Energy Storage Investment Opportunities

Energy storage is not as well known or as often discussed as other forms of renewable energy. However, as the market continues to develop and grow, battery energy storage systems (BESS) are becoming more and more pertinent, proven by recent legislation such as the Inflation Reduction Act (IRA).

Consider this your introduction to battery energy storage, providing information on how these systems work, the investment opportunity for landowners, and battery storage’s growing importance and relevance on the market.

Clean Energy & Battery Storage

Three primary types of clean energy are used today: solar, wind, and hydropower. Batteries can be used in conjunction with solar panels, wind turbines, and hydroelectric dams, allowing energy to be stored for a short time, then ultimately pushed onto the power grid at an optimal time rather than becoming wasted energy.

Many people know about this battery storage application in the renewable energy space, however, fewer people are familiar with stand-alone, utility-scale BESS. These installations contain energy banks housed inside shipping containers or similarly-shaped steel structures. Each cluster is connected to a substation to help manage supply and demand for the local electrical grid. The batteries pull power off the grid and store it when energy demand (and therefore, the price) is low. Then, they push power onto the grid based on signals from substations when energy demand is high.

BESS projects are valuable resources that are already acting as worthwhile additions to our country’s electrical grid infrastructure. Here’s how they benefit everyone involved:

  • Customers enjoy more consistent electricity rates as well as seeing the ultimately lower priced energy, given they aren’t paying a rate that accounts for wasted energy.
  • Utilities reduce costly energy losses.
  • The grid becomes more resilient during peak demand because, unlike gas peaker plants that take up to 10 minutes to react, a BESS can respond to changes in energy load or generation in milliseconds.
  • Developers profit by buying energy at a low rate, storing it in the batteries, and selling it to the utility company when power generation capacity is lower than demand.
  • Landowners lease their land to developers with lucrative results.

The Inflation Reduction Act (IRA)

In August of 2022, the Inflation Reduction Act was made into law by President Biden, pushing clean energy initiatives into unprecedented growth. Most agree that this is the most important and largest government legislation concerning clean energy in history. And according to the Solar Energy Industries Association (SEIA), “Ten years from now, there will be enough solar power installed to power every home east of the Mississippi.” The act “grants, loans, rebates, incentives, and other investments” for the development and use of solar, wind, energy storage systems, and the like, expecting to add over $100 billion to the economy.

How does this apply specifically to battery energy storage systems? First, the act offers tax incentives with the Investment Tax Credit, allowing, as one article explains it, “individuals or businesses to deduct a certain percentage of investment costs from their taxes.” Second, because the federal government is, through this act, injecting roughly $400 billion in this project, the demand for land and developers will continue to grow in number, providing landowners with more opportunities to store the energy harvested from the sun and receive rent payments while doing so. 

Why Landowners Should Invest in Energy Storage Systems

The only way stand-alone battery storage can be constructed in your community is if local landowners get involved. In order to build a BESS project on your land, it must be:

  • Located within extremely close proximity of a substation
  • At least one or two acres in size (most projects can be constructed on ten or fewer acres)
  • Relatively flat and not located in a wetland environment
  • Accessible from a road for construction and maintenance purposes

These prerequisites are much more flexible than those needed to build a solar farm. For instance, because of the low acreage requirements, you have the opportunity to construct a BESS project even if you don’t own hundreds of acres of unused land. Plus, while solar power arrays are typically limited to rural areas, battery storage is common, and more valuable, in urban settings where substations are more numerous. Energy banks can even be installed on an existing foundation, such as a vacant parking lot.

Utility-scale energy storage is such an up-and-coming technology that few states have BESS programs in place for development incentives. This means many landowners will have a chance to participate in the future, even if they miss the window for other energy opportunities.

Leasing land for a BESS installation can prove incredibly lucrative for landowners, especially with the typical long-term lease ranging between 20 to 40 years. And remember, the developer is the one responsible for inspecting and maintaining the system, not the landowner.

