Selling or leasing your land for a solar farm

What do solar developers look for in land?

University extension guides agree on the basics. The University of Missouri says developers want land next to uncongested transmission lines and substations. It also says they want flat or gently sloped land, and that projects typically cover at least 25 acres.

Penn State Extension says developers want easy access to high-voltage power lines near electrical substations. Without that access, the property will probably not be considered. Other factors include slope, soils, shading, wetlands, access and nearby homes.

• Close to a substation and transmission lines with room for more power.
• Flat or gently sloped, with little shade.
• Enough acres to make a project worthwhile.
• Clean title, with every owner willing to sign.

How much does a solar lease pay per acre?

Solar lease rates vary by state and parcel. A University of Wisconsin Extension fact sheet from September 2023 puts Wisconsin rates at $500 to $1,200 per acre. It says the main variable is how close the land is to a power substation.

The same sheet says rates also depend on land size, soil quality, location and distance to the grid. The power purchase agreement price matters too. It says higher-cost electricity markets such as California and New York lead to relatively high lease rates.

Penn State Extension says lease agreements tend to offer payment on a per-acre basis and that the amount offered has varied a lot across Pennsylvania. Get offers in writing and have an attorney review them.

Do solar developers lease or buy land?

Most utility-scale solar deals are leases. Penn State says the most common lease term is 25 years. The University of Missouri says leases are often 25 years or more with options to renew. You keep ownership and get rent.

Penn State also notes that extension options, often 5 or 10 years, usually belong to the developer, not the landowner.

What is an option period in a solar deal?

Many deals start with an option, not a lease. The University of Missouri says an option to lease is legally binding and gives the developer the right to lease the land later. Land use may be limited in the meantime.

Penn State says option terms are typically 2 to 5 years. It advises landowners to make sure no clause extends the option past its stated term, and to seek added pay if it is extended.

A letter of intent can also tie you down. The University of Missouri says it reserves your land for one developer and may limit your ability to talk to others.

What is decommissioning?

Decommissioning means removing the panels and equipment when the lease ends. The University of Missouri says the lease should spell out removal and that the developer should be responsible. It adds that a removal bond can help make sure the work happens if the company fails or goes out of business.

Penn State suggests asking an attorney how this promise will be enforced decades from now.

How does a solar lease affect selling later?

A long lease can make the land harder to sell. The University of Missouri notes the lease may be transferred to other solar farm owners. It also says lenders may be unwilling to accept leased solar land as collateral. A buyer inherits a long-term deal, or the lease must be ended.

If you want to sell, ask an attorney whether the option or lease lets you do so, and what the new owner would get.

What should I do before I sign a solar lease?

Joint owners must all agree to a lease, says the University of Missouri. It adds that clean title matters, because other owners, easements or rights can deter a developer. Sort out heirs and shared ownership first.

Penn State advises talking to an attorney before you sign an option, which it says could be in place for decades. It also warns that selling only part of a parcel can affect the acres you keep. Bring your goals to the attorney before the lease is final, not after.

When does a cash sale fit better than a solar lease?

A cash sale fits when no developer has made an offer or your land is far from a substation. It also fits when you want the money and the land question settled in one step. It also fits when you do not want a 25-year commitment.

Liberty Acres is a family-owned land company. We buy land anywhere in the US, in any condition, and close through a title company. We pay back taxes and all closing costs, with no agents and no commissions. We can close in as little as 14 days. Most sales close within a few weeks to a few months, once the title work is done. For larger parcels with development potential, we can sign terms that allow time for zoning and entitlement work. You keep title until closing, and the price can reflect the added value. See cash sale vs listing and the land value calculator.

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