How to Evaluate a 30-Year Energy Lease

A 30-year lease is a generational decision.

Energy leases are among the longest-term agreements most farm families will ever sign. A 30-year lease signed today will govern what happens on that ground until 2055. The children and grandchildren of today’s decision-makers will inherit whatever terms are locked in now.

Most leases are written by developer attorneys and are designed to protect the developer’s interests. Here are the key areas every farm family should scrutinize before signing.

1. What ground is covered — and what is excluded

Lease agreements must include a precise legal description of the covered parcels. Vague descriptions, references to “approximately X acres,” or language that allows the developer to expand the covered area without additional consent are all red flags. Make sure you know exactly what ground you are committing and what rights you retain on adjacent parcels.

2. Rent escalation — or lack of it

A fixed rent payment that looks reasonable today will be worth significantly less in purchasing power 15 or 20 years from now. Leases should include annual escalation clauses tied to a recognized index — CPI, agricultural land values, or a fixed percentage. A lease without escalation is a lease that transfers real value from the landowner to the developer over time.

3. Decommissioning obligations

What happens to the equipment on your land when the project ends? Who is responsible for removing it, and to what standard? Leases should include clear decommissioning requirements with financial security — a bond or escrow — sufficient to cover actual removal costs. Without this protection, your family could inherit the cost of removing infrastructure you never owned.

4. Assignment and transfer rights

Most energy leases allow the developer to sell or transfer the project — and your lease — to another company without your consent. The developer you negotiated with may not be the company operating on your land five years from now. Leases should include meaningful consent rights for assignment, or at minimum the right to terminate if the project changes hands in ways that affect your interests.

5. What you cannot do on your own land

Energy leases often include restrictions on what the landowner can do on or near the leased ground — restrictions on building, farming, access, and sometimes even on signing agreements with other parties for adjacent parcels. Read every restriction carefully and understand its full scope before signing.

UnCommon Energy reviews energy lease agreements on behalf of landowners and delivers a direct assessment of what the lease does and does not protect. If you have a lease in front of you, reach out before you sign.