How to Lease Your Land as a Solar Farm

Top 12 Questions About Solar Farms

Without a doubt, the installation of solar panels on farmland is increasing. In Oregon and Washington state, solar farms are becoming a popular secondary source of income for many farmers, ranchers, and any landowner with land not being utilized. To help you make a more informed decision whether solar is right for you, we compiled the top 12 most frequently asked questions about installing a solar farm.

1) What is a solar farm?

A solar farm is a large scale solar energy generation system. Think of it like a power plant, but without any wafting black smoke or large, unsightly cooling towers. Prices of renewable energy have plummeted in recent years. As a result, large installations like solar farms are now cost competitive with coal and natural gas generation. Utilities are seeking out the most cost effective energy generation sources, and this has created a boom in the utility scale PV market.

2) What does that have to do with me?

Great question. Thanks to the demand for more renewable energy, solar developers are seeking landowners to lease some of their land for solar farms. Developers take care of the financing, permitting, construction and operation of the solar farm. For landowners, this means a reliable source of passive income for the next 20 years and beyond. 

3) How do I know if my land is a good fit?

A solar farm needs three things in order to be successful: 

  • Access to Transmission and Distribution infrastructure

  • Relatively flat, open land, with good solar access. 

  • Good old fashioned sun shine

4) How much land would I need to have available?

A small solar farm might occupy as little as 10 acres, but most solar farms in the US are closer to 100 acres.

5) What is Transmission and Distribution infrastructure? 

Transmission and distribution (or T&D) refers to the way we get power from the place where it’s produced to the home or business that needs electricity. T&D infrastructure is quite expensive to deploy, so it’s important that the site for a potential solar farm be nearby existing infrastructure. Otherwise, the cost of adding new transmission lines could be too expensive to justify building a solar farm.

6) How long do these projects take to come to fruition, and how long would the lease be?

These are large projects, with long timelines to match. Each project requires a culmination of several factors including funding, site evaluation, design, permitting, and utility review, all before construction can begin. Project development can take from 2 to 5 years, in which time developers may employ a short term lease to ensure the project is able to be permitted. Once a project is ready to be built, the agreements are typically 20 to 30 years. 

7) Who is going to buy the power from the solar farm?

A solar farm requires a consistent buyer of the electricity in order to be financially viable. Fortunately, many utilities are looking to diversify their generation portfolios, so solar developers are commonly able to come to a “Power Purchase Agreement” with a utility to cover the life of the project. A willing utility is an essential part of any solar development. 

8) As a landowner, will I have any responsibilities in project construction?

The developers take care of everything. The only thing for the landowners to worry about is what to buy with the extra money they’re taking in. 

9) Why doesn’t everyone do this?

Not every property is qualified to be the site for a solar farm. It takes a special combination of location and timing to make a project work. For properties that do qualify, however, solar farms are a great way to generate lease revenue.

10) What are some other benefits of solar?

Solar farms are silent and have no emissions. Because there are no moving parts in a solar system, minimal maintenance is required. 

No water usage. Conventional power plants require a large amount of water in order to operate. The water is heated to produce steam, which spins turbines to create electricity. With solar energy, electricity is produced without any water. Therefore, communities with a higher penetration of solar power don’t need to allocate as much of their valuable water resources towards power production. 

Solar creates jobs. There are now over 300,000 Americans employed in the solar industry. 

Energy independence. By bolstering our own renewable energy portfolio in the US, we decrease our reliance on imported fossil fuels. 

11) What steps are involved in the development process?

First, the property must go through a site evaluation. If the site seems like a good fit, the project will move into the design. The designers map out the electrical configuration of the system, and determine how the system is to be mounted. While the project is getting designed, solar developers also determine how to fund the projects. Power plants have always been attractive investments for banks and investment firms due to their predictable lifespan, and solar farms are no different. After the design is complete, the permitting phase is the next step. After the plans are reviewed and approved, then construction can begin. 

12) Does solar actually make a difference?

Absolutely!! The decarbonization of our energy system is one of the most impact ways we can combat climate change. Adding new renewable energy generation assets like solar farms is a crucial step towards a more sustainable energy future.