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Solar Farm Leasing in South Carolina

Solar Farm Leasing in South Carolina

What Should Landowners Know About Solar Farm Development in South Carolina?

Over the recent years, South Carolina has seen a noteworthy shