Wind Leases vs. Wind Easements
- Craig Kaiser
- Feb 13
- 6 min read
Leasing land for wind farms provides landowners with the opportunity to earn passive income on their land while contributing to the production of renewable energy. Wind projects typically provide contracts in two forms – a wind lease or a wind easement agreement. The issues involved in a wind lease agreement or an easement are similar, and both are legally binding contracts. However, there are distinct differences between the two.
Key Takeaways:
Wind Leases: Long-term contracts (20-50 years) allowing developers to build and operate turbines, providing landowners with payments and establishing a landlord/tenant relationship.
Wind Easements: Grant developers specific land usage rights (e.g., construction, noise) without full possession, often remaining with the land permanently.
Pros: Generate passive income, support renewable energy, and maintain agricultural use.
Cons: Potential noise, visual impact, tax implications, and dependency on continuous developer operations.
What is a Wind Lease?
A wind lease is a long-term agreement between a landowner and a wind energy developer, granting the developer the right to build and operate wind turbines on the property. In return, the landowner receives steady wind lease payments, often structured as lease fees, royalties, or a mix of both. These agreements, which can span decades, outline key details like turbine placement, access roads, and electrical infrastructure- turning land into a hub for renewable energy while generating consistent income.
These wind lease agreements essentially create a landlord/tenant relationship. The right to use the land comes with some control over the leased property. The landowner must not interfere with the wind company's rights as stated in the agreement. All wind farm leases vary and are negotiable with the developer.
What is a Wind Easement?
A wind easement is a legal agreement between a landowner and a wind developer. This agreement allows the developer to use the landowner's property for a specific purpose. These rights don’t allow the developer to possess the land, but they do let them use it in specific ways to support a project.
Different Types of Wind Easements
The different types of wind easements are construction easements, non-obstruction easements, transmission easements, access easements, and noise easements.
Construction Easements: The right to construct turbines or supporting infrastructure on a property.
Non-obstruction Easements: An agreement to not build anything that could hinder the amount of wind reaching the turbines.
Transmission Easements: To install, maintain, and access electrical infrastructure that would support the wind project (transmission lines or other facilities).
Access Easements: The right for a developer to cross non-leased land for construction, operation, and maintenance of the turbines. This may include allowing the wind company to access existing roads or to create new roads.
Noise Easement: The right to produce noise within reasonable levels over a certain radius from each turbine.
Similar to a wind lease, payments for wind easements can either be in a lump sum or through periodic payments. They are typically paid on a per acre per year basis, but the payment terms vary per agreement.
What is the Difference Between a Lease and an Easement?
The key distinction between an easement and a lease lies in their nature: an easement is a property right, granting an interest in the land, while a lease provides a contractual right to use the property. From a tax perspective, granting an easement is typically taxed at favorable capital gains rates. Additionally, an easement is more enduring and typically permanent in nature, while a lease is only for the term specified in the lease agreement.
A contract with a wind developer may include both a lease and an easement. Similar to a wind lease, wind easements do not transfer legal possession of the land to the wind company. Since lease and easement agreements are completely negotiable, landowners must consider legal counsel when reviewing both lease and easement agreements.
Turn your property into a source of income by partnering with wind energy developers through wind leases or easements! Curious if your land is wind-farm ready? Get a free LandApp Property Report to find out. With the Wind Value Index Score, your property is rated on a scale of 0 to 100 for its wind lease potential. Ready to take the next step? After receiving your free report, you can list your land for lease on LandApp's marketplace- completely free and with zero obligation to accept any offers.
Pros of Wind Leases & Wind Easements
The main benefits of leasing land for wind turbines including making money on your land, supporting clean energy production, and creating local jobs. Additionally, landowners can retain ownership of their land and typically still utilize the property for farming purposes.
1) Make Money on Your Land
A wind lease is a great way for landowners to earn long-term passive income. Since you can earn money every year for a few decades, property owners have the option to take advantage of selling those payments for a lump sum. This allows you to avoid potential inflation that would affect the value of your payments while reducing the risk that those payments stop if the wind farm discontinues operating.
2) Continue Growing Crops & Grazing Livestock
Landowners can still farm (grow crops, graze livestock) while having wind turbines on their agricultural land, even though each lease agreement varies. If you are received a wind lease offer, it is important to conduct thorough due diligence on the wind lease offer and consult with a licensed local attorney before you sign any documents. To produce wind power properly, wind turbines must be placed far apart from each other, but they require very little land to actually operate.
3) Support Clean Energy Generation
Wind turbines do not require fossil fuels to operate. They do not release emissions that can pollute the air or water, either! Landowners can support the growth of clean energy in the United States by leasing land for wind turbines.
4) Wind Farms Create Local Jobs
Wind projects create hundreds of local jobs. According to the U.S. Bureau of Labor Statistics, wind turbine service technicians are the second fastest-growing job of the decade.
Cons of Wind Leases & Wind Easements
There are a few disadvantages of leasing land for wind farms, like the noise, the potential permanence of an easement, taxes from lease payments, and the fact that the wind developer can discontinue operations of the wind farm at any time, potentially halting lease payments.
1) Wind Turbines Can Be Noisy
Some consider the noise produced by wind turbines a nuisance. With a Noise Easement, a landowner may grant the developer the right to generate noise levels up to a certain decibel level. However, new technology has helped to decrease the amount of noise produced by wind turbines.
2) Many Wind Easements Are Permanent
Wind easements are commonly perpetual and remain with the land regardless of whether it is sold or leased. However, temporary easements that expire after a certain number of years may be negotiated.
3) Many People Consider Turbines unsightly
You can easily see wind turbines, especially across flat landscapes. Depending on your viewpoint, you may find these unsightly. Since wind farms require large amounts of land, many projects are placed in remote locations.
4) Taxes on Wind Lease Payments
Although landowners can make significant amounts of money by leasing their land for wind turbines, there are tax implications they should be aware of. Income earned from wind lease payments is taxed as ordinary income.
5) Wind Lease Payments Are Not Guaranteed
The wind developer reserves the right to stop production at any point. In some cases, energy companies have gone bankrupt, halting the rental payments paid to landowners. Contracts typically specify what will happen in these worst-case scenarios, so it is very important to review a wind lease agreement with a licensed attorney before you sign anything. For this reason, many landowners choose to sell their wind lease payments for a lump sum upfront. The best way to do this is on a competitive marketplace like LandApp.
How to Lease Land for Wind Turbines
Both wind leases and wind easements let landowners earn income from their property by partnering with wind energy developers. If you're interested in finding out if your property is suitable for a wind farm, get a free LandApp Property Report! The Wind Value Index Score rates your property's qualifications for a wind lease on a scale of 0 to 100. If you're interested in receiving offers after getting your free property report, you can list your land for lease for wind energy completely free on LandApp's marketplace with no obligations to accept any offers: