Key Takeaways:
Oregon has 1,815 MW of solar capacity and plans to add 2,161 MW in the next five years, driven by a $3.1 billion investment.
State and federal incentives, including tax credits and net metering, support the growth of solar energy.
Landowners can lease land for solar farms, gaining financial stability; LandGate assists by providing land valuation data and connecting landowners with developers.
About 20% of solar options transition to leases due to infrastructure bottlenecks.
Solar farms significantly contribute to local energy needs, with an average farm generating 10.53 MW.
What Should Landowners Know About Solar Farm Development in Oregon?
As of August 2024, Oregon is making significant strides in the solar energy sector with 1,815 MW of installed solar capacity. While the state currently ranks 24th in terms of solar capacity generated, Oregon has seen a substantial investment of $3.1 billion in solar energy which has spurred further investments. Over the next five years, Oregon is projected to add another 2,161 MW of solar capacity.
Solar energy in Oregon currently powers approximately 233,262 homes. Notable policies such as the Renewable Energy Standard and various state and federal incentives support the growth of solar manufacturing and installations across the state. Companies like Pacific Power and Portland General Electric are playing a pivotal role, with significant investments in solar manufacturing facilities, enhancing the state's renewable energy infrastructure.
Landowners in Oregon are receiving offers from developers to lease their land for solar farms. They often wonder how much their land is worth for a solar farm and if they are receiving a good offer. Leasing land for solar farms helps landowners provide their future generations with long-term financial stability. Several factors go into solar farm valuations that landowners and realtors should consider.
LandGate is a marketplace that provides data intelligence to landowners while also providing them the opportunity to connect with Oregon solar developers. Traditionally, developers would knock on landowners' doors or cold-call them. This old-fashioned way is not easy for landowners. It can be perceived as unwanted solicitation at a time when the landowner is not ready and doesn’t have enough information to feel comfortable talking about a solar farm on their land.
LandGate provides useful data to landowners or to their agents to inform them for free about the value of their land for solar farm leasing. Equipped with more information, landowners can make good and fast decisions about pursuing a solar lease.
What is the Process for Leasing Land for a Solar Farm in Oregon?
Step 1: Solar Lease Negotiation Period in Oregon
The solar lease negotiation process is the first step landowners take when interested in having a solar farm on their property. Land professionals can assist landowners during this period to make sure they are receiving the best deal possible but also understand the period between signing the lease and having an active solar farm on their land.
During the negotiations, landowners can negotiate solar lease payments, the length of the lease for the solar farm, and the percentage of the escalator is to combat inflation.
Step 2: Solar Lease Option Agreement in Oregon
The next step is for the landowner to get a solar farm option agreement. At that point, the solar developer has done a preliminary study, also called a feasibility study, to know if the site is potentially suitable for solar farm development.
Why Can’t I Get a Solar Lease Agreement Directly?
The process of a solar farm project in Oregon begins with optioning the land, which is called “site control” by developers. The reason solar developers cannot go straight to a solar lease is that they have to evaluate the land thoroughly.
Typically the initial screening study is good enough that this first due diligence process is all that is needed. Another larger uncertainty for solar developers is to know if the solar project will be accepted by the utility on the electrical infrastructure (or electrical network). We refer to this phase as “utility’s application” in the graph above and developers refer to this phase as “queue submission”. This means that the solar project enters the interconnection queue of that region waiting for regulatory approval.
These queues are known as Independent Systems Operator (ISO) or Regional Transmission Organization (RTO).
During this period, the analysis of possible engineering and land factors is conducted to determine the feasibility of the project to be constructed and connected to the grid. This is the reason why the solar developer starts with an option, as not all solar projects are approved by the ISO/RTO.
How Likely Will My Oregon Solar Option Become a Solar Lease?
At the moment, about 20% of solar options become a solar lease and are built into a solar farm. Currently, the electrical infrastructure network is a big bottleneck. There are more applications of solar projects to get on transmission lines than available capacity.
However, governments are aware of this situation and are working to ease it, to foster more solar development. This means that it will likely get resolved in the next few years. The problem of available capacity applies only to utility-scale solar farm projects, which are typically greater than 5 MW capacity.
Where Can a Landowner Get More Information About the Solar Lease / Option Period in Oregon?
LandGate assists landowners with determining the value of their land for a solar farm. We do this by taking into account the proximity of substations, transmission lines, and state incentives - each of which plays a role in site control.
Am I Getting Paid During the Solar Option Period?
Yes. Solar payments start during the option period but are usually smaller compared to the solar payments during the lease or construction phase of the solar farm.
Step 3: Solar Lease Agreement in Oregon
Once the availability of grid capacity is confirmed, the solar project is moved to a “planned” phase. During this time, the developers will exercise the solar farm option agreement to become a solar farm lease agreement. Typically larger solar rent payments start at this time.
Step 4: Solar Farm Construction in Oregon
Solar payments are phased as the project progresses. It starts with small solar lease payments during the option phase. Then it increases during the solar lease phase, it increases again during the construction phase of the solar farm, and the largest solar payment occurs when the solar farm is active and generating electricity.
How Long Does It Take to Build a Solar Farm in Oregon?
Usually, it will take between 1 to 2 years to build a utility-scale solar farm. It takes less time to build a community solar farm since they are usually smaller in size.
Step 5: Active Solar Farm in Oregon
After the construction has been completed, the solar farm is now considered ‘active.’ For landowners, this phase is called ‘production,’ as it signifies that their land is currently producing energy for the electrical grid that it is interconnected with. The production phase lasts anywhere from 25 to 50 years depending on what was negotiated on the lease.
What Can a Solar Farm Power In Oregon?
In Oregon, the average solar farm size is 166 acres generating approximately 10.53 megawatts (MW) of electricity when operating under optimal conditions. This output has the potential to cater to the energy needs of around 8,541 households as the typical electricity consumption of an average household in Oregon stands at 10,800 kilowatt-hours per year.
What is the Impact of the IRA and Other Factors in Oregon?
There are several federal and state incentives available for solar development in Oregon, intended to encourage the use of solar energy by making solar power more affordable for businesses and organizations that install solar systems. These incentives can improve the financial viability of solar projects since they lower the initial costs and increase the return on investment.
Solar project incentives aid in the switch to clean, renewable energy sources, which lower greenhouse gas emissions and slow climate change. Incentives aid in increasing the deployment of solar projects by making solar energy more financially appealing, replacing fossil fuel-based power, and lowering the environmental effects related to traditional energy sources.
OR Solar Development Incentive | Type | About |
Renewable Portfolio Standard (RPS) | State | Oregon's RPS requires that 50% of the electricity provided by large utilities come from renewable sources by 2040. There are also specific carve-outs for small-scale renewable projects and community solar programs. |
Federal Solar Tax Credit, Solar Tax Credit (ITC) | Federal | The ITC provides a 30% tax credit on the cost of solar system installation for residential and commercial properties, available through 2032. This federal incentive applies nationwide, including in Oregon. |
Renewable Electricity Production Tax Credit (PTC) | Federal | The PTC offers a per-kilowatt-hour (kWh) tax credit for electricity generated by qualified renewable resources, including solar energy. The credit applies to electricity sold to an unrelated third party for up to 10 years. |
Renewable Energy Certificates (RECs) | State | Oregon allows solar system owners to generate RECs, which can be sold to utilities or other buyers to meet their renewable energy obligations. Each REC represents 1 MWh of renewable electricity generated. |
Energy Trust of Oregon Solar Incentives | State | Energy Trust of Oregon provides cash incentives and support for residential and commercial solar installations. The incentive amount is based on the system size and expected energy production. This program helps reduce the upfront cost of going solar. |
Property Tax Exemption for Alternative Energy Systems | State | Oregon offers a property tax exemption for the added value of renewable energy systems, including solar. This exemption helps reduce the overall cost burden for property owners who install solar systems. |
Net Metering | State | Oregon’s net metering policy requires utilities to credit customers for the excess electricity generated by their solar systems at the retail rate. This credit can be used to offset future electricity use, effectively lowering utility bills. |
Oregon Clean Energy Fund (OCEF) | State | The OCEF offers low-interest loans and financial assistance for the development of renewable energy projects, including solar installations, throughout the state. This fund supports both residential and commercial solar projects. |
Oregon Solar + Storage Rebate Program | State | This program offers rebates to homeowners and low-income service providers for the installation of solar electric systems and paired storage systems. The rebate amount varies based on the system type and applicant category. |
The combination of federal incentives, state-specific programs, and financing options make solar energy projects significantly more accessible and financially attractive in Oregon. These incentives are designed to encourage the adoption of solar power, reduce greenhouse gas emissions, and support the transition to a more sustainable energy future.