How Battery Energy Storage Systems Benefit the Environment

BESS projects are far less invasive than other forms of power generation. In fact, they have the lowest impact of all clean energy sources. Here are the environmental benefits of battery energy storage:

  • No waste products: No fuel is consumed onsite, so every BESS installation has zero emissions. This means nothing harmful leaks into the air or soil, local water sources are preserved, and the batteries don’t give off radiation.
  • Not disruptive to neighbors: Battery banks can be easily hidden by landscaping to provide an unobtrusive installation. They also make limited noise, think sounds equivalent to a residential HVAC unit, and have no moving parts. These qualities ensure the project does not disturb neighbors on adjacent properties.
  • Low land impact: Once the system has completed its lifecycle, or you choose not to renew your lease when the contract expires, the installation is easily removed. Much of the equipment is recycled, and the land returns to its original condition.

Learn More about Investing in Energy Storage Solutions

If you have unused land that meets the basic requirements for a BESS project, you have a great chance of finding an interested energy developer. However, this does not mean you should sign on the dotted line with the first company that comes knocking.

For a deeper dive into battery energy storage systems, consider exploring a recent interview featuring our VP of Land Acquisition, Clark Merritt. In this interview, Clark provides comprehensive insights into battery energy storage systems and ways to engage further.

Scout Land Consultants can help you negotiate a profitable energy storage deal that will benefit you and your family for decades to come.

Determining your land’s suitability is the first step, so contact us today to request a complimentary, comprehensive evaluation of your property.

References

“Impact of the Inflation Reduction Act,” SEIA

“Solar, storage companies to add over $100 to U.S. economy due to the Inflation Reduction Act,” Renewable Energy World

“Building a Clean Energy Economy,” WH.gov

“Business Energy Investment Tax Credit,” NC Clean Energy

“When to Use Investment Tax Credits,” The Hartford

How Much Land is Needed to Build a Solar Farm?

If you are like most landowners, the idea of solar development is somewhat new and you probably have some common questions about how the development process works. You’re not alone in this, because one of the most frequently asked questions is, “How much land is needed to build a solar farm?”

What Are My Options?

Most people either envision solar panels on their roof – which may consist of a handful of panels – or the giant solar farms you can spot from an airplane flying over Arizona. This really is part of the beauty of solar energy – it’s a modular system that can be built as large or small as needed to fit the energy need of that area. In the first case, a single house – in the latter case, an entire town.

You may be curious because you own land you believe could qualify for a solar project and are in an area that is experiencing an uptick of development activity. Both of these are most likely related to what the industry calls “utility-scale” solar development – which basically means that the energy is sold back to the local utility and then distributed to the energy customers in the area. These are the types of projects that private developers are seeking to lease land for projects.

Now, there are typically two different size projects: Transmission-Scale and Distributed Generation (DG).

Transmission-Scale

The Transmission-Scale projects are the larger of the two and typically require a minimum of 150 useable acres up to 600 acres or more. These projects connect to transmission lines (high-tension power lines) and need to be large because there are significant costs associated with connecting to the powerlines and the project needs to be large enough to find the efficiencies of scale (remember that one from economics class?).

Distributed Generation

The DG projects are much smaller – ranging from 10 to 50 useable acres. Most of these will tend to be on the smaller side of the scale and tie into the smaller power lines (3 phase or “distribution lines”).

What is a "useable" acre?

We mention the term “useable” acres because it’s important to know that land covered by wetlands, excessive floodplain, heavy slope or other uses that make the property un-useable for solar cannot be built upon.

Local Regulations & Restrictions

Finally, and most importantly, the utility-scale solar development industry on a state level is dictated by regulation and subsidized programs. It’s the reason that one area could be booming and, in another area just over the state lines, there is nothing happening. These programs often specify which types of projects will qualify – either DG or Transmission-Scale. So, depending on your area, the only viable project may be one or the other.

If you would like to learn more about the solar activity in your area, please feel free to contact us and we’ll perform a complimentary review of your property.

