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NE Nebraska | I believe your kinda right tmrand. From outside looking in a company will run around trying to sign everyone up as fast as they can. Then a competing company will come along and do the same only offer just a wee bit more money. Then when the dust settles the two companies trade contracts or one just buys out the other jockey.
Next they offer the payment based on a fixed nameplate amount with the possibility of more money if the turbine produces above a certain percent, (which realistically will never happen). The payment is supposed to go up with inflation. First 30 year term with option on two 10 year renewals, for a possible total 50 years.
What many don't realize is the payments that are to be inflation adjusted are usually 5--8-10 years behind from when the contract starts to when turbines are operational. For example, an original contract signed in 18-19 was then extended a couple more years due to covid and delays of being built and operational. Example of a 20k payment based off of 18-19 timeframes is no longer up to date and relevant for pay in 2025 for example. 2025 minus 18/19 or however long it takes to get built is now 6-7-8-9-10 years behind of inflation they aren't gonna be paying you on. So take a 2ok payment, take off 25% for tax man, now down to 15k. 15 k minus 3-4 acres with road access. 4 acres 500/acre rent today is another 2 k gone. Another 2-3k gone for having to jack around farming around the things by increased equipment costs and time lost yields turning around ect. Now helicopter or plane won't put on fungicide around them so another 20-30acres of 20 bushel less yield. 600 bushel times $5/bu is 3k gone. Now we are down to basically $7000 a year. What's land rent and the price of corn gonna be in 30-50 years on those acres and lost bushels also. Now adjust your prices for 30/50 years down the road and that will actually put us in the loss category.
I'm told they don't have to have a bond for cleanup, at least not right away. So basically the payments might not cover the cleanup down the road if company goes broke. Not to mention you may have the headache of farming around the things. Don't know what value to put on that headache.
So yea, at first it sounds like a really good deal but when you start to figure things, I'm not so sure it's worth the headache.
I'm interested to see responses myself. Please correct me if I'm figuring wrong also. At first I was like ya this is alright but then the over thinker I am kicks in, and I run the calculator, and it almost becomes a bad joke.
Edited by 270 2/8/2024 22:31
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