In the rapidly evolving world of renewable energy, solar power has emerged as a leading force in the quest for sustainability. This surge in popularity has opened new opportunities for land realtors, particularly in the realm of solar leasing. However, navigating the intricacies of solar energy can be confusing, with numerous questions arising about how solar leasing works, its benefits, and the potential implications for land value.
In this blog post, we aim to answer common questions asked by land realtors about solar leasing. Whether you're considering the feasibility of solar projects for your land listings or seeking to advise clients about their options, this guide is designed to clarify the path forward.
Can land be used for other purposes with a solar farm present?
Typically, commercial solar projects require at least 40 acres of buildable land. However, it is important to let landowners know that they don’t have to use all of their acreage for a solar farm if they do not wish to. This is up for negotiation with the solar developer! If they would like to keep producing crops or housing animals, they can provide a certain amount of acres for their needs and the solar panels. In fact, having grazing animals makes it easier to manage grass growth without the use of special devices.
How long do solar leases typically last?
The option phase will typically last between 2 to 5 years, and the development/ operation phase will last between 25 to 50 years.
What does commission look like once a solar farm lease has been secured?
The commission earned on solar energy deals are typically treated similarly as commercial real estate commissions. Each realtor/broker will be paid based on their specific listing agreement with their client, so the specific terms vary across the country. In most cases, a percent commission of payments that are made over time are paid to the realtor/broker. Since solar leases can extend for up to 50 years, that means a solar energy lease commission could earn revenue for a land professional for a significant period of time. In other cases, real estate professionals have chosen to get paid upfront for their commission.
How can I judge if my client’s land holds value for a solar farm?
The best way to judge your client’s land for solar farm potential is by using LandGate’s LandApp tool. For just $10 per month, LandApp has all of the data needed to discover the value of your client’s property for solar leasing. The type of land, distance from substations, transmission lines, and distribution lines are all important factors for determining a property's estimated value for a solar lease, and LandApp accounts for each of these factors in determining this calculation and more.
What type of land is best suited for a solar farm?
Solar developers generally seek out flat land with no obstructions, that is in close proximity to electrical infrastructure. However, the type of land and the state and local renewable energy incentives also affect whether or not land qualifies for a solar lease.
What is the difference between a community solar farm and a commercial solar farm?
Community solar farms are a smaller scale of harnessing and dispersing the energy generated. The energy from a community solar farm is typically used within the surrounding community, for example households in a neighborhood can become a community solar farm.The number of solar panels typically ranges between 15 to 20 panels and generate between 1 to 10 kilowatts of energy.
Commercial solar farms (also referred to as utility-scale solar farms) are large scale farms that are meant to provide more significant amounts of energy. On average, the amount of solar panels needed for a commercial solar farm are about 400 panels, which generates 10 to 100 kilowatts of energy. The solar panels themselves are also different from the ones used in a community solar farm. They are larger and heavier solar panels meant to increase efficiency.
How does a battery storage lease/sale differ from a solar lease offer?
The biggest difference between battery storage and solar farms is the amount of acreage that is needed, and the proximity to electrical infrastructure. Battery storage projects are far more concentrated, and only require 1-10 acres of buildable land. Sites that are ideal for battery storage are generally located directly next to a substation, or within a half mile. Historically, battery storage developers will also attempt to acquire the property versus leasing the property. Current practices are moving to include battery storage with solar farm development where landowners could find themselves leasing their property for a combination of battery storage and solar development. $/acre rates for battery storage can be significantly higher than rates for solar development so be sure to get as many offers as possible to know that you are getting the best deal for your client.
How can I get the best deal for my clients?
The best way to get the highest solar lease offer for your clients is to enter the property into a competitive marketplace like LandGate. Numerous energy developers use LandGate's data and marketplace to evaluate and plan new projects. Listing on LandGate is free, and there are no obligations to accept any offers that you receive through a listing.
To discover the energy potential of any U.S. property, subscribe to LandApp for just $10 per month. Access nationwide ownership information, unlimited property reports, and more:
