Lease Land For Solar Farm: 6 Things You Should Know
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- เผยแพร่เมื่อ 26 มิ.ย. 2024
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Farmers and landowners with land over 25 acres can lease their land to solar farms for additional income.
This helps diversify the use of your land while meeting the growing demand for solar.
If you’re intrigued by this possibility but don’t know where to begin, keep reading.
Here’s what you should know when it comes to leasing a piece of land for solar farms and the questions you should ask.
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Disclaimer: we are not lawyers, accountants, or financial advisors, and the information in this video is for informational purposes only. This video is based on our own research and experience and, while we do our best to keep it accurate and up-to-date, but it may contain errors. Please be sure to consult a legal or financial professional before making any investment or purchasing decisions.
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Video Transcript:
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Hi guys this is Erica from Gokce Capital. Now before I begin, be sure to click subscribe and turn on the notification Bell. Princess's family has been raising Wisconsin dairy cows for Generations but now Brent will add another crop to his herd son.
We'll more at the end of this video. But first, if you own land you may want to consider leasing it to a Solar Company, and today's video we have the top things you should know. Number one, what is a lease for a solar farm plus the name would suggest?
This kind of lease occurs when you grant a company a lease in order to develop a solar farm on your property. Number two, what are the pros of leasing your land for solar Farms? The primary benefit of course is that it generates income.
It also promotes sustainable farming in two senses of the word. First, you're helping to generate renewable energy. But also, you're getting a steady reliable long-term source of income finally, a big question that many people may have is can I still use my farm if I lease it to a Solar Company?
The answer is generally yes. In many circumstances, the Solar Company will not use all of your property and you can continue to farm on the rest while you continue to generate income from the lease. Number three, what are the cons of leasing your land for a solar farm? Well, first a solar lease is almost always a long-term commitment think 20 to 30 years.
So of course solar panels are going to be placed on your land which will limit what you can do with at least a portion of it and some other things you may not consider immediately. But it's possible that your lease will interfere with certain government programs and benefits, particularly things like tax breaks for using the land for agricultural purposes. Oh and there's one final con.
Keep in mind that you do not own any Solar equipment. Your income is coming not from the energy that is produced but from the fact that you are a Landlord leasing land. So this means the equipment is not an asset you own and you also don't get any benefit from the energy produced.
Number four, how do you know if your land is right for solar? Now you may be sold on the idea of leasing your land for a solar farm but it's possible your property won't work. Here are some things to keep in mind.
You will need substantial acreage. Most land leases for solar Farms are for utility-scale Farms. You'll also need the right topography and something you may not think about.
But your land does not need to be near existing electrical infrastructure. Like transmission lines and substations as well as a demand for electricity. So if you're too far out.
You may be out of luck and finally, your land must be located in a jurisdiction that will give a permit to your developer for a solar farm. Number five, if a company has reached out to you, here are a few things that you should look for. When you're discussing terms, there are the basics.
What will the lease amount be and what is the annual escalator? Your lease amount should go up each year and it should at least track inflation. Another thing to keep in mind is that a Solar Company is it's not going to enter into a lease with you right away.
They're going to want to do their due diligence to make sure your land is right for a solar farm and this period can take quite a long time anywhere from a year to two years. During this period your land will likely be tied up. In that, you won't be able to sell it.
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The decommissioning is important as I've heard they may strip the land of all top soil to prevent plant/weed growth, which will pretty much destroy your ability to grow crops when they leave.
That’s a really good point!
Awesome video very informative, I don't own land but seems like a good way to generate money in the long term!
Glad it was helpful!
Another concern is that the solar farm is an improvement to your property. That means your property can have a mechanics lien against it if the solar company doesn’t pay their bills. Every property owner in our county with a wind turbine had a mechanics lien on their farm when the wind company didn’t pay their wire bill. When researched, the company was averaging 16% of their projects had one or more liens during construction. These liens show on the land owners credit report. The company did pay the delinquent bills, but what will happen in the next 50 years. Would you trust a company that can’t get through the first year without problems for the next 50 years? Decommissioning is a big deal as well.
Wow, that's a really good point. Thank you!
Please consider your neighbors’ property values and views before signing a lease.
We have had a terrible time with the construction of the Kingaroy Solar Farm in Kingaroy Qld. Foreign owned company Mytilinous have given the 16 elderly residents nothing. All that time the company has smothered us in red dust, subjected us to loud beeping and machinery noises. Vibrations from machinery affecting our homes and vibrating them. The rise by 5 degree of our tempretures and our property values lowered by 20 percent . Our health has deteriated. We asked for compensation, we recieved nothing. Please farmers, do not put your neighbors through this torture.
how did it raise your temperatures by 5 degrees?@@Laynechex
@@TheKsumuskie it’s called heat from absorption off the panels. You tube has videos that tell the truth of these companies and the devastation they leave behind
This is video is filled with things that need correction. As a solar provider for feedback
Thank you for watching! I'm happy to correct any issues. Would you mind sending me your comments?