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The expected increase in LMP pricing has made solar energy an attractive option for electricity generation in Oregon. LMP is a pricing method used in electricity markets to determine the cost of electricity at specific locations (called ‘nodes’) within the electrical grid.
A PPA (Power Purchase Agreement) is a contract between a renewable energy developer (such as a solar company) and a power purchaser (such as a utility). Over the last three years, Oregon has experienced stable PPA pricing, and an average LMP price increase of 8.32% (this is expected to decrease by 29.22% in 2025).
In the context of solar energy projects in Oregon, the relationship between LMP and PPA pricing lies in how the PPA sets the pricing terms for the electricity being sold. The fixed price in the PPA provides certainty to the solar developer about the revenue they will receive for the electricity they produce.
Meanwhile, the LMP serves as the market price for electricity at a specific node. When the LMP at a particular node in the grid is higher than the contract price specified in the PPA, it benefits the solar company, as they will receive the contract price and sell the electricity at a higher market price (increasing their revenues). Oregon has seen an increase in LMP over the past three years. This combined with stable PPA pricing, has made Oregon an attractive option for consumers and developers of electricity. This combination has aided in the rise of solar projects in Oregon.
Typically, landowners and land professionals think of solar farms as huge plots of land covered in solar panels out in the middle of nowhere. However, this usually is not the case! In Oregon, solar farms are typically 166 acres, allowing about 10.53 MW of electricity to be produced per farm under ideal conditions.
Commercial, Community, & Behind-the-Meter Solar Farms
Oregon has witnessed notable growth in community and distributed solar generation. The state is actively developing a pipeline for small-scale solar projects, and there has been significant discussion regarding community solar programs.
In 2015, the Solar Power Free-Market Financing Act was passed, making it easier to finance solar installations. Building on this, Oregon's community solar programs, supported by Oregon Power and various EMCs, allow residential, commercial, and industrial customers to benefit from solar energy collectively. Overseen by the Oregon Public Service Commission, these programs offer subscription models, enabling participants to share in energy credits, thus making renewable energy more accessible statewide.
Below is a list of key community solar installations in Oregon.
Key Installations in Oregon | |
Project | Project Details |
Boeing Solar Project |
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Outback Solar Project |
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Eugene Community Solar |
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Benton County Solar Farm |
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Pine Grove Solar Project |
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Commercial solar projects are the commonly largest energy projects being about 40+ acres of land. These solar farms usually feed their energy into the grid to the surrounding area. Realistically these solar farms can be any size as it depends on the capacity available within the grid.
Discover Land’s Value For Solar Leasing in Oregon
The solar energy industries within Oregon are growing to achieve energy goals for clean energy development. This makes it easier for landowners and real estate agents to participate in solar development deals. Landowners in Oregon can receive a free solar leasing estimate by identifying and claiming ownership of their parcel on our map.
Realtors can assist their clients in learning about their property’s potential for solar energy by using LandGate. Land professionals can utilize LandGate’s data and analytics to provide their clients with information about their resource’s potential.
