June 11, 2020
Given the growing popularity of solar farms in recent years, and the increasing availability of community solar subscriptions, it’s not surprising that land is in high demand. Solar developers across the country are eager to locate suitable parcels of land to develop new solar projects and, of course, Pennsylvania is no exception to this.
Indeed, farmland in Pennsylvania is of particular interest to renewable energy developers as it often meets their basic needs—lots of acreage with little existing development. Furthermore, landowners have probably read about the potential revenue they could generate from a solar land lease and noted that solar land lease rates are usually higher than agricultural rental rates.
This potential revenue stream can be extremely appealing to landowners as a solar land lease generally requires minimal effort on their part and can guarantee a reliable, consistent source of income for years to come. However, a solar land lease is a serious, long-term commitment and any potential lease needs to be carefully examined. It’s imperative that landowners fully understand every aspect of the lease before signing—and it’s certainly advisable to seek legal advice as well.
Beyond the lease rate, which can be very tantalizing, there are a number of other important considerations when it comes to solar land leasing.
Will the solar land lease restrict the landowner’s ability to access/use their land?
Who is responsible for restoring the land to its original condition following the conclusion of the lease term?
Exactly how many acres of the land will be used for the solar project and how does this affect payment to the landowner?
This last point is of particular importance, as it can determine the payment you receive from the solar developer. A solar developer interested in leasing your land may only want to use specific parcels of the land for the solar project and, of course, will only pay for the utilized acres. However, the developer may require access to unused parcels of land in order to access the solar project. This means that you could be giving up your rights to more of the land than your lease payment reflects.
These are just some of the key points a landowner must consider when discussing a potential land lease with a solar company. Of course, there may be other important considerations, but asking these questions can clear up a lot of key aspects of the lease. Again, you should review everything with a legal professional before committing to a solar land lease or striking up any sort of agreement with the developer.
YSG Solar is experienced in the development of large-scale solar projects, having operated in the industry for over a decade. Get in touch today to learn more about solar land leasing and how you could benefit. Send us an email, or call at 212.389.9215 to get started.
YSG Solar is a project development vehicle responsible for commoditizing energy infrastructure projects. We work with long-term owners and operators to provide clean energy assets with stable, predictable cash flows. YSG's market focus is distributed generation and utility-scale projects located within North America.
Sources:
https://www.parealtors.org/solar-leases-landowners-beware/
https://www.mette.com/2019/07/10/solar-leases-landowners-beware/