Best Pros and Cons of Leasing Land for Solar Panels Station

A residential and commercial solar panel installation requires a large area, depending on its electricity generation capacity. There are some pros and cons of leasing land for solar panels or solar firms such as lots of income, losing land for a long term, increased land cost, contractual complexities, and so on. After also leasing land for solar firm awakens the light of hope that people will get a clean and sustainable energy for a long duration.

However, there are different sources (wind, solar, hydro, etc.) that are considered renewable energy in the world. Solar is one of the easiest renewable energy sources that can easily convert into electricity. The USA is one of the renowned countries where renewable energy infrastructure has taken a leading part.

According to the recent data in the USA, more than 5 million (residential and commercial) PV system installations have been done in different locations. According to the latest statistics, over 4.3 million homes are equipped with solar panels. Let’s see a few locations in the USA.  

• New York PV panel is installed over 202,406 homes.  
• California solar panel is installed over 1,866000 homes.
• New Jersey has 181,294 homes that are under solar energy.  
• In Maryland, over 99,504 homes are using solar energy.
• In Arizona, more than 290,786 residents use solar energy.
• Over 195,150 homes are using solar panel-generated electricity.
• Over 110,687 homes use solar energy in Nevada.

However, there are many American states that have been using solar energy instead of commercial electrical energy. This amount is increasing geometrically due to the increasing global temperature, softness, and flexibility of the solar panel system. Indeed, solar panels already occupy over 5% of US homes to generate electricity. It is projected that 47% of homes will be equipped with PV panels in 2050.  

What is Leasing Land for Solar Farm?

If land is leased from the land owners for a specific duration by an agreement between land owners and a developer or solar panel company owner for creating a solar firm or solar power station, this is called leasing land for a solar firm. This land leasing agreement can go up to 30 years, and some go for more than this duration. However, a solar firm is created using a master plan and sharp calculations about some essential things, such as

• Number of solar panels
• Mounting system
• Type of solar panels.
• Solar inverter
• Batteries
• Transformers
• Transmission line
• Electrical substation

However, there are some crucial pros and cons of leasing land for a solar panel station. That logic can show you or oblige you to give land or not to give land for creating a solar firm. So, let’s take a look at some positive and negative contexts. 

Pros of Leasing Land for Solar Panels

In most cases, for making a solar power plant (ground-mounted or floating solar power plant), land is leased from the people. There are also some benefits to it. Let’s check them out. 

1. Consistent Passive Income

Making a solar power plant requires a large amount of land. To generate 10 MW of capacity solar power plant requires around 40 to 50 acres of land. Similarly, generating 100 megawatts of electricity in a solar power station requires 400 to 500 acres of land. Therefore, if a single-axis PV panel is used, then slightly more land may be needed, around 50 to 60 acres. To occupy this huge amount of land, the government or any solar power generation company pays a high amount to the land owners.

In most cases, the government or solar panel company pays a one-time payment or installment payment, or lease payment. That is paid to the land owner monthly basis. This payment is considered the passive income of the landowners. This payment will be continued till the land leasing agreement.

However, how much should be the cost per acre of land leasing for a solar power plant? It depends on some essential factors like country, location, land condition, etc. After that, let’s see a price range based on different countries and locations.   

• In the USA, the average solar firm leasing cost ranges from $250 to $2,000 or sometimes $5000 (depending on location).
• High-priority leasing costs can reach $3,200 to $4,500 per acre per year.
• In the UK, the PV firm land lease amount can range from £850 to £1,100 per acre per year.

Indeed, the solar power plant is built far away from the locality or a crowded place. Therefore, low-value priority land like desert, hilly areas where sunlight is available, such locations are chosen to make a solar power station like a concentrated solar power station, a thermal PV system, and others. So, the price of solar firm leasing costs can be different.

2. Long-Term Lease Agreements

A solar power station land lease agreement is a long-term agreement (20 to 30 years or more). Long-term agreement is done to ensure consistency of electrical power supply, safe tariff cost, PV panel longevity, and prove to be beneficial for further use. Therefore, during this long-term agreement, some other option may arise and new technology may come to generate electricity. In most cases, this agreement can enhance or extend for the next decades (if the result becomes good).

