By Steve Shropshire, AttorneyIn the last few years, Oregon has experienced a boom in solar energy projects. This is especially true in Central Oregon, where landowners have recently constructed projects just outside of Bend, Redmond, and Prineville. With state and federal incentives in place, solar energy development is not likely to slow any time soon.
Oregon land use law allows developers to construct solar installations on rural land with relative ease. This includes irrigated farm land. However, landowners risk losing precious water rights if they do not take steps to protect the rights before constructing a solar project.
Oregon water law requires the holder of a certificated irrigation water right to irrigate the land described in the water right at least once every five years. Failure to do so subjects the water right to forfeiture. Most commercial scale solar arrays are designed with a lifespan of about thirty to forty years. So a landowner who converts irrigated land to solar energy production risks forfeiting the water rights for land covered by solar panels and related infrastructure.
In most cases, a landowner has options to minimize or avoid water right forfeiture. The primary options include transferring the water right to other land or transferring the water instream. It is important to note that these options are not available to the holder of a water right permit, which is a preliminary version of a certificated right, and which much be “proved up” before it can be transferred.
Under Oregon water law, a water right certificate holder may change the place of use or the type of use for an irrigation water right. Both changes require a landowner to file a transfer application with the Oregon Water Resources Department. An unopposed transfer application typically requires about eighteen months to process.
A change in place of use authorizes a landowner to move a certificated water right to other land that can be irrigated from the same source of water. A place of use transfer can be used for both groundwater rights (wells) and surface rights (stream diversions). A landowner may transfer the water right to other irrigable land that he or she owns or to another landowner’s property.
A change from irrigation use to instream use is generally only available for surface rights. However, in the Deschutes Basin, groundwater rights may be converted to instream mitigation credits. A permanent instream transfer can generate significant monetary value for a certificate holder, offering an opportunity to get paid for generating environmental benefits.
The transfer of water rights is a very complicated process. Therefore, a landowner contemplating a solar project on irrigated land should contact the Oregon Water Resources Department early in the process to explore options for protecting any water rights. In addition, if the project site is located in an irrigation district, the landowner must work with the district, which has an ownership interest in the water right.