The rise and rise of renewable energy, and solar projects in particular, has led to an increased demand for large patches of land to house solar projects. For landowners and farmers in New York and other states across the country, there’s a new cash crop in town - solar panels. This progressive new approach for landowners can lead to big earnings, with minimal fuss and a straightforward development process. Using your spare parcels of land to house solar panels is an innovative new way to turn a profit, but just how much could you make by leasing your land for a solar panel installation? Below, we’ll look at some of the key variables which determine earnings for landowners.
#1. How much land?
For solar developers to establish a solar project on your farm, you’re going to need a minimum amount of land available, or the project may not be viable. Without a decent number of acres, developers could be tempted to seek land elsewhere. Of course, the required number of acres varies depending on the project and you should also remember that some land surrounding the panels will be needed for non-panel equipment. A good rule of thumb for how many panels you can hold is 1kW per 100 square feet.
#2. How much sunlight?
Your land will need to receive a great deal of sunlight on an annual basis to ensure a viable solar lease. You might think this is too obvious a point - “Of course a large outdoor area gets lots of sun!” - but many small obstructions can put a dent in your annual sun exposure. Obstructions mean shadows and this is bad news for solar developers. Of course, minor obstructions can be removed pretty easily (trees, bushes, etc.) but you likely won’t be keen to go knocking down buildings so your solar panels can receive more sunlight. Again, everything varies by project.
#3. How close to the grid?
Infrastructure is a vital factor for any solar developer to consider when seeking land for a project. In turn, this will influence the kind of money you can expect to earn from leasing your land for solar panels. Your land will need to be adequately accessible to the utility grid and have good road access too. Some infrastructure could be built, maybe, but this is generally expensive and difficult to construct, so you’re in with a better shot if the infrastructure is already in place.
#4. How good is the soil?
Just as with more traditional agricultural pursuits, the quality of your soil will come into play when a solar developer evaluates your land. If the land is unstable, riddled with debris, or otherwise difficult to build on top of, this could affect the potential number of panels or even the entire project. If clearing the land is difficult or not viable, the project may be hindered, or even called off.
#5. How is the lease negotiated?
Once all the previous factors have been accounted for and the value of the land has been determined, it’s time to begin negotiating the terms of your solar lease. Generally, the solar developer will draft up a lease which is to be reviewed by the landowner. Everything will be in here - length of lease, monthly rent, required acreage - so make sure you’re well informed and happy with the terms to ensure your earn as much as possible from your solar land lease.
With all these factors taken into account, just how much can a solar farm actually earn for landowners? According to figures from Landmark Dividend, leasing your land for solar panels could net you a profit-per-acre anywhere between $21,250 and $42,500! Please do remember that these figures can vary massively from project to project and, in many cases, will fall well below the amount suggested by Landmark Dividend. Of course, in some scenarios, the numbers could be even higher. This is especially true for solar farms spanning hundreds of acres which can see six-figure profits.
By Shane Croghan