3. Low Maintenance Requirements

A solar panel company or solar power station company becomes beneficial by leasing land. In most cases, flat land is leased from the local people of any specific area where direct sunlight is available. In that case, the panel mounting system becomes easier, no need to add extra soil, becomes easier to install PV panels, cleaning and repairing the solar system with low cost, and so on. Solar panels need to be cleaned once after 3 to 4 months or 6 months (based on area). For this reason, flat land is superior for creating a solar power plant.  

4. Land Use Flexibility

After leasing land to the solar power generation company or government, different types of crops can be grown in the PV panel rows. Different types of crops or farming (sweet lime, Spinach, Jute leaves, Radish leaves, Sweet gourd, and others can be grown there. From those things, people can get green vegetables.

At another stage, to lease land for a floating solar power plant, people also get some benefits from there, such as fish farming. People can fish firming under the floating power station or water-mounted photovoltaic power station. So, these are the flexibility that those who lease land for a PV power station.

5. Environmental Contribution

Solar panel-generated energy is a clean energy. It has no harmful effect on the environment. Solar panel-generated energy has almost zero carbon footprint or zero carbon emissions. Using solar panels, we get clean and environmentally friendly energy instead of other commercial electricity generated by natural energy resources (coal, oil, gas, etc.). So, get clean and renewable energy without environmental effects and animal as well.  

Cons of Leasing Land for Solar Panels

All the things must have demerits. Leasing of land for solar panels has some demerits. Let’s discuss them in detail.

1. Long Term Commitment

A solar power plant can easily last from 25 to 30 years. It is a long duration; this duration can increase according to the plant outfit, and the generated power supplying capacity. In that case, a land owner is likely to wait for a long time, around 30 years, to get back his land. To start a solar power plant, a land leasing agreement is entered into on a long-term basis. So, wait for a long duration to get back your land.

2. Delay to Take Necessary Step

The world is revolutionizing rapidly, and technology is also developing geometrically. In that case, if you want to do any developing or innovative thing in your land, then you cannot. This is because you have already in an agreement (but not a solar power purchase agreement) land leasing agreement. Before ending your land leasing duration, you will never have an option to do any creative. 

3. Almost Impossible to Terminating Agreements

After leasing and building a solar power plant, it is almost impossible to get back the leased land again. It has been seen that most leasing agreement contracts last around 25 to 30 years. So, if you have a new idea, then you cannot implement it. This is because making a solar power plant is expensive, and solar panel companies invest here for a specific duration. For this reason, if once agreement is made, then you are locked in for around 30 years.

4. Constant Payment for a Long Duration

It is true that, solar firm leasing land payment is constant. Suppose you have signed a 30-year land leasing contract for 70000 USD. This amount is fixed, and no extra amount will be increased for a 30-year contract. It’s one of the biggest drawbacks for the landowners. So, make a decision before engaging or signing a land leasing contract.

However, on overall consideration, there are many advantages of leasing land for solar plants. It is a good way for those (land owner and solar power plant installation company). Leasing a contract means that they are occupying land forever. It’s a specific time of contract between them. It should be a boost for the land owner that I am giving land for generating electricity from a renewable energy source that will help thousands of people.

How Do You Know if Your Land Qualifies for Solar Leasing?

Not all types of land are suitable for making a solar power station (concentrated solar power plant, mirror-type PV station, etc.). Some essential things can let you know that your land is suitable for a solar firm. Let’s see them in short.

• Available direct sunlight hits the land most of the time of the day.
• Land Size should be at minimum 10 acres for the small solar firm (residential solar system, or rooftop solar system).
• Ensure that your land is flat or gently sloping terrain.
• Land must be well-drained, and stable soil is ideal for solar panel installation.
• PV firm land should have closer access to power lines or electrical substations to improve.
• Ensure that land is free from wetlands, flood zones, and has a better way of water sewerage system.
• Land ownership must have a clear title or rights to lease the property.

Can I Lease My Land to A Solar Company?

Yes, of course you can. If your land becomes eligible to make a PV station and meet the above requirements (direct sunlight is available, flat land, sufficient area to create a PV station, etc.), then of course you can lease solar panel company. Leasing land to PV panel installer companies or solar farm leasing companies will give you a better monthly earning source, increase property value, and decrease property Tax as well.

How Much Do Solar Companies Pay to Lease Land?

Land leasing cost becomes different according to land condition, location, country, and agreement longevity. In the USA, solar companies offer land lease cost that ranges from 700 USD to 2,000 USD per acre per year. In some cases, this payment system or cost may go up to $4,500 per acre per year. However, let’s see the latest land leasing cost in the USA by state.

