INTRODUCTION.
Although wind and solar project development in the U.S. experienced record-breaking sales in recent years, headwinds are anticipated to increase. Several challenges continue to delay deployment, such as lack of sufficient of grid capacity and long interconnection queues, permitting and siting challenges, high interest rates, and lingering supply chain issues.1 A new federal administration continues to seek opportunities to create roadblocks for clean energy project development by freezing federal funding and threatening to end the Inflation Reduction Act and Bipartisan Infrastructure Law.2 Threats to impose tariffs and increase taxes on imports also create concern for project development. Despite such challenges, the U.S. increasingly needs more clean energy development as demand from data centers rapidly escalates requiring significant growth in electrical generation and storage.3
Remaining optimistic, the Energy Information Administration (EIA) estimates 63 gigawatts (GW) of new utility-scale electrical generation capacity will be added to the U.S. electrical grid in 2025.4 Such amount would represent a nearly 30% increase from 2024, with solar and battery storage collectively accounting for 81% of the anticipated total electrical capacity additions.5 The EIA further anticipates 2025 will result in approximately 32.5 GW of new utility-scale electrical capacity to be added to the U.S. grid by solar project development in 2025, with an additional 7.7 GW of capacity to be generated from wind projects.6
While the federal government continues to threaten policies to reduce federal funding and increase project costs by imposing tariffs, many states have enacted moratoriums on clean energy project development, revised zoning codes making development impractical, and statutes requiring specific language to be included in wind and solar land contracts, such as leases and easements. This overview is intended to provide a quick reference guide with respect to the various state statutory requirements for language to be included in wind and solar project leases and easements. Updates will be forthcoming as additional states enact such requirements, and as relevant case law interprets such statutory requirements or provides commentary on the repercussions of noncompliance.
We hope you find this overview useful and welcome your feedback.
Puanani E. Norwood
Office Managing Partner – Los Angeles
ALABAMA.*
Alabama does not have state specific requirements for leases or easements conveying an interest in real property located in Alabama to be used for wind or solar project development.
ALASKA.
Alaska does not have state specific requirements for leases or easements conveying an interest in real property located in Alaska to be used for wind project development. However, in Alaska, an instrument creating a solar easement, defined as an easement obtained for the purpose of protecting the exposure of property to the direct rays of the sun, must include certain language discussed below.7
- The vertical and horizontal angles, expressed in degrees, at which the solar easement extends over the real property subject to the solar easement. Such requirement may be satisfied by the following language:
"Any obstruction to the free flux of solar energy across the [subject property] is prohibited throughout the entire area of the [subject property] which shall exist vertically and horizontally 360° from any point where any portion of the [solar facilities] are located at any time and for a distance from each portion of such facilities to the boundaries of the [subject property]."
The requirement does not prevent the parties to the agreement from including language that merely limits, rather than prohibits, potential obstruction. For example, in our experience, we have seen parties agree to height and distance requirements for future improvements to, or installations upon, the real property where the grantee's consent would be required before the grantor could make such improvements or installations. Such agreements might be agreed upon for any improvements or other installations within a distance from the project's facilities that would create a violation of any setback requirements in applicable zoning and safety standards or improvements that could cast a shadow across the solar array.
- Any terms or conditions under which the solar easement
is granted or under which it will be terminated. The terms
of, or conditions to, the grant of easement rights should be
included in such agreement, as well as a recorded memorandum
thereof to give notice to third parties of such grant and the
applicable conditions or restrictions, if any, thereto.
Notwithstanding the foregoing requirement, provisions related to
compensation to be paid under such agreement may (and should) be
omitted from any recorded memorandum of the agreement.
Likewise, a provision describing the terms and conditions upon which the easement may be terminated is also required by statute and should also be included in the recorded memorandum. Generally, such easements provide that the grantee may terminate the agreement at any time and for any reason upon written notice to the owner of the encumbered property. Conversely, such owner will be prohibited from pursuing termination of the easement if the grantee's solar facilities are installed on the property. In such instance, the owner will be limited to recovering damages in the event the grantee breaches any terms of the easement.
- Any provisions for compensation of the owner of the
property benefiting from the solar easement in the event of
interference with the enjoyment of the solar easement, or
compensation of the owner of the property subject to the solar
easement for maintaining the solar easement. The Alaska
statute necessarily requires a description of the property subject
to the solar easement, which is otherwise required to record the
easement of record in the public records for the county where the
encumbered real property is located. Based on our experience in
other states, we frequently see easements that fail to include a
description of the property benefiting from an easement (where even
more expressly required by statute). Often, such agreements will
state that there is no real property benefiting from such
agreement; however, solar projects are completely integrated
projects. That is, the facilities located on one parcel of property
are dependent upon and integrated with additional facilities
located on other parcels of property within the project site such
that the electrical energy generated by the project can be
collected at the project's substation. Thus, each parcel of
real property within a project site benefits from the easements
likewise encumbering other parcels of real property so that, by way
of example, the electrical energy produced or generated by
facilities on one parcel of property can be transported across
other properties in order to reach the project's substation and
later the point of interconnection so such electrical energy can be
disbursed for consumer use.
Here, in addition to a description of subject property, the Alaska statute would require a description of the benefited property, which could be addressed by including language such as:
"The rights granted under this Agreement shall inure to the benefit of all real property upon which any solar facilities are installed for [grantee's project]."
The Alaska statute expressly requires solar easements to include compensation terms due to the owner of the fee property encumbered by the solar easement (i.e., the subject property) for maintaining the solar easement area. Terms are also required to be set forth in the agreement with respect to compensation due to the solar project (i.e., the grantee under the solar easement) in the event of interference with its rights granted pursuant to the solar easement. Notwithstanding the foregoing, typically, provisions related to compensation to be paid under such agreement may (and should) be omitted from any recorded memorandum of the agreement.
There is currently no applicable case law in Alaska interpreting the applicability of the cited statute or remedies in the event of noncompliance.
ARIZONA.
Although Arizona does not have state specific requirements for leases or easements conveying an interest in real property located in Arizona to be used for wind or solar project development, the state does require that any covenant, restriction or condition contained in any deed, contract, security agreement or other instrument affecting the transfer or sale of, or any interest in, real property entered into on or after April 17, 1980, which effectively prohibits the installation or use of a solar energy device is void and unenforceable.8
Arizona specifically defines a solar energy device, including distributed energy generation systems, as a system or series of mechanisms designed primarily to provide heating or cooling, or to produce electrical or mechanical power, to provide solar daylighting or to provide any combination of the foregoing by means of collecting and transferring solar generated energy into such uses either by active or passive means, which may also have the capability of storing such energy for future utilization.9 Passive systems (i.e., designs utilizing a building's site, climate and materials to lower energy usage by taking advantage of natural heat flow to distribute warmth without the use of mechanical devices) must clearly be designed as a solar energy device such as a trombe wall and not merely a part of a normal structure such as a window.10
There is currently no applicable case law in Arizona interpreting the applicability of the cited statute or remedies in the event of noncompliance.
ARKANSAS.*
Arkansas does not have state specific requirements for leases or easements conveying an interest in real property located in Arkansas to be used for wind or solar project development.
CALIFORNIA.
California does not have state specific requirements for leases or easements conveying an interest in real property located in California to be used for wind project development. However, California law does specify that any solar easement, defined as a right to receive sunlight across the real property of another for any solar energy system, must contain certain language discussed below.11
- A description of the dimensions of the easement expressed in measurable terms, such as vertical or horizontal angles measured in degrees, or the hours of the day on specified dates during which direct sunlight to a specified surface of a solar collector, device or structural design feature may not be obstructed, or a combination of these descriptions. Language expressing as vertical or horizontal angles measured in degrees wherein obstruction is prohibited or limited may be satisfied by the following language:
"Any obstruction to the free flux of solar energy across the [encumbered property] is prohibited throughout the entire area of the [encumbered property] which shall exist vertically and horizontally 360° from any point where any portion of the solar facilities are located at any time and for a distance from each portion of such facilities to the boundaries of the [encumbered property]."
- The restrictions placed upon vegetation, structures,
and other objects that would impair or obstruct the passage of
sunlight through the easement. Typically, parties include
language agreeing to height and distance requirements for future
improvements to, or installations upon, the real property where the
project grantee's consent would be required before the
landowner could make such improvements or installations. For
example, any improvements or other installations within a distance
from the project's facilities that would create a violation of
any setback requirements in applicable zoning and safety standards,
or improvements that could cast a shadow across the solar
array.
