What does development look like? What are the steps involved and how long can it take?

This is the first step of development. Let’s say Hexagon Energy found your property, and both parties are interested in pursuing this opportunity. The first thing we would do is sign an Option for a Solar Site Lease. The option, among many things, allows the developer to gain some rights to the property and gives us assurance that another company cannot come in and start developing the land. If there are currently other uses for your land, such as farming, you can continue executing those uses while the option period is in effect. The option is not the final lease that will be in effect upon the construction of the project.

During the negotiation process for site control, you and Hexagon will be discussing two separate documents: an Option for a Solar Lease and a Solar Lease. There are several key differences between these documents. The option for a solar lease is the document that is signed before Hexagon begins the study process on the property. It provides Hexagon with site control of the property, allowing us to access the property when necessary to perform studies on it, and does not allow other companies to develop the land in the meantime. You are, however, allowed to continue executing other tenant leases or uses of the land during the option period. The option also outlines the yearly option fees that you will be receiving. These are one-time payments that will be negotiated and made annually to you. While the option fees are not directly tied to acreage like the lease payments are, they are negotiable. The solar lease is a document that is only signed upon the end of the formal development process, once the project is ready to be constructed. This document will outline the terms of the lease that will be in effect for the lifetime of the project. It also outlines the lease rate that you will be receiving per acre per year. We recommend that both documents be discussed with an attorney before signing.

Our options come in 12-month periods, with 4 extensions beyond the first option period. That means your property can be under the option for a total of 5 years. Each year that the property is under the option you are paid an annual “option fee” that is negotiated upon. The reason the option period is so long is because the development process can take a while, between study periods, interconnection, and permitting, and we want to give ourselves time to guarantee success of the project in the long-term.

In order to guarantee that the site is suitable for solar, we do various environmental, cultural, and historical studies on the property. All of these are paid for by Hexagon Energy.

In order for the solar field to provide energy to the grid it has to be interconnected with the electrical utility that is in your region. This requires Hexagon to apply for an interconnection study with the utility company. During this period the utility company researches what types of upgrades may need to be done to existing infrastructure to support this project. This process could last a year or more depending on the backlog of projects in that area for the utility company to study.

Often the most difficult step in this process is permitting the project with the county. This process requires researching zoning ordinances in the county to find out what type of land is allowable for solar in the county, or, if necessary, rezoning the property. In addition, most counties require solar projects to apply for a special use or special exception permit. This process includes working with the county and neighbors of the property to hear their feedback and amend the project plans appropriately. After the application for the project is submitted, the project has to be heard in front of the planning commission, followed by the Board of Supervisors, who ultimately decides whether the project is granted a permit or not.

Once the project receives a permit, interconnection studies are complete, and environmental/historical studies are complete, Hexagon works with experienced EPC firms to finalize the site plans and begin construction. Once construction begins, that is when your site lease is executed and you begin receiving your lease rate/acre/year every year for the duration of the lease. The lease is typically 25 years with 3 extension periods of 5 years. At this point, all other uses of your property must be concluded and all other leases need to end for this to begin.