Does My Land Qualify for a Solar Lease?

Does My Land Qualify for a Solar Lease?

You may be looking to make additional income from your land on a renewable energy lease, but how do you know if your parcel has met land requirements for a solar farm? Landowners often wonder if their land qualifies for a solar lease. We go over some must-haves if you want to put solar panels on your land, as well as factors that make the land more attractive to energy investors, and therefore worth larger solar royalty payments to the landowner. LandGate takes all of the factors we will discuss and more to determine your Solar LandEstimate™, or what your land could be worth if you lease it for solar panels.

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Solar Farm Land Requirements

Acreage Required for a Solar Farm

While there is no definitive answer to “how many acres do I need for a solar farm?”, we generally consider 30 acres a great start to attracting solar developers. You can list land under 30 acres for solar panels, it just may be more difficult to get it leased. Every 1 MW of solar farm capacity requires around 2 acres of solar panels. In general, solar farms are getting larger in capacity and requiring more acreage. Keep in mind local towns and authorities usually do not permit full coverage of the entire parcel AND extra space is required for additional solar equipment. If leases pay a certain amount per acre, then the larger your land parcel is, the more you could make.

Exclusion Zones and Buildable Acreage

Not all your acreage will be suitable for building a solar farm. Exclusion zones can be thought of as land that solar equipment cannot be placed on for one reason or another. There are many exclusion zones that prohibit the construction of solar panels:

  • Topography
  • Dwellings
  • Flood Zones
  • Waterways
  • Wilderness
  • National Park
  • State Park
  • Hazardous Sites
  • NFS Land Units
  • Grassland

After removing these exclusion zones from your acreage, you are left with the “buildable acreage” suitable for a commercial solar farm. You can see for free on LandGate the location of these exclusion zones on your parcel(s) and the calculation of the buildable acreage.

In addition, when an energy developer needs to clear obstacles from the land, it costs more time and money. To compensate for this, they won’t be willing to pay as much to lease your land for a solar farm. Land for a solar lease will be worth more if it is clear of trees and structures. Solar developers will also be willing to pay more for land that is bordered by a road so that construction crews can easily get their machinery in and out.

Proximity to a Transmission Line, Distribution Line, or Substation

The further away your land is from the grid, the higher the cost of interconnection for the developer. If your property is adjacent to a transmission line, distribution line, or substation, the developer can save interconnection costs and pass those costs onto you in the form of a higher lease rate per acre. That solar farm income will go up even more if the voltage of the line or substation is in the range required by the developer for the desired project capacity. Solar developers will also take the injection capacity into consideration. The presence of a road doesn’t mean that the road can handle big city rush hour traffic. What if that road is a one-lane highway? Similarly, just because there is infrastructure in place near your land, doesn’t mean it can handle any size solar project.

Solar Power Incentivization

Governments are incentivizing solar development more and more, and living in an area where solar energy is highly incentivized means your land could be worth a lot more when you lease it for solar panels. Both energy incentives such as Renewable Energy Certificates and energy tax incentives like Sales and Use Tax, State Median Property Tax, State Sales Tax Exempt Status, etc. will play a role in solar value. For instance, Arizona gets more sun than any other state. But Massachusetts solar rights are worth much more due to incentivization, even though land in MA receives significantly less sunshine than land in AZ.

Amount of Sunlight

The amount of sunlight that hits your land might seem like a major driver for solar value but, perhaps surprisingly, it is not. While your land must receive adequate sunlight, a sunny parcel is not worth as much to a solar developer as the factors mentioned above, most notably the incentivization in your state. The amount of sunlight can also be thought of in terms of annual solar irradiance and the absence of sunlight blocking obstacles such as trees as buildings. NASA defines solar irradiance as “the output of light energy from the entire disk of the Sun, measured at the Earth.” Specific to a solar lease, it is a measure of how much solar power your land is getting.

Solar Irradiance of the US from LandGate’s map.
Solar Irradiance of the US from LandGate’s map.

Lease Land for a Solar Farm with LandGate – Find the Solar Value of your Land

LandGate has already done the work for landowners to determine their property’s solar land lease value and we have that data ready to share with you for free. Skip the guesswork and claim ownership of your parcel to see its Solar LandEstimate™. If you like what you see, you can list your land for free on our leading marketplace for exposure to thousands of solar investors. We help landowners quickly and easily make extra income on their land and ensure they are getting a fair offer. 

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