It is no secret that renewable energy is a growing industry in Michigan and across the country. In particular, Michigan is well-suited for solar and wind energy due to available land and favorable weather patterns. However, a recent change in policy has made it more lucrative for landowners to use their land for solar energy.
Public Act 116 (“PA 116”) was originally enacted with the goal of encouraging and preserving farmland in Michigan. Under PA 116, farmers could enter into agreements with the Michigan Department of Agriculture and Rural Development (MDARD) to keep certain lands restricted to agricultural use for at least 10 years. In exchange, the landowners receive tax breaks and exemptions from special assessments. But the prior interpretation of PA 116 had the effect of restricting solar development.
Under MDARD’s new policy, farmers can rent land to solar companies for energy developments while keeping their tax incentives. This policy is a win-win for farmers and state renewable energy goals. Many farmers anticipate a higher return on their land from renting to solar companies than from growing certain crops. Further, solar developments typically receive less local community opposition due to solar panels being less visually imposing than most wind turbines.
The new policy works hand in hand with the Michigan’s renewable energy goals. Under state law, utilities must draw at least 15 percent of their power from renewable energy sources by 2021. Opening up more land to solar energy puts that goal within reach.
Solar energy was made even more desirable by a recent settlement between Consumers Energy and a number of commercial solar power companies. There had been a dispute regarding the price to be paid for new solar projects to connect to the existing electric grid. The settlement is expected to be approved by the Michigan Public Service Commission.
While solar developments can be lucrative, the approval process is complicated. In order to take advantage of the new PA 116 policy, the state must grant approval. Further, many municipalities require renewable energy developments such as wind and solar to apply for special land use approval before construction begins. An experienced land use attorney is vital to obtaining state and local approval for a renewable energy project. This is an investment that can produce significant returns.
The attorneys at Dalton & Tomich, PLC have extensive experience in Michigan land use matters. If you have questions regarding a potential solar energy development, or would like to secure approval for a development, please do not hesitate to contact us. We would be happy to speak with you.