How will I get paid for leasing my land for solar panels?
There are quite a few ways to be paid when you lease your land for solar energy. 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 1-5 year option to lease. Following the option period, if the developer elects to exercise the option to enter into a formal lease, you will be paid between $400 - $2,000 per acre per year for 25 - 30 years. Most solar lease payments are paid on a per acre, per year basis. Additionally, most solar leases do not pay royalties. However, as with everything else in a solar lease, this can be negotiated with the developer!
What is a solar lease option?
A solar lease option is the 2-6 year term at the start of a lease agreement that grants solar developers the exclusive right to enter into a formal lease agreement. During this time, the solar developer evaluates the parcel's suitability for solar leasing and works to obtain the proper permits that would allow them to begin construction. That being said, entering into a solar lease option does not guarantee that the solar developer will move forward with construction.
What is a fixed annual payment in a solar lease agreement?
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.
What is a Power Purchase Agreement?
A Power Purchase Agreement is an agreement between the solar farm developer and a company wanting to purchase electricity. The solar developer will need this agreement in place before making the large investment to build the solar farm on your land.
As electricity prices increase, am I compensated in my solar lease contract?
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.
Will I have to pay property taxes if my property is developed as a solar farm?
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.
Can I sell my solar rent payments?
Landowners receiving payments for their solar lease can market and sell those future payments. Selling solar lease payments is generally in the best interest of the landowner since those payments technically decrease in value over time as a result of inflation, and the lease payments are never guaranteed (the developer of the lease can stop operating the solar facility at any time). 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. Learn more about selling your solar royalties.
