In the last decade, the world has witnessed an unprecedented surge in the popularity of solar energy. It has transformed from a niche interest of environmentalists to a viable, booming industry shaping the global energy landscape. With the Paris Agreement setting the ambitious target of limiting global warming, solar power has emerged as a savior, offering a sustainable energy solution and a lucrative opportunity for landowners and commercial property owners alike.
This guide aims to provide a comprehensive look at the benefits and downsides of transitioning to solar energy, particularly from the perspective of those who own land or property. With practical insights, real-world examples, and a forward-looking approach, we hope to arm you with the knowledge to make educated decisions about the role solar energy can play in your life and business in 2024.
Why Solar Energy is Booming
The Energy Information Administration (EIA) reports that solar energy is the fastest-growing renewable source, driven by significant capacity expansions and favorable tax credit policies. The Inflation Reduction Act (IRA) has further transformed the clean energy sector, creating a thriving environment for energy developers. By prioritizing incentives for renewable infrastructure, the IRA has sparked a wave of investment in solar, wind, battery storage, and other green technologies, fueling a promising future for sustainable energy.
The Pros and Cons of Solar Energy
Solar energy has become a transformative force in the global energy landscape, offering significant financial and environmental benefits. For landowners and commercial property owners, leasing land for solar farms can provide a lucrative revenue stream, supported by favorable lease terms and government incentives. However, the pros and cons of solar energy include high initial setup costs, dependency on weather conditions, and ongoing maintenance requirements as notable challenges.
Advantages of Solar Energy
There’s a reason solar energy is becoming so popular—it offers a variety of benefits across environmental, financial, and functional dimensions. For landowners and commercial property owners, the advantages of solar energy are increasingly clear, compelling us to explore the bright side of solar power– quite literally.
1) Leasing Land for Solar Farms Generates Revenue
Landowners are sitting on a goldmine, and it’s not under the soil – it’s spread out far and wide across the sky. By leasing land for solar farms, property owners can generate significant long-term revenue from lease payments paid by solar energy developers. Solar developers are keen to lease vast tracks of land to deploy photovoltaic panels, offering significant financial returns. With favorable lease terms and government-backed incentives, landowners find themselves with an alternative revenue stream that can secure them millions over the lifetime of a solar project.
2) Solar Energy Benefits the Environment
Solar energy is one of the cleanest sources of power. Unlike fossil fuels, it does not emit greenhouse gases or air pollutants during operation. Using solar energy reduces your carbon footprint and contributes to a healthier planet. For businesses, adopting solar can also enhance their reputation as environmentally responsible entities.
3) Tax Incentives and Breaks for Solar Energy
There’s never been a better time to invest in solar. Many governments and local authorities offer financial incentives to encourage solar adoption. These can include tax credits, rebates, and grants, which help offset the upfront costs of installation.
4) Job Creation
Over the past decade, the solar market has experienced remarkable growth, averaging a 26% annual increase. This expansion has generated thousands of jobs, delivered significant economic benefits, and played a key role in reducing carbon emissions. By Q4 2024, the U.S. had achieved an impressive total installed solar capacity of over 219.8 gigawatts (GW), solidifying solar energy as one of the nation’s fastest-growing renewable power sources.
As of December 2024, nearly 280,000 individuals were employed in the U.S. solar industry, according to the Interstate Renewable Energy Council (IREC). This workforce is expected to expand further as solar installations continue to rise across the country, driving progress toward a cleaner and more sustainable future.
Disadvantages of Solar Energy
While the future of solar energy appears beacon-bright, there are also shadows that any prospective user should be aware of. The pathway to harnessing the sun’s energy in a way that's both effective and financially viable has its obstacles, and it’s important to weigh them up against the benefits.
1) High Set-Up Costs
Arguably, the main deterrent for landowners and commercial property owners is the high initial cost of setting up a solar system. This includes the purchase and installation of equipment, as well as any necessary preparatory infrastructure work. For large-scale installations, the price tag can be significant, requiring a careful evaluation of financial resources and potential payback periods.
This is why it is important to explore other options for getting a solar farm developed on your property. You can list your property for free on LandGate’s marketplace to put your property in front of a nationwide network of solar energy developers actively searching for suitable properties for new projects. Understanding the qualifications developers look for in a potential project site can help you score a potential lease offer quickly!
2) Weather and Location-Dependent
The performance of solar panels is intertwined with one variable we can't control – the weather. Weather conditions can affect solar panel performance, decreasing their effectiveness. Solar panels rely on sunlight to generate electricity, but they can still produce energy even on cloudy and rainy days. According to the National Renewable Energy Laboratory (NREL), solar panels can generate approximately 25% to 40% of their maximum power output under overcast conditions. This output depends on factors such as cloud density, cloud type, and the positioning and type of solar panels. While electricity production is reduced on cloudy days due to limited sunlight reaching the panels, solar cells are specifically designed to absorb energy from the sun. With fewer direct rays hitting the panels, the amount of energy produced naturally decreases. However, even on less sunny days, solar panels remain a viable and efficient source of renewable energy.
3) Policy Uncertainty
The political landscape heavily influences the future of the solar industry. Policy uncertainty, shifts in government leadership as a result of the 2024 presidential election, and changes in federal and state incentives often create an unpredictable environment for investors and project developers. To ensure long-term growth and stability in the solar sector, clear and consistent policies are essential for building investor confidence and driving progress.
4) Environmental Impact of Manufacturing Solar Panels
Although solar energy itself is clean, the manufacturing process of solar panels results in some environmental impact. The production of photovoltaic cells involves energy-intensive processes and the use of rare materials. Recycling old or damaged panels remains a challenge, though developments are underway.
5) Grid Integration and Infrastructure
Integrating solar energy into existing power grids brings its own set of technical challenges. To accommodate the decentralized and fluctuating nature of solar power, grid infrastructure must adapt and evolve. The renewable energy and data center booms have placed more pressure on the energy grid. Key upgrades, such as enabling bidirectional power flow and incorporating smart grid technologies, are crucial. These advancements will not only enhance grid stability but also unlock the full potential of solar energy, ensuring a more efficient and reliable energy system.
Understanding Your Property's Solar Energy Potential
Leasing property for solar energy presents a lucrative opportunity for property owners to generate revenue and produce clean energy. If you're interested in leasing your land or property for solar panels, the first step is to determine the solar viability of your property. Tools like LandGate's free property reports provide estimates of your land's value for solar leasing, factoring in resources like solar irradiance, buildable acreage, proximity to electrical infrastructure, and more.
