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New Mexico

If you are a New Mexico landowner with a powerline anywhere near your property, you may be getting some interest from Solar Developers to lease your property for a solar farm. While this may be a new concept to you, solar development has been steadily building across the country and due to recent legislation passing it is about to expand to New Mexico in a big way.

Here are a few things you should know before signing a lease with the first developer who knocks on your door.

Project Size Matters

The recent legislation that is promoting solar development is a Community Solar program which will probably be capped at 5 Megawatt project sizes – equivalent to roughly 40 Acres. This means a developer will NOT be able to build larger than that, so if you have a larger property, they won’t be able to lease more than a 40 acre footprint. Oftentimes, landowners are looking to maximize the rents for the land and would prefer developers to use a larger amount.

In the past two years there have been similar community solar initiatives in Colorado, Maryland, Illinois, Massachusetts, and right now Virginia and Pennsylvania are working through the process. The good news is that hopefully there has been a lot learned from the private and public sectors on how to successfully roll this out.

Prepare for Patience

It’s important to understand the development timelines for these types of projects. It would be great if you could decide you wanted to lease your property and then construction started the next week and you immediately could start collecting rent. Unfortunately, like most development these days, there are hoops developers need to jump through, including securing an interconnection and power purchase agreement with the local utility, permitting and construction. Typically this process takes between 18-24 months to complete.

While the legislation has passed, it is now up to the Public Regulation Commission to establish the final rules and regulations, which is estimated to be completed by late spring of 2022. The good news is, most qualified developers are comfortable beginning the development process and making investments now, so they will be ready for construction as soon as the program opens.

Pick the Right Partner

Unlike evaluating a buyer for your home where the goal is pretty simple and a short time frame, in this case finding a developer who can complete your project involves some shared risk and time. It’s very much a partner type relationship. Bottom line, it will take time, money, and experience to complete a development so you’ll want a partner with a positive track record in solar development. Given the national attention towards solar development in the past few years, there have been a lot of groups coming out of the woodwork who are just trying to jump into the game. We encourage you to be cautious and do your research prior to making any deals.

Timing is Key

While it is always prudent to explore all options and do the proper due diligence, there is a relatively short fuse on the opportunity to lease for solar. The biggest reason is the interconnection process with the utility. While the final regulations will vary, oftentimes the utilities accept applications on a first come first served basis. The power lines will quickly become saturated with projects and the chance of project success is significantly reduced regardless of the property suitability.

If you own a significant amount of land in New Mexico near power lines and think your land could be a good fit for a solar farm, we encourage you to start educating yourself about the recent policies in your area or find a broker like NLR Solar to help guide you through the process. NLR Solar exists to mediate the relationship between you, the landowner, and developers to ensure the most successful and smooth solar development process possible.

Contact us today for a free consultation and to discover if your land could be a prime candidate for this exciting new land use in New Mexico!


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