Solar Farm Land Lease Rates

If you are a landowner looking to make a profit, you might be enticed by solar lease rates. Solar companies throughout the country are looking to lease land, “near substations where they can connect” according to Brian Fitzpatrick, director of project development for Inman Solar Inc. based in Atlanta.

Solar Farm Lease Rates Depend on Your Location

Solar Farm Lease Rates in North Carolina

Solar farm profit per acre depends on the state in which your land is located. For example, the North Carolina Sustainable Energy Association says that local solar farm lease rates range from $300 to $700 per acre per year.

Solar Farm Rates in Nevada, Arizona, or New Mexico

In desert areas like Nevada, especially in rural spots that lack highway access, you’ll see lower rates. Available lease rates for public lands show that in Arizona and New Mexico (isolated regions of the states), lease rates can drop to as little as $16/acre.

Solar Lease Rates in Connecticut

Farmers in Eastern Connecticut are reporting that they’ve been approached by companies offering them as much as $1,200 dollars per acre, that’s a really high solar lease rate! For example, one farmer, Kevin Stott, who owns a farm in Norwich recently accepted an offer from a solar company to lease his land for $45,000 a year for 20 years. That puts him at about $1.35 million dollars generated from the solar farm lease over the time of the agreement.

Lease Rates in Wisconsin and Minnesota

In central Wisconsin, the going rate for a solar farm per acre is roughly $800 to $1000 dollars. And although the terms of the leases found in Chisago County, Minnesota are confidential, solar lease rates must have been attractive enough for property owners to rent roughly 1,000 acres of land to energy companies for 30 year leases. Because of the counties close location to the Twin Cities, which provides it access to major transmission lines and substations, it is a perfect site for a solar farm.

Landowners in areas where developable land is very scarce can push for more money from the solar companies, and could see generous solar lease rates. Agriculturalists with farmland are seeing lease rates per acre that are more than triple the average rent for crop or grazing which the U.S. Agriculture Department states averages from $30 to $100 dollars per acre.

Essentially, how much money a solar farm can make boils down to location.

Is the Solar Lease Rate You’ve Been Offered Worth it?

Unfortunately, this isn’t a comprehensive list of solar farm lease rates, and if you’re doing this alone, this is something that can keep you from receiving the amount of compensation you are due. At the least, there is a simple way for a property owner who has been approached by a solar company to know if they are comfortable with the lease rates they’ve been offered.

Let’s say you owned a tomato farm and it produced about $1,000 dollars in revenue per acre. Someone just offered you $1,000 per acre just to come in and lease it. Yes, you would be making the same amount of money, but the amount of time, energy, and financial investment it takes to grow a tomato farm might be outweighed by the benefits of reaping $1,000 dollars an acre without having to lift a finger. Most farm land owners would agree that this deal would be best because it involves less work for them. However, you might fare better by having an expert in solar lease negotiations on your side.

Solar Farm Lease Advice

Avoid Misconceptions by Consulting an Expert

There is a common misconception amongst landowners that if they lease their property, the solar company will give them a percentage of the profit they make. That’s just not true, the landowners’ cut comes from the lease agreement. Misconceptions like this are why it’s very important to have an expert in the solar industry. Though they would not be apt to give a percentage of profit, they would be likely to agree to a percentage of revenue, basically a royalty. It’s important to note here that property owners can ask for the royalty to escalate over time. They might not agree to this either, but it depends on the state. For example, California and Hawaii are abundant in solar resource so developers in those states have a bit more room to offer a royalty to property owners.

Maximize Your Solar Farm Profit Per Acre

Another way for landowners to maximize their solar farm profit per acre is to ask the solar development company who is leasing the property to compensate them for the Solar Renewable Energy Credits that are generated from the development of the solar farm. In this case, the company gives a credit for the amount of Kwh generated by the system. A lot of solar companies will pay for landowners to sign away their renewable energy credits to them. This means that property owners might be able to ask for a certain amount of SREC or at least ask to be compensated for it.

How Much Money You’ll Make from a Solar Lease Depends on Your Location and Your Representation 

With all of that said, the amount of revenue created from a solar farm lease comes down to two things: location of your property, and how competent your representative in the negotiations is. By listing your land with us, you gain access to a source of experts in every major category for land leases. A solar industry expert would handle any negotiations with industry companies and work to get you the best deal possible. The best part is, we only take a percentage of the deal if you’re happy with and accept the lease.

If you’re interested in more information you can reach out to us via email!