement by the time the easement is extinguished." This restoration requirement does not apply in situations where the county nonrenews the easement; however, nonrenewal by a county does not relieve the landowner from the surety bond requirement or the landowner's restoration obligation when the facility is ultimately decommissioned.