- The terms or conditions, if any, under which the
easement may be revised or terminated. Any terms or conditions to
the grant of easement rights should be included not only in the
easement, but also in a recorded memorandum thereof in
order to give notice to third parties of such grant and the
applicable conditions or restrictions, if any, thereto. Likewise,
any revisions to the easement that could impact the rights of third
parties should also be recorded (e.g., revisions to the length of
term of the easement, or to the legal description of the encumbered
real property). Here, a statement as to the terms and conditions
upon which the easement may be revised, could simply state that the
agreement may be amended by mutual agreement of the parties thereto
evidenced in writing.
Because a provision describing the terms and conditions upon which the easement may be terminated is also required by statute, such provision and any revision thereto should likewise be included in both the agreement and in a recorded memorandum thereof. Generally, such easements provide that the grantee may terminate the agreement at any time and for any reason upon written notice to the owner of the encumbered property. Conversely, such owner will be prohibited from pursuing termination of the agreement if the grantee's energy project facilities are installed on the property. In such instance, the owner will be limited to recovering damages.
California law also specifies that any covenant, restriction, or condition contained in any deed, contract, security instrument, or other instrument affecting the transfer or sale of, or any interest in, real property, and any provision of a governing document that effectively prohibits or unreasonably restricts the installation or use of a solar energy system is void and unenforceable.12 Reasonable restrictions imposed on solar energy systems include restrictions that do not significantly increase cost of such systems or significantly decrease the efficiency of such systems.13
There is currently no applicable case law in California interpreting the applicability of the statute or remedies in the event of noncompliance.
COLORADO.
Colorado law requires that any solar easement, defined as a right to receive sunlight across the real property of another for any solar energy system, must contain certain language discussed below.14
In Colorado, an easement obtained for the purpose of protecting a property's exposure to the direct rays of the sun must be created in writing and is subject to the recording requirements for other conveyances of real property. An instrument creating a solar easement shall include, but the contents shall not be limited to, the following:
- A description of the vertical and horizontal angles, expressed in degrees together with any pertinent hourly, daily, or seasonal variations thereof, and measured from the site of the solar energy device, within which the solar easement extends over the real property subject to the solar easement, or any other description which defines the three-dimensional space or the place and time of day in which an obstruction to direct sunlight is prohibited or limited;
- Any terms or conditions or both under which the solar easement is granted or will be terminated;
- Any provisions for compensation due to the owner of the property benefiting from the solar easement in the event of interference with the enjoyment of the solar easement or compensation due to the owner of the property subject to the solar easement for maintaining the solar easement; and
- The restrictions placed upon vegetation, structures, and other objects which would impair or obstruct the passage of sunlight through the easement.
In Colorado, a wind energy right (i.e., the right to capture and use the kinetic energy of the wind) is not severable from the surface estate; however, like other rights to use the surface estate, a wind energy right may be created, transferred, encumbered, or modified by agreement.15
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Footnotes
1. World Resources Institute, US Clean Power Development Sees Record Progress, As Well As Stronger Headwinds, (February 21, 2025), https://www.wri.org/insights/clean-energy-progress-united-states.
2. Reuters, Trump aims at Biden's Inflation Reduction Act: EVs, clean energy and manufacturing, (December 20, 2024), https://www.reuters.com/world/us/trump-aims-bidens-inflation-reduction-act-evs-clean-energymanufacturing-2024-12-20/.
3. World Resources Institute, US Clean Power Development Sees Record Progress, As Well As Stronger Headwinds, (February 21, 2025), https://www.wri.org/insights/clean-energy-progress-united-states.
4. EIA, Preliminary Monthly Electric Generator Inventory, (February 26, 2025), https://www.eia.gov/electricity/data/eia860m/.
5. EIA, Solar, battery storage to lead new U.S. generating capacity additions in 2025, (February 24, 2025), https://www.eia.gov/todayinenergy/detail.php?id=64586.
6. Id.
7. Alaska Stat. § 34.15.145.
8. Ariz. Rev. Stat. Ann. § 33-439.
9. Ariz. Rev. Stat. Ann. § 44-1761.
10. Id.
11. Cal. Civ. Code § 801.5.
12. Cal. Civ. Code § 714(a).
13. Id. at (b).
14. Colo. Rev. Stat. § 38-32.5-100.3, Colo. Rev. Stat. § 38-32.5-102.
15. Colo. Rev. Stat. § 38-30.7-103(1).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
