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When it comes to solar farm land requirements, location is more important than the amount of land you have. Even if you only have a few acres, you still have a chance to generate income by leasing your land for a solar farm. Go to landgate.com, find your property and see how close you are to the nearest substation and transmission line. Then, you can claim ownership of your parcel to see the solar value of your property.
Once you sign the solar lease, or option to lease, there are generally four phases to a solar farm project:
Development Phase (sometimes referred to as the Option Period) – This could take anywhere from 1 – 5 years. It will include planning, permitting and regulatory matters. There is a possibility that during this phase, the operator could decide not to complete the project due to financial or regulatory permit reasons.
Construction Phase – This could last 2 – 4 months while they install the solar panels.
Operations Phase (sometimes referred to as the Production Phase) – This phase could last 20 – 30 years as they are not generating electricity
Decommissioning Phase – Unless they negotiate the right to extend the lease for another lengthy operations phase, the solar panels and supporting structures will be removed and the developer will work with you to restore the property to its original condition.
Usually, the solar developer will allow landowners to continue farming, running cattle or carrying out other surface activities on their land during the option or development period. If the solar developer elects to begin construction, then the surface owner will be restricted from surface activities that would interfere with construction, development, and the operations of the solar farm.
Yes, you can still lease your land for a solar farm if the minerals are already leased. The solar company will work with you and the operator to ensure that there are dedicated locations set aside for future drilling and development operations. The mineral estate is the dominant estate in most states (over the surface estate). That means that the mineral owner has the right to grant an oil and gas lease to an operator, who then has the right to use as much of the surface as is reasonably necessary to operate and produce oil and gas.
There will likely be a negotiation between the solar developer and the oil and gas company. The solar developer will not move forward on the project until they are certain there will be no interference from oil and gas operations.
Yes, you can still lease your land for solar if someone else owns the minerals. As stated above, the mineral estate is the dominant estate. The solar developer will know if the minerals have been leased. If they have been leased, the developer will attempt to coordinate with the oil and gas company in an effort to ensure they can install solar panels on your land. If the minerals have not been leased, the solar developer will contact the mineral owner in hopes a deal can be made before minerals are ever leased.
Yes. LandGate provides what is called a Solar LandEstimate™. It is a valuation of your property’s worth in solar resources. The LandEstimate™ for solar rights is derived using solar irradiance data, incidence angles, topography, distance to substations, electricity prices, government incentives, revenues, and cost of production in your area. To see your Solar LandEstimate™, you can simply claim ownership of your property on our map.
Leasing your land for solar farm development provides:
Learn more about the benefits of leasing your land for a solar farm.
There are a lot of factors that go into what you will be paid when you lease land for solar energy, such as the size of your property, distance to nearest transmission lines and substations, topography, state and federal incentives, just to name a few. Additionally, the size of the project will have an impact. Larger utility scale projects could require 100 acres or more. Whereas small to medium scale projects could require 2 – 40 acres. Future needs for electricity in your area, ease of access to your property, and supply and demand for solar sites in your area also factor in. If your land has easy access to highways or farm to market roads, your solar rights value could increase.
To see what the solar rights on your land are worth, you can claim ownership of your parcel on our map.
There are quite a few ways to be paid when you lease out the solar rights on your land. Across the country, deal terms vary. But generally, for Utility Scale Solar Farms, the developer will pay you $10 - $40 per acre per year for a 2-6 year option to lease. If during the option period, the developer elects to exercise the option to enter into a formal lease, you will be paid between $300 - $1000 per acre per year for 25 - 30 years.
Learn more about solar lease payment structures.
A solar lease option does not mean you are guaranteed to have a solar farm on your land. Solar developers use a solar lease option to ensure that they will have the exclusive right to enter into a formal solar farm land lease agreement before they invest time and money into their evaluation period.
A fixed annual payment for a solar lease is a pre-negotiated amount of money you will be paid annually to lease your solar rights. The number of years is also pre-negotiated and usually 25-30 years, with an option to extend the lease for another 5 - years.
A Power Purchase Agreement is an agreement between the solar farm developer and a company wanting to purchase the electricity. The solar developer will need this agreement in place prior to making the large investment to build the solar farm on your land.
In a fixed annual rent payment lease, the landowner will not benefit from higher future electricity prices. As an alternative, most solar farm lease agreements provide for an annual escalator of 1.5 - 3%. Another benefit to the fixed annual rental payments is that the rental payment does not decrease if electricity prices go down.
You will be responsible for property taxes on the portion of your property that is not developed for a solar farm. The solar farm lease agreement generally provides that the developer will be responsible for the taxes assessed on the developed lands.
Landowners receiving payments from solar farm developers can market and sell those future payments. Property owners can market the payments they receive from a solar lease with LandGate. Find your parcel on our map and follow the process to create a listing.