One Big Beautiful Bill Act Includes Rent Hike for Wind and Solar Projects on Federal Lands

The One Big Beautiful Bill Act (OBBBA) passed on July 4, 2025 will significantly increase annual rents and fees for new and existing wind and solar energy projects sited on federal public lands. On August 1, 2025, the Bureau of Land Management (BLM) updated its regulations to reflect the OBBBA’s rent provisions, but questions remain regarding how BLM will administer the new program.

Section 50302 of the OBBBA directs BLM to charge renewable energy projects acreage rent and capacity fees in exchange for use of federal lands. The basic framework is the same as under the previous regulations BLM promulgated in 2024 pursuant to which right-of-way (ROW) grantees pay acreage rent prior to electricity production and the greater of either acreage rent or capacity fees once the project is operational.

As under the previous rule, the OBBBA’s acreage rent calculation is based on cash rent data collected by the National Agricultural Statistics Service. For solar projects, the acreage rent rate will be the same as it was under the previous regulations. For wind projects, however, the “encumbrance factor” increased from 5 percent to “an amount determined by the Secretary, but not less than 10 percent.” The result is to at least double annual acreage rent for wind projects.

The capacity fee calculation is the more significant change. The previous regulations based the capacity fee on eight-factor formula that included large reductions for projects using American-made materials and those with union labor agreements. The new capacity fee rule is simpler: “3.9 percent of the project’s annual gross proceeds from the sale of electricity produced by the renewable energy project.” (Note this is down from 4.58 percent proposed in the original House version of the reconciliation bill.) We expect the new capacity fee will increase annual charges considerably relative to the previous regulatory framework, although by how much depends on project specifics.

The big outstanding question is how BLM will determine “the project’s annual gross proceeds from the sale of electricity” in a given year. The previous regulations required annual certified reports from ROW grantees upon which to base the capacity fee, but that provision is gone under the new regulations with nothing to replace it. The challenge is that rent is paid in advance of an upcoming year, but gross proceeds will not be known until the end of that year. Gathering annual revenue data from every operational renewable energy project on federal lands across the country and then retroactively truing up with grantees for over- or underestimated advance payments is no small administrative task. Without guidance in the new regulations, it may be up to developers to determine what revenue data are relevant and how and when to present them to BLM.

There may be additional guidance forthcoming, but for now the mechanics of BLM rent collection is not clear. Regardless, project owners can expect a rent hike later this year when 2026 bills come in.

Bell Kearns specializes in advising on the review and entitlement of large-scale renewable energy and battery storage projects. If you have any questions regarding this article, please feel free to contact the author at +1.415.471.2294 or reed@bell-kearns.com.