Did the 2025 tax credit changes lower what I will be paid for a solar or wind lease?

Not by themselves, and not for every project. If a project is already operating on or near your land, your lease is a signed contract and the credit changes do not touch it. For a lease that is still an option, what matters is whether the project behind it began construction by July 4, 2026. Projects that did keep the federal credits; projects that start later do not, which makes them less likely to get built.

How do I tell which project bucket my lease is in?

There are three. One, an operating project already paying on or near your land: unaffected. Two, an option or lease tied to a project that began construction by July 4, 2026 (safe-harbored): good odds, but ask the developer to document it. Three, a brand-new option signed after July 4, 2026: no federal credit for that project, so lower probability and a longer timeline. Almost every new offer today is bucket three.

A developer just offered me a new solar lease. Does the project still get the tax credit?

A project that starts construction after July 4, 2026 does not get the federal clean-electricity credit. The power it sells has to fetch a materially higher price for the numbers to work, so it is less likely to be built and will take longer if it is. That does not make a new offer bad, but it means you scrutinize the option length, the payment escalators, the creditworthiness of the developer, and the decommissioning security, not just the dollars per acre.

Should I have a lawyer read a lease or a letter of intent first?

Yes. This article is general information, not legal or tax advice, and the federal rules moved twice in a single year. An energy lease is a long-term contract with real tax consequences. Have a qualified attorney read anything before you sign it, including a letter of intent.

For farmland owners

What the 2025 federal energy law means for your farmland

August 2, 2026 · AgriTerra · For owners in Ohio, Indiana, and Iowa

Say a developer has offered you $1,000 an acre a year for a solar lease, or knocked on the door about wind. Then you read that the federal tax credits "ended." The honest answer to "does that change my offer?" is: it depends entirely on which of three buckets the project falls in. Most owners can figure out their bucket in about two minutes. Here is how.

Read this first

This is general information, not legal, tax, or financial advice. An energy lease is a long-term contract with real legal and tax consequences that turn on your own situation. Talk to a qualified attorney or advisor before you sign anything, including a letter of intent.

The law, in one paragraph

The One Big Beautiful Bill Act (Public Law 119-21) was signed on July 4, 2025. It ends the federal clean-electricity tax credits (sections 45Y and 48E) for wind and solar projects placed in service after December 31, 2027, with one large exception: a project that began construction by July 4, 2026 keeps the credits, and then has roughly a four-year window to finish, into 2029 or 2030. That single date, July 4, 2026, is the hinge the whole thing turns on. It says nothing about your land specifically. It sorts every project into one of three buckets, and your lease rides along with whichever bucket its project is in.

Which of the three buckets is your project in?

You do not need to track tax law. You need to know one thing about the project on the other side of your lease: has it started, is it safe-harbored, or is it brand new? Each bucket below tells you how to find out and what it means for you.

Bucket 1

A project already operating on or near your land

How to tell if this is you: panels or turbines are up and running, and you are already receiving payments under a signed lease.

What it means: nothing changes. Your lease is a signed contract, and the credit changes do not reach back and touch payments on a project that is already built. There is nothing you need to do.

Bucket 2

An option or lease with a project that began construction by July 4, 2026

How to tell if this is you: you signed an option or a lease some time ago, and the developer says the project is moving, permitted, or under construction. This is the "safe-harbored" bucket.

What it means: good odds. The safe-harbored solar pipeline is large, roughly 216 to 240 gigawatts (per Wood Mackenzie), enough to keep building through about 2030. But "good odds" is not "done." Two things to do: ask the developer to document their safe-harbor position in writing, and watch the completion-window clock, because a safe-harbored project still has to be finished inside that four-year window to keep the credit.

Bucket 3

A new option signed after July 4, 2026

How to tell if this is you: a developer is offering you a lease now, and there is no existing project behind it that already broke ground. This is where essentially every new offer lands today.

What it means: the project behind a new option gets no federal credit. To pencil without it, the power the project sells has to fetch a materially higher price, so the odds it actually gets built are lower and the timeline is longer. That does not make a new offer bad. It means the dollars per acre are the last thing to look at, not the first. Look hard at the option length, the payment escalators, the developer's creditworthiness, and the decommissioning security, which is the money set aside to remove the equipment and restore your ground if the project stalls or the company folds.

The rules shifted twice in one year

One more reason to move carefully: the fine print on what counts as "began construction" has already changed twice. In August 2025, IRS Notice 2025-42 tightened the rules by removing the 5 percent cost safe harbor for utility-scale wind and solar over 1.5 megawatts. Then, on June 6, 2026, a federal court in Washington, D.C. vacated that notice on procedural grounds, with an appeal still possible. You do not need to follow the back-and-forth. The point is simpler: the ground under these deals moved twice in twelve months, which is exactly why you want a lawyer to read anything before you sign it.

Honest note: wind is not solar

The three buckets apply to both, but the odds are not the same. The pool of wind projects that locked in the credit before the deadline is far smaller than the solar pool. And in Iowa, new-build wind has nearly stopped: 58 of the state's 99 counties now restrict it, wind projects completed fell from 12 in 2020 to 1 in 2024, and one major utility canceled a northwest Iowa project in December 2025. None of that means a wind lease is worthless. It means a new wind offer deserves more skepticism than a new solar offer, and a much harder look at whether anyone would actually build it where you are.

Questions to ask before you sign a new lease

If you are in bucket 3, this is the list that matters more than the price. Print it and take it to the developer, and to your attorney.

Can you document that the project has begun construction, or is this a new project that will not qualify for the federal credit?
How long is the option period before you know whether the project is going ahead, and what are you paid during it?
What are the payment escalators over the life of the lease, and are they fixed or tied to an index?
Who is the counterparty actually signing, and what is their financial standing if the project stalls?
What decommissioning security is posted, in what form, and who is invoiced to remove the equipment and restore the land?
Which taxes shift to you, and does the lease obligate the developer to cover any change in how the land is assessed?
Has a qualified attorney reviewed the full document, including the letter of intent?

How AgriTerra handles this in a report

When an AgriTerra report shows a solar or wind income estimate, it now carries the lease-vintage note above and a county-level policy check, so the number reflects whether a project could actually be built and permitted where your land is, not just what the resource is worth in the abstract. You can read exactly how that gate works on our methodology page: how we check whether a lease can actually be built. And if you want to see the sourced read for your own parcel, that is what the Decision Report is for.

The standing recommendation does not change with the tax law: have a qualified attorney or advisor review any lease, option, or letter of intent before you sign. Ohio State University Extension's Farm Office energy-law library has plain-language guides and a solar-leasing checklist that are a good place to start reading.

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