Inside Commercial Solar Lease Agreements: What Knox County Landowners Need to Know

Through our coalition's research efforts, we've obtained and analyzed commercial solar lease agreements being offered to Indiana landowners, including those in Knox County. These contracts—some approaching 70 pages of dense legal language—contain terms that should concern anyone considering signing, and demonstrate exactly why Knox County needs stronger regulatory protections.

The Scale of the Commitment

The single most shocking aspect of these agreements is their length. Landowners aren't signing 5 or 10-year contracts. They're committing to agreements that can span generations:

Think about what 57 years means. A landowner signing today at age 40 would be 97 years old when the agreement finally expires—if the developer exercises all extension options. More likely, the land passes to heirs who inherit a binding contract they never signed, limiting their options for their own property for decades.

Payment Structures: The Devil in the Details

Perhaps the most concerning finding in our analysis is how payment terms are structured. Many landowners assume they're negotiating fair compensation, but the contracts reveal a different reality:

Yes, you read that correctly: some landowners are signing binding 57-year contracts with blank payment fields. The actual compensation amount gets "negotiated" after the binding agreement is signed. This creates a massive power imbalance where the landowner has already committed their property but hasn't secured definitive payment terms.

When payment percentages are specified, they're typically 2-3% of revenue, not profit. That might sound reasonable until you realize the developer controls how "revenue" is calculated, what expenses are deducted, and what actually counts toward that percentage.

The Lender Protection Racket

One of the most one-sided provisions we found relates to lenders—the financial institutions backing the developer. These clauses essentially give lenders more rights to the landowner's property than the landowner retains:

In practice, this means: You sign with Developer A. Developer A goes bankrupt. Their lender steps in and can either continue the lease under potentially different terms, assign it to Developer B (whom you've never met), or force you into a new lease altogether. Meanwhile, your property remains tied up indefinitely while the lender "cures" the default—which could take years.

Inadequate Decommissioning Protections

When a solar project reaches end-of-life after 30-40 years, someone has to remove the panels, equipment, foundations, and restore the land. The question is: who pays for it? The contracts we analyzed contain weak decommissioning provisions:

• No upfront bonding requirement: Decommissioning bonds aren't required until construction is complete—meaning the developer could abandon a partially-built project with no cleanup funds
• Developer estimates costs: The developer, not an independent engineer, estimates decommissioning costs
• No inflation adjustments: Bond amounts don't adjust for inflation over 30-40 years
• Insufficient coverage: Industry best practices recommend 125-135% of costs; many contracts fall short

The consequence? If decommissioning costs exceed bonded amounts—which is likely after decades of inflation—the shortfall falls on either the landowner or Knox County taxpayers. This is exactly the scenario that stronger county ordinances should prevent by requiring adequate, inflation-adjusted decommissioning bonds.

Mineral Rights Surrender

A provision that many landowners miss in their initial review: signing a solar lease often means giving up surface rights to valuable minerals underneath their property:

In Southern Indiana, where coal, oil, gas, and other mineral reserves exist, this provision could mean forfeiting mineral rights worth potentially millions of dollars. Even if you don't plan to extract minerals today, you're preventing yourself or future generations from benefiting if mineral values increase.

The Confidentiality Gag Order

One of the most troubling provisions we found is the confidentiality clause—essentially a gag order preventing landowners from discussing contract terms:

• Landowner cannot disclose contract terms to anyone
• Cannot warn neighbors about problematic provisions they discovered
• Cannot seek meaningful advice from community members
• Violation triggers breach of contract with severe penalties

This confidentiality clause serves one purpose: preventing the community from learning what's actually in these agreements. If the terms were fair and reasonable, why would developers demand absolute secrecy? These clauses prevent informed decision-making and community discussion about the real implications of solar projects.

Assignment Without Consent

Many landowners assume they're entering a relationship with a specific company they've researched and trust. The reality is different:

You sign with Reputable Solar Company A. They assign the lease to Unknown Solar Company B. Company B assigns it to Foreign Investment Firm C. Thirty years later, you have no idea who actually controls the lease on your property, and you have no recourse.

Unlimited Construction Rights

The contracts we analyzed give developers extraordinarily broad rights to alter the property:

• Can construct roads, buildings, and infrastructure anywhere on leased acres
• Can modify terrain, remove trees, and alter drainage
• Can install equipment upgrades or replacements without consent
• Can grant easements to third parties for utilities and access

Landowners signing these agreements often don't realize they're giving up control over what actually gets built on their land. The developer has broad discretion to construct whatever they deem necessary for project operation.

Why This Matters for Knox County

Some might ask: "If these are private contracts, why does the county need stronger regulations?" The answer is straightforward—these one-sided agreements create risks that extend beyond participating landowners:

Taxpayer Liability

When inadequate decommissioning bonds leave cleanup costs unfunded 30-40 years from now, Knox County taxpayers pick up the tab. We've seen this pattern in other industries—companies dissolve, bonds prove insufficient, and public funds cover remediation.

Community Impact

These projects affect entire communities. When 87 non-participating families live near three projects because of decisions by 6 participating families, the community has a legitimate interest in ensuring adequate protections exist.

Uninformed Decisions

Confidentiality clauses prevent landowners from making fully informed decisions. Without community discussion and shared information, people sign agreements they don't fully understand—agreements that can burden future generations.

What Stronger Regulations Would Address

County ordinances can't rewrite private lease agreements, but they can establish baseline protections that benefit everyone:

• Mandatory adequate decommissioning bonds with annual inflation adjustments
• Requirements for third-party cost estimates instead of developer estimates
• Irrevocable surety bonds that can't be canceled by developers
• Adequate setbacks protecting non-participating properties regardless of lease terms
• Property value guarantee zones ensuring neighboring property owners aren't harmed

These protections don't prevent solar development—they ensure it happens responsibly with proper safeguards for both participating landowners and the broader community.

Questions Landowners Should Ask

If you're considering a solar lease agreement, demand clear answers to these questions before signing:

1. What exactly is the payment structure, with specific dollar amounts or percentages?
2. How are payment amounts calculated, and who verifies those calculations?
3. What happens if the developer defaults or goes bankrupt?
4. Can the lease be assigned, and to whom?
5. What are the decommissioning requirements, and who estimates costs?
6. Am I giving up mineral rights, and what are those worth?
7. Can I discuss these terms with my neighbors and community?
8. What recourse do I have if the developer violates terms?

If the developer won't answer these questions clearly or tries to rush you into signing, that's a red flag. A 57-year commitment deserves careful consideration, independent legal review, and complete transparency.

What the Coalition Is Doing

The Knox County Coalition for Safe Solar Practices is working to strengthen our county ordinance to provide protections that address the gaps in these lease agreements. Our advocacy focuses on ensuring that solar development:

• Includes adequate decommissioning protections so taxpayers aren't liable
• Respects the rights of non-participating property owners through adequate setbacks
• Requires transparency and proper safety standards
• Protects the long-term interests of our community

We're not anti-solar. We're pro-responsibility, pro-transparency, and pro-community protection. The lease agreements we've analyzed demonstrate exactly why those protections matter.