4 Keys to Getting Community Buy-In

President Biden was elected on promises that (among other things) he would launch a Clean Energy Revolution in the United States that would eventually help the country achieve the ambitious goal of net-zero carbon emissions by 2050. Rystad Energy has estimated that we would need about 13,412 square miles of land to install all the solar panels needed to help bring about this great transition from fossil fuels to renewable energy.

Some alarmist voices have raised concerns as to the availability of land to achieve said objectives. At NLR Solar, we do not share that concern. While the required space does speak to the imagination, the room we need is still only about 0.43 percent of the total land area of the contiguous 48 states. By 2050, 89 percent of the U.S. population will live in urban areas. Leave these urban areas, and you will find enough space for the solar farms we will need.

NIMBY

It is not the scarcity of land that will give us trouble, but a phenomenon known as NIMBY—an acronym for the phrase “not in my backyard”—where everybody likes the idea of solar farms, but nobody wants to actually live next to one.

Our team has seen so many promising projects crumble to pieces because the local community would not approve of the development. Developers throughout the country and of all kinds will eventually find themselves stuck with the task of having to convince local communities to be okay with certain projects. Solar projects in particular can elicit resentment with a few individuals at first, even though ultimately they will benefit the entire community.

A great example is one recent project based in Rhode Island. The local community was in favor of solar energy, but when it came time to decide where the solar farm would be, nobody wanted to have it close to their own home. They said it was “unsightly!” The only destination no one seemed to object to was the landfill. The citizens had to be convinced that the farm could not be placed there because it was not anywhere close to a power line or substation. So what can developers do to sell the local community on welcoming a new solar farm in their community?

4 Keys to Selling Solar Energy

Be Transparent

Developers should not sugarcoat any part of the project. Be open about what will end up where and how it will look, but also be transparent about why certain options are simply not available. You can not simply put a solar farm in the middle of nowhere, even if intuitively the word “farm” might make you believe otherwise. You need a solar farm to be close to either a substation or power line. So, explain to people what criteria need to be met by the location where the solar farm is going and why and how the location you have in mind fits the bill perfectly.

Give People A Voice

Allow people to voice their concerns and listen to their grievances. Sometimes their grievances will be based on information you will be able to correct (one common grievance is that the solar farm will take agriculture out of production). Sometimes people will be well-informed about the facts, but you will still be able to explain to them why they should embrace the project. Also, listening to concerns and questions is poised to help you further tune and expand on your communication. You will learn quickly where you have been incomplete, inconsistent, or not transparent enough.

Inoculate Against Firebrands

The large majority will not go up in arms against a solar farm; however, there will often be one or two firebrands (usually the immediate neighbors) who will stir up emotions and risk triggering an escalation of protests. You can not silence your detractors, it is better to apply what psychologists have called an “inoculation” technique, whereby you are up-front with your audience about possible objections and then explain why those objections are ill-informed.

Give Back to the Community

When PILOT programs are in place—”Payments In Lieu Of Taxes”, an arrangement where the developer pays a sum of money to the local municipality to compensate for tax revenue losses that will come with the tax exempt use of the real estate—some of the monies paid by the developer can easily be used to invest in the local community. While it is not the developer per se who will decide on how the money will be allocated (a new park, books for the library, new equipment for the football team, etc.), there is no reason why developers should feel shy about presenting the projected investment of additional resources in the local community as an important benefit offered by the project.

The Bottom Line

There is no lack of room in the U.S. to fulfill its solar energy needs in the future; however, developers will continue to need to communicate transparently, give people who are concerned a voice, inoculate (where necessary) against firebrands, and explain the benefits of the PILOT programs in place.

If you’re a developer in need of partners who are experts in land acquisition within the solar industry, consider Scout Land Consultants. Our team has secured site control on over 1,400 properties across the U.S.

If you’re a landowner interested in being a part of this exciting new push toward sustainable energy, contact us for a complimentary evaluation of your property!

What is the Solar Site Exchange?