I have the perfect farm and on each side of my land is big towers two separate sets one is sixty foot tall towers the opposite side is 100 foot towers
Thank you for sharing.
How many square feet? How much can I make
The video states that Brent leased 500 acres (one third of his farm) to the developer. How many acres (of the 500) did the developer actually use? I'm very curious because some of the lease agreements payout on the acres used by the solar farm.
Hello Brad, that's a good question. I'm not sure how many acres the farm actually used, my guess was the full 500 since that is what they leased.
What’s the best way to get in touch with a solar company to see if they are interested in leasing my land?
Hello Vince! The solar company should reach out to you if they are interested, but if you would like to find a solar company, you may consider listing your land on landgate: landgate.com/data-real-estate?TH-cam&
I owe a residential lot ! It's empty !! It's depends on the city planning department??
Hello Alex, yes, you would want to check with the city planning department. If solar is allowed, you will also need to check how close you are to a substation and make sure that the lot is large enough for a solar development company.
I have acreage that is currently in pulp, paper, and pine straw production, however, I am considering converting the land use to a solar farm. There is about 30 acres of usable land that would be good for a solar farm. What kind of income, taxes, and maintenance can I expect if I decide to convert it to a solar farm? What is the typical lease period for such use? How do I contact energy companies that would be interested in such a venture? How do I vet these companies by the quality of their performance? Just a few thoughts to consider.
These are all very good questions. Unfortunately, it's hard to answer these questions at a high level. The amount of income you will receive heavily depends on the location and quality of your land (how much sun do you get, are you near existing transmission lines and a substation, how easy is it to access and develop your property). Maintenance costs and lease period will depend on your lease and taxes will depend on your local assessor. You may want to list your land on a site like landgate and see if any developers reach out to you and what they offer. You can also look at other listings in your area on this site to see what lease rates look like.
But can't we get a rule of thumb for income? Examples? I have 100 acres in Nebraska. What income could that produce?@@GokceCapital
does it have to be farmland or just acreage available to place solar panels on
No, it doesn't have to be farmland - you just need acreage!
@@GokceCapitalhow do I go about finding a company that is looking to lease land to place the solar panels on?
Can you farm the land after the solar system is removed?
It depends on your land and the details of the contract, but I do believe that many farmers are able to keep working the land once the solar panels are on it.
Is investing in solar farms profitable?
Good question.
Very profitable like very profitable
@@tkharmon5168 hi, how would you know? I’m considering buying land and was thinking of leasing some for solar energy production.
What's the minimum amount of land you can lease?
I'm not sure if there is a minimum, but in order to generate a substantial amount of energy you will need land of a suitable size. The exact size will depend on the location, sunlight, how much energy you want to generate, etc.
@@GokceCapital I heard is no less than 20 acres of actual land that can be developed.
Not true I am in the process of leasing 18 acres to a solar farm company. @@paradise6606
I have land I want to lease for a solar farm. Can you help me find a company who would like to build one. I am about 1.5 miles from a substation, I own the top of a mountain almost all flat with a county maintained road going right through it. Triple phase is on an adjacent property. Land on top is almost all flat but would need to be cleared of brush. I am not in a swamp or wet land. Property is 1200 in elevation above sea level and fog line about 4 miles from ocean when driving. On the north coast of California not in a costal zone. Upper residential zoning. I have two parcel right next to one another of 119.18 acres in total. I'm open to doing as big as we can get out of the use of the land.
You may want to try listing on landgate.com. I hope this helps!
@@GokceCapital Thank you.
i was offered 1700 an acre at 2.5 increase. is this a normal rate?
It really depends on the area and characteristics of your land. Are there other landowners in your area leasing their properties? Perhaps you could speak with them to see what rates they have been offered.
It also depends on the State. In MA you can expect $3-4K/acre, whereas in IL $1-2K/acre.
@@Andres-hq2bp holy shit!
Is the lease rate per annum or for 20 years or what?@@GokceCapital
How long of a period?
Mechanics liens are showing up against land owners. Do a search for solar farms indiana mechanics lien. Imagine what happens when solar and wind llcs go bankrupt due to cheap power when fusion becomes perfected. Yep, landowners lose their land. Bet you didnt see that coming!
That's a good point. Thank you for sharing.
Don’t forget to explain what this panels are made from and what it can do when these panels get broken from wind, hail and tornadoes! Was you lease this out the company that leases does have control over your land! Sorry but no thanks!
Thank you for your comment, Steve.
Black is the new green