Michigan now allows land enrolled in the Farmland and Open Space Preservation Program, also known as PA 116, to be used for solar farm and commercial solar panel array purposes. PA 116 is a tax credit program for the preservation of land in Michigan from development and often used by Michigan farmers to enhance farming income. PA 116 works to preserve farmland by offering tax incentives to farmers willing to participate. The land must remain in agricultural use for a minimum of 10 years and is not developed for any non-agricultural use. Landowners can then attain some income tax benefits.
However, PA 116 contains restrictions that did not allow for commercial solar panels until recently.
Solar farms will be allowed for new or current PA 116 agreements. If you currently have a PA 116 agreement and amended agreement will need to be reached with the State of Michigan and addressed in the solar farm lease or easement agreement. We strongly recommend that Michigan farmers consult with Shinners & Cook prior to entering into an agreement with an energy company to place commercial solar or wind on their farmland. Solar and wind lease or easement agreements are negotiable and often we can obtain significantly higher compensation and increased property protections for farmers.
If you own farmland in PA 116 or are considering a solar lease or easement, please contact the real estate attorneys at Shinners & Cook, P.C. to assist you with resolving your issues.