What Makes a Successful Solar Farm?

At Commercial-Solar.org, we receive calls almost every week from landowners interested in building a solar farm. The first question we ask is, “Who is going to buy the power?” If there’s a buyer willing to pay between $0.05 to $0.08 per kWh, your solar farm might be a viable project.

Leasing Your Land for Solar Development

Landowners can lease their land to solar developers and create an additional stream of income depending on a few key factors. With the rise of Community Solar Programs, more off-takers (buyers) are available to purchase the electricity generated by solar farms. Typical lease rates range from $1,000 to $1,500 per acre, but under the right circumstances—such as favorable tax incentives and higher electricity rates—leases can go up to $5,000 per acre.

Solar leases often begin with an option phase that lasts between 2 to 5 years. This period allows the developer time to design, engineer, obtain entitlements, and secure necessary permits for the project. If everything goes well, this is followed by a long-term lease agreement that can span 20 or more years, offering the landowner steady income through lease payments tied to the sale of electricity produced by the solar farm.

Characteristics of Ideal Land for Solar Farms

A successful solar farm generally requires at least 10 acres of land, though 20 to 40 acres is often ideal. Proximity to a substation with adequate capacity is crucial, as well as easy access to a road for maintenance purposes.

The best land for a solar farm is relatively flat and free of trees or wetlands, minimizing the need for significant grading or site preparation. The key is for the solar developer to connect the solar farm to the nearest electrical infrastructure, known as the interconnection (IX). The shorter the distance for trenching, the lower the cost, and consequently, the higher the value of your land. However, if trenching needs to pass through multiple properties, this adds complexity and costs to the project. Similarly, the cost and logistics of building a road to the solar farm can impact the overall lease value.

Integrating Battery Storage with Solar Farms

Combining solar installations with battery storage is becoming an increasingly popular strategy. While battery storage can yield higher rates per acre compared to solar alone, it also introduces more complexity to the project. However, with careful planning and the right conditions, this combination can provide significant benefits to both developers and landowners.

If you’re considering leasing your land for solar development or want to learn more about the opportunities available, contact us at Commercial-Solar.org. We’re here to guide you through every step of the process.