If you’re in the business of solar development, then you’re well aware of the challenges that come with finding a quality project site. Today’s marketplace for solar sites is complex. With competition on the rise and policy and regulatory environments changing at a quicker pace, the window of execution continues to grow shorter. The Solar Site Exchange, an exclusive NLR Solar offering, is a curated database of readily-available solar sites enabling you to begin project development sooner, saving you time and money and reducing project risk.

NLR Solar is a renewable power platform and advisor focused on site acquisition for development. For the better part of a decade, our team has heavily focused on helping solar developers partner with landowners to sign over 1,100 land agreements across the country. Our philosophy is simple and effective. We start with the universe of available properties, and use data and systems to reveal the most promising opportunities, then leverage our land team and expertise to facilitate site control.

So Why the Solar Site Exchange?

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It’s Fast

Building an internal site acquisition team is expensive and time consuming, and, by the time you are ready to transact, the market may have changed. Technology platforms that are readily available to the market are frequently used by a number of developers; watering down any competitive edge you may have on properties. NLR Solar uses proprietary technology which we do not license or sell, but instead use the data to hone in on the best sites. We’ve done the heavy lifting with the landowner relationship so you don’t have to.

Prior to entering the Exchange, the landowner is made aware of the basic terms of a solar lease and has confirmed interest in moving forward should an opportunity arise, ensuring that if you’re interested in moving forward, you know they have some level of interest already as well.

Reduced Risk

NLR Solar carries the cost of site targeting, and owner contact, enabling you to review and select only the parcels you’d like to pursue. You also get the benefit of an experienced land specialist who will help you get the property to site control – under terms which are acceptable to you. No more training a local land agent on solar lease who has divided interests.

The NLR Solar team exclusively focuses on solar, meaning our team are experts in solar development and what’s needed for you to develop a successful project. We have a rigorous screening process that will speed up your desktop engineering review, including details on the surrounding infrastructure, site environmental factors, and even permitting insights. We’ve truly taken most of the guesswork out of it, so your precious time and resources aren’t wasted in a space where every minute counts.

Financial Alignment

Our compensation schedule is designed to align with the developer’s investment cycle. By taking the majority of the fee at project construction, it ensures that we only win when our partners win. With NLR Solar, you can be confident we’re a trusted partner you can rely on, not just another vendor to deal with through the complex process of developing a solar project.

Interested in learning more about how the Solar Site Exchange could expedite the solar development project for you – saving you time, money and frustration?

Our team at Scout Land Consultants would love to connect or walk you through a demo of how the software works. Contact us today to explore if our technology may be the right fit for you!

Benefits of Solar over Wind

Are you a landowner considering leasing your property to a renewable energy company? The two big players are solar and wind.

And before you decide which option is right for you, we highly encourage you to consider the benefits of solar over wind.

Option Period Length

The option period is the time between signing a renewable energy lease and having the development installed. The developer pays a small amount of rent during this period, but there’s no obligation to commence construction.

For solar, the option period is typically three to five years. Wind can be much longer—generally five to seven years.

Site Acquisition

Solar sites are based on the microclimate and infrastructure in the immediate area. Panels can be installed at any scale. Developers take a more targeted approach to acquiring suitable sites for solar projects. This can allow developers to have a more focused relationship with whom they choose to propose a lease.

In contrast, wind installations typically stretch across large parcels of land. As a result, wind developers often obtain property under option before knowing where they actually want to build. They tend to sign agreements with a more canvassed-style approach, leaving many landowners hanging.

Infrastructure Options

Solar is more flexible when it comes to high-voltage interconnection. With a more compact footprint, a solar project can scale, and can typically justify, extremely high interconnection costs on transmission lines as large as 500 kilovolts (kV). To work economically, wind is required to have option agreements with many different landowners for interconnection to similar high-voltage lines.

Noise and Aesthetics

Wind turbines stand hundreds of feet tall, causing an eyesore in all directions from miles away. They also generate lots of noise when operating.

Thanks to solar’s low profile, you don’t even know the panels are there until you’re up close. Solar also operates soundlessly with no moving parts. This means you’re less likely to get pushback from neighbors about aesthetic concerns and noise disturbances.

