Solar panel power generation land leasing compensation standards

Should a landowner consider a solar energy lease?

While most solar leases contain similar terms, each one must be carefully analyzed. When approached by a landman about a solar energy lease, the landowner must first determine whether the impact and intrusion of a solar farm operation outweighs the current and future use of the land. The answer is not always yes.

How are lease rates determined for solar land?

Lease rates for solar land are determined through negotiations between the landowner and the solar company. Several factors can influence the lease rate, including the size and quality of the land, solar resource potential, local market conditions, and the cost to develop and build the solar project.

Can a landowner continue farming if a solar project is leased?

While the landowner may be able to continue farming or ranching the land during the first few years of the lease, many leases require the landowner to stop all activity on the leased land once solar project construction starts. After construction, the lease may allow the landowner to return the non-developed land to agricultural use.

What is a solar land lease?

A solar land lease is a contractual agreement between you and a solar energy development company (solar developer) in which the solar developer leases your land for the purpose of installing a commercial, utility-scale photovoltaic (PV) solar farm to generate electricity.

How does a solar lease work?

The solar company conducts feasibility studies to assess the land’s potential for solar power generation. If the land meets the requirements, the company will negotiate a lease agreement with the landowner, specifying the lease duration, rental rates, and other terms and conditions. What are the benefits of leasing your land for solar?

What are the benefits of a solar lease?

After construction, the lease may allow the landowner to return the non-developed land to agricultural use. Land encumbered by a solar lease may also limit any future exploration by the landowner for oil, gas and other minerals.