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Berkshire Hathaway solar lease letter

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My parents got a letter from Berkshire Hathaway inquiring about leasing their property for a solar installation.† It wasn't bulk mail - it was first class mail, was hand signed and had their tax lot information on it.

Has anybody heard of one of these letters?† Is it for real?† They live in the Willamette Valley of Oregon, and while they have 10 Acres that is very flat (and is zoned farm use) I'm not sure why you would lease land in western Oregon for solar, considering the amount of cloud cover we have annually.† Eastern and southern Oregon, maybe - a lot of sunshine.

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rated:
The sunniest parts of Oregon are also the most remote. Maybe it matters more to them to be close to the grid?

rated:
Interesting. †First question might be - have their neighbors in OR received anything similar, from Berkshire or from others talking up the same thing? † When I saw "Oregon" in your post I immediately assumed maybe a lot of moisture and fog, and the rest of your post sort of confirmed it, so that's a question mark. †

Any large server farms being planned for that area, that you know of? † Over the last few years I've read of some server farms being planned to be co-located with solar panel "farms". †Both for the "political correctness" value and for the actual economic value... because of course †energy is way expensive in some parts of the West.

Any multinationals (Chinese or others) planning big battery factories there (a la Tesla)? †Not sure that makes a lot of sense because Nevada has a heck of a lot more sun then most of OR - I would assume.

Kind of funny in a way because it was not that many years ago when it was a big news item when Buffet bought CSX which was partly a play on coal and to some degree oil, which largely did not happen oil plummeted and coal has been largely displaced by natural gas...

So, a long-winded way of saying that I don't really have an answer for you.

rated:
jerosen said:   The sunniest parts of Oregon are also the most remote. Maybe it matters more to them to be close to the grid?
††
Depending on the size of the solar farm, proximity to a substation and transmission line is key to making an installation cost effective. †The cost to build or a transmission line can be in the millions per mile.

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bluegreenturtle said:   †Is it for real? †
I strongly suggest you independently verify whatever contact information is offered in the letter before providing any response or personal information - make sure you know who the letter really came from and ensure it's not just someone pulling a scam using the BH name. †

ETA:† Interesting pro/cons of leasing discussion in this law firm's newsletter: †http://www.hhk.com/files/2614/7584/4631/October2016.pdf

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We will explore.† Mom's already voted "no" as it looks like the terms are 20 year lease.† The land and house is worth the better part of $1mm for a sale and they will probably want to sell before they die, which is almost certainly within 20 years.

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Why would Warren himself do this? BH is a TINY firm by employee count. Warren / BH owns companies that DO stuff -- sell candy, insure people, bank, haul stuff over rails, etc. I can't say I know of anything that the parent company BH does other than manage things, collect money and invest. That throws up a big yellow caution flag in my mind... If Warren wanted to have a solar farm, I'd think he'd do it through the Acme solar farm subsidiary of BH.

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bluegreenturtle said:   They live in the Willamette Valley of Oregon, and while they have 10 Acres that is very flat (and is zoned farm use) I'm not sure why you would lease land in western Oregon for solar, considering the amount of cloud cover we have annually.† Eastern and southern Oregon, maybe - a lot of sunshine.
As little as five years ago you needed lots of sun, but the current panels don't, and can garner a decent percentage even with clouds, although certainly not dark clouds.
Mom's already voted "no" as it looks like the terms are 20 year lease. The land and house is worth the better part of $1mm for a sale and they will probably want to sell before they die, which is almost certainly within 20 years.
What about converting the property into two parcels, then your parents could later sell the house and some surrounding land, while the lease on the farmland section could continue.

You could plant a screen of trees between the two and nobody would ever know it's there. Itís not like it's an oil refinery.

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debentureboy said:   Why would Warren himself do this? BH is a TINY firm by employee count. Warren / BH owns companies that DO stuff -- sell candy, insure people, bank, haul stuff over rails, etc. I can't say I know of anything that the parent company BH does other than manage things, collect money and invest. That throws up a big yellow caution flag in my mind... If Warren wanted to have a solar farm, I'd think he'd do it through the Acme solar farm subsidiary of BH.
Berkshire Hathaway is already into wind and solar farms. They are heavily into wind (about 40% of the electricity used in Iowa is from wind, mostly due to Berkshire Hathaway), and quickly ramping-up the solar.

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HBaxx - Maybe we're both right... and I should have Googled it before posting. BSE -- Berkshire Hathaway Energy is into these sorts of things. So not really BH, but a subsidiary.

rated:
HBaxx said:   
debentureboy said:   Why would Warren himself do this? BH is a TINY firm by employee count. Warren / BH owns companies that DO stuff -- sell candy, insure people, bank, haul stuff over rails, etc. I can't say I know of anything that the parent company BH does other than manage things, collect money and invest. That throws up a big yellow caution flag in my mind... If Warren wanted to have a solar farm, I'd think he'd do it through the Acme solar farm subsidiary of BH.
Berkshire Hathaway is already into wind and solar farms. They are heavily into wind (about 40% of the electricity used in Iowa is from wind, mostly due to Berkshire Hathaway), and quickly ramping-up the solar.