Installation and Decommissioning

Wind turbines don’t just stand tall—they also extend several feet underground, utilizing a lot of concrete for stability. This, along with extensive subsurface electric equipment and cabling, makes decommissioning a wind installation a major hassle that can damage farmland and farming infrastructure. Plus, wind turbine blades aren’t recyclable, meaning those that have reached the end of their life spans are now piling up in landfills.

Solar has a much less invasive installation process, with panels installed on six-foot posts around the property. Even though solar panels take up more acreage, there is much less risk for lasting damage to the land. Plus, silicon solar modules are comprised of glass, plastic, and aluminum—three materials that are recycled in mass quantities.

Profitability

In general, solar costs more to install than wind. But if you’re a landowner, you care more about what renewable energy companies will pay to lease your property. We find that landowners average up to six times the price that cropland would generate when they choose to lease their land for solar development. Because developers know that wind is less profitable than solar, they are not likely to offer competitive rates.

Get Help Leasing Your Property for Solar

If you’re a landowner interested in profiting from a solar farm, reach out to Scout Land Consultants. We are mediators between landowners and developers, helping to ensure the smoothest, most successful project for everyone involved.

To request a complimentary site evaluation, please contact us today.

What Makes for a Good Solar Site

If you’re a landowner and a solar developer has expressed interest in leasing your property, you may be wondering why yours and not your neighbors’. Here’s a quick cheat sheet for what makes a site right for solar development:

Access to Powerlines

Probably the most critical element to a solar site is the most obvious – proximity to the power lines. Solar facilities are just like small power plants; they create power and need to feed that power back into the existing power grid. What is a little less obvious, is that the distance to the nearest substation is also important. Substations are nodes in the utility grid that transition voltage (i.e. from high to low) and are required to manage the power generated from the solar facility, so it can be sent to the rest of the homes in the area. A good rule of thumb: optimal sites need to be within three miles of these substations to minimize the distance the power needs to travel along the lines. The further out, the more likely that the powerlines can’t support the new power and will require costly upgrades.

Now, it’s good to know that there are two primary types of projects, a) Transmission-Scale and b) Distribution-Scale. Transmission-Scale projects are larger (200+ acres) and need access to transmission lines – the high voltage lines you see in rural areas or along major highways. The Distribution-Scale projects are smaller (10-50 acres) and tie into the 3-phase power lines, which are more common and run along neighborhood roads. So, you may have a 30-acre site with a high voltage line, but it is not enough land to support a transmission-scale project.

The Flatter the Better

The next big factor is some basic site characteristics. First of all, solar development works best on FLAT properties. Even relatively small slope can change the amount of sunlight a solar array receives and when added up on a daily basis, that can seriously affect the production capabilities of the array. If there is significant slope, it does help to have a southern facing slope because all panels positioned in North America will always face south.

High & Dry

As you probably know, water and electricity don’t mix. Solar sites don’t work in areas prone to flooding or in designated wetland areas. There are some exceptions here for rare and low-risk flood zones, but local regulations will dictate the ability to construct. You can see if your property falls within a flood zone by visiting FEMA.

Clear the Way!

Developers typically prefer vacant land free and clear of trees and structures. However, in some cases, the project is profitable enough to justify clearing costs. Note, if it is a timber tract, landowners can often retain the timber proceeds if cleared prior to construction.

Mind Your Neighbors

Solar projects are quiet, don’t generate any traffic, and add valuable tax revenue for public use, so why shouldn’t communities embrace them? It beats us, but we’ve seen property owners fight tooth and nail to prevent projects from being constructed. Most developers will try to leave some buffer between the array and neighboring homes. If you have a vacant property closely surrounded by homes, this could be an issue with permitting.

Legislation & Incentives

The larger drivers for solar development are generally favorable state legislation offering additional incentives or your local utilities desire to purchase solar power (or state regulations requiring them to do so).

If you have a property that meets these criteria and would like a complimentary site evaluation, please contact us today!