Hold onto your hats, cowpokes. You’ve entered the Wild West, where resources are scarce and justice scarcer, and the only thing you’re guaranteed at the end of a long day is a whole lotta saddle sores.
Okay, fine, we’re being overdramatic – but there is a land grab underway, and that’s no joke.
Unlike in the 1800s, though, when the pioneers struck westward to stake their claims, today’s land grab is for solar development projects. Sweet, sweet land parcels that might (probably won’t) get developed (again, unlikely) if a developer manages to get the correct permits (totally possible on alternate Tuesdays when the sun is in Virgo) and enact some light ritual sacrifice to boot.
In other words, it’s A Whole Thing.
And we’re over it.
Today, there’s a frenzy of prospectors trying to find suitable land to build solar farms.
At face value, this doesn’t seem like an impossible development plan: find viable sites with digital mapping tools, do a bit of digging re: nearby utilities, scramble to figure out who owns the property, find other additional information about your modern-day Promised Land, and be home by dinner.
It’s not that easy, of course. (Is it ever?)
If you can identify a potential site in your area of interest, and if you can determine that the site is near the substation of a transmission line owned by a renewable-friendly utility, and if you can hustle a deal with Farmer Mary – who may or may not be willing to sell her property in the interest of a solar farm – we can pretty much guarantee you’re still not getting home for Taco Night.
Even with all the planning possible, there’s not enough time, not enough good intel, and not enough grease in the works to make this an efficient process. There aren’t even enough suitable parcels – those that meet the stringent standards to create clean energy, typically large pieces of land that need to be near the power grid. Hence, too many people are sprinting toward too little reward.
Like we said: a modern-day land grab.
Yeehaw, pardner.
In response to this reality, like a mushroom in the night, a new land development process has sprung up. Companies that follow it seek to gather as much potentially viable property as possible, package them up, and sell them to whoever’s buying.
The target buyer? Any entity (usually large solar/renewable companies or Major Traditional Power Companies with lots of clout) looking to develop the land, build solar infrastructure, manage the project, and deliver those megawatts we’re all looking for.
The American power grid is always hungry, y’all, and the person who can feed it successfully is nothing less than the contemporary prospector striking gold. You know what they say, with great energy requirements comes great construction of land development projects that will be a fun stress-management exercise from start to finish.
The big companies also have people out there searching, of course. They entertain those smaller companies – the “bird-doggers,” if you will – to increase their opportunities to complete additional successful clean energy projects.
That’s all well and good until you look more closely at the actual business model. It involves a whole bunch of potential “wrapped up in butcher paper and tied with a pretty bow,” then sold off with literally no proof that anything inside the package is even a tiny bit viable … but no one wants to question the process for fear of missing out or looking gullible.
It reminds us of Anthony Bourdain explaining collateralized debt obligation with a profoundly compelling fish stew metaphor. We’ve watched it fifteen times, and we still don’t know what the heck he’s talking about. If there’s anything you take from this clunky meta-metaphor, it’s this: people’s intentions might be good, but something is seriously wrong.
And no one seems to know what to do about it.
Sadly, most potential land opportunities packaged and sold up the food chain to big renewable energy developers will never see the light of day.
See what we did there? Pun intended, suckaz.
No, not you. You’re not a sucker. Everyone buying these neatly packaged parcels, though? They’ve been had.
See, the idea of potential parcels might seem like a good one, but it suffers from a flaw as fatal as Achilles’ heel. To wit: just because Farmer Bob says yes to whatever deal is proposed to him, just because his land is near a substation and transmission line, and just because the pertinent utility company is also willing to strike a deal … well, frankly, that means jack-all.
Even when all the stars align, you’re not guaranteed a successful project or even an approved plan. As a matter of fact, the odds are stacked against this occurring. Why?
Because the environmental due diligence required before starting the undertaking usually reveals a dealbreaker or many. No matter how promising that parcel looks, many discoveries could axe the endeavor before it even gets off the runway. They involve too much risk to make any business sense to proceed.
In other words, the juice ain't worth the squeeze.
In the past, prominent developers have taken what we might call the Silicon Valley Approach, perfected back in the 90s. Invest in ten companies knowing that eight will fail – but the other two would more than make up for it.
The problem here is that with every month that goes by, there are fewer and fewer viable land parcels that will pass the environmental due diligence sniff test. It takes time (months you don’t have) and money (dollars you’re throwing into a black hole) to have the environmental consultants finally complete their review to tell you that there’s too much risk to proceed. The environmental standards work hard, but the environmental consultant’s ability to drag the approval process on for weeks works harder.
The compliance process and inevitable delays are like kryptonite for solar land development projects, with opportunity costs mounting all the time. Each time you sink resources into one proposed project approach, you waste time you could spend prospecting elsewhere.
In the end, only about 10 percent of land that is identified by the bird-doggers and sold to the actual developers has project success.
Yikes.
Now we’re not even getting 20 percent. It’s down to one out of ten and shrinking, and buyers are losing faith.
No, really, there’s something we can do here. A shockingly simple something, actually.
Check it:
If the bird-doggers searching for viable solar-ready parcels could submit their packaged deals with an attached environmental desktop report, their customers – the more prominent developers – would readily pay more for the good stuff. The bigger developer would receive all the risks and regulations for the proposed project before they are hit with a surprise cost or missing permit down the road. It would be like buying a used car with a CarFax attached.
Forget hoping and praying and light ritual sacrifice! Instead, you could simply find out at the beginning whether there were any roadblocks to a successful solar project. Whether that’s wetlands, tribal land restrictions, endangered species, or anything else, you can find out before spending unwarranted resources and proceed with a comprehensive plan specified for your site and land use. Receiving additional information about risks, an endangered species map, a wetlands map, or a list of environmental permitting requirements are the improved compliance efforts that will propel developers out of the Wild West and into the modern age. No more flipping a coin and hoping the painful environmental review of your development plan works out. Instead, you can move on to greener pastures that much more quickly.
Yes, please.
If that sounds like A Pretty Sweet Deal, we’re with you. More to the point, we’d love to tell you all about it. Please feel free to reach out to our team for a demo today!
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