††
37% of the power Iowa generates comes from wind. †I don't know of any percentages for how much wind power they consume

rated:
HBaxx said:   
bluegreenturtle said:   They live in the Willamette Valley of Oregon, and while they have 10 Acres that is very flat (and is zoned farm use) I'm not sure why you would lease land in western Oregon for solar, considering the amount of cloud cover we have annually.† Eastern and southern Oregon, maybe - a lot of sunshine.
As little as five years ago you needed lots of sun, but the current panels don't, and can garner a decent percentage even with clouds, although certainly not dark clouds.
Mom's already voted "no" as it looks like the terms are 20 year lease. The land and house is worth the better part of $1mm for a sale and they will probably want to sell before they die, which is almost certainly within 20 years.
What about converting the property into two parcels, then your parents could later sell the house and some surrounding land, while the lease on the farmland section could continue.

You could plant a screen of trees between the two and nobody would ever know it's there. Itís not like it's an oil refinery.

††
Good idea, although the type of conversion we are looking into is into residential lots.† If we can develop all 10 acres, that's 40+ homes.† FMV as is is around $750k, 1/4 acre lots probably would go for $100k.† We did this with my childhood home (unfortunately) and turned it into a 98 unit apartment complex.† Sad, can't even figure out where our house was, much less where I used to play, but they made pretty good money on the deal. †

rated:
debentureboy said:   Why would Warren himself do this? BH is a TINY firm by employee count. Warren / BH owns companies that DO stuff -- sell candy, insure people, bank, haul stuff over rails, etc. I can't say I know of anything that the parent company BH does other than manage things, collect money and invest. That throws up a big yellow caution flag in my mind... If Warren wanted to have a solar farm, I'd think he'd do it through the Acme solar farm subsidiary of BH.
††
BH owns the local utility monopoly. †Pacific Power. †https://www.berkshirehathawayenergyco.com/news/oregon-clean-electricity-and-coal-transition-plan-becomes-law

However BH was a major supporter in NV screwing all the folks with rooftop solar, too. †They pushed for removing net metering, so they will NEVER be able to break even. † They buy power for 20% of what they sell it for now. †No grandfathering either. † Apparently power monopolies have been really profitable for BH. †Oddly enough they aren't in the deregulated markets.

edit to add: †OP didn't say BUFFETT signed it - just that it was hand signed by someone. †

rated:
bluegreenturtle said:   
HBaxx said:   
bluegreenturtle said:   They live in the Willamette Valley of Oregon, and while they have 10 Acres that is very flat (and is zoned farm use) I'm not sure why you would lease land in western Oregon for solar, considering the amount of cloud cover we have annually.† Eastern and southern Oregon, maybe - a lot of sunshine.
As little as five years ago you needed lots of sun, but the current panels don't, and can garner a decent percentage even with clouds, although certainly not dark clouds.
Mom's already voted "no" as it looks like the terms are 20 year lease. The land and house is worth the better part of $1mm for a sale and they will probably want to sell before they die, which is almost certainly within 20 years.
What about converting the property into two parcels, then your parents could later sell the house and some surrounding land, while the lease on the farmland section could continue.

You could plant a screen of trees between the two and nobody would ever know it's there. Itís not like it's an oil refinery.

††
Good idea, although the type of conversion we are looking into is into residential lots.† If we can develop all 10 acres, that's 40+ homes.† FMV as is is around $750k, 1/4 acre lots probably would go for $100k.

If you're just looking to maximize returns, you could try and snag a contract for growing legal cannabis, as it has one of the highest returns per acre right now. However, both are very heavily investment-laden enterprises compared to a solar farm lease.

rated:
We have already considered it as the land is prime farm soil and is covered with greenhouses growing ground cover already. The barn is a potting house and we have so many growing supplies from decades of nursery work. My father has a master's degree in agriculture to boot and 50 years growing experience, there would be no start up investment from us if we chose to do the natural light growing path. The land, even, is a flag lot, and doesn't have any public facing land. Water is from a well on the land. All in all perfect for pot growing. However, until the feds calm down, I've advised them to steer away from it. Civil asset forfeture is no joke these days; the cops literally take more money than is stolen every year in this country. My folks have significant assets that are not just this land, and it would be a tragedy if the government came and stole it just because they were operating a totally legal (in our state) grow operation. It's literally the family fortune and my retirement.

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