• In the general US Market, most landowners get between $700 and $2,000 /acre/year.
• Illinois, Indiana, depending on factors like land quality, this charge can range from $500 to $4,500 /acre/year.
• Pennsylvania, Maryland, and New York Lease rates are between $700 and $1,200/acre/year.

Why Do Solar Companies Lease Land Instead of Buying?

This is because leasing land is more flexible, no hassle of paperwork, leasing cost is comparatively lower than purchasing land, financially manageable, etc. Indeed, people do not sell land, and leasing is available compared to selling land. For this reason, the PV system company owner looks for leasing land instead of purchasing.

Can I Buy Solar Energy System at the End of the Lease?

Yes, in a residential a solar system, you can buy solar system after ending your land leasing agreement. In that case, you can grab its ownership and can supply power to your adjacent residence according to the solar power purchase agreement. In a commercial solar power station, you can also get the ownership after beyond the agreement term limit.

Can I Still Farm Around the Panels?

Yes, you can farm around the photovoltaic solar panels. In that case, you must remember one thing so that your farming crops will never be a reason for shading. You must also be careful that your farming never interrupts for cleaning solar panel system. This is because PV system output power relies on the PV panel efficiency, and efficiency depends on how clean the panel system is.

Final Thought

According to the US energy security and renewable energy expansion, the solar panel system has already created a revolutionary invention in the USA and globally. There are a demerits of solar power station that is “land”. A large number of place is required to create a solar power station compared to its output energy. However, all things have advantages and disadvantages. We have referred here the best pros and cons of leasing land for a solar panel station, and discussed some crucial things related to leasing land. Hopefully, that would be worth you. So, stay with OPENREAD and get the innovative, creative, and updated information.

Is Buying Land for Solar Farm Good Idea?

Yes, buying land for a solar farm can be a good investment if the location has strong sunlight, access to the grid, favorable regulations, and demand for clean energy. Therefore, it also depends on land cost, solar power, or the solar panel installer company’s interest and mindset. If they think that they want to continue with this firm for a long time, 30 to 50 years, then purchasing land would be the best idea. Because leasing land for 30 to 50 years will take a lot of money.

On the other hand, if land purchasing costs become higher, and a power plant can last around 20 to 25 years, then leasing land may be the best choice.  

Is Leasing Land for Solar Panels Station Right for You?

It has both strong logic: to lease land for the solar firm, and not to lease land for the solar firm. By overall observation, leasing land for a solar power station is the right decision due to

• Monthly income (rent).
• No hassle for Tax and reduce the risk of property Tax.
• A chance to contribute to spreading renewable energy to people.
• Environmental contribution.
• Get respect in society as a land donor.

Is Selling Land to Solar Company a Good Decision?

Land property is a very valuable asset. In most cases, solar panel companies pay a high cost for land according to its value. But you should think more. However, it may be a good decision to sell land to a solar company to create a solar power station.

In that case, follow the pros and cons of selling and leasing land for a solar panel station and make the decision which thing you want to do (want to sell, or not to sale). If you think that it is an idle land and it is not creating any value for me, then you may sell it, otherwise, you may give it a mortgage or lease to a company.

What Land Is Best for Solar Farms?

A bit away from the main city, or out outskirts of the city, Flat land, and slop land where direct sunlight is available. It may be a hilly area, a high-altitude place where there are no big trees, and a solar panel will get at least 6 to 7 hours of direct sunlight. Such a place or land is suitable for solar firms.  

How Long Is a Solar Lease?

A land lease for a solar firm can last up to 30 years. If necessary, then it may extend to 5 to 10 years. It is noted that solar panels can last 25 to 30 years. So, land leasing or PP agreement may be long duration.

What Is the Minimum Land Size for A Solar Farm?

It depends on solar power generation capacity, and panel watt capacity. On average, a 1 megawatt solar power plant requires 4 to 5 acres of land. If you have a 20 megawatt capacity solar farm, then it requires 80 to 100 acres of land. For 100 megawatt (MW) ground-mounted solar firm requires 400 to 450 or 500 acres of land.  

How Much Is Solar Farm Minimum Size?

It depends on how much power or electricity you want to generate. In most cases, 10 to 15 acres of land is required to make a minimum capacity of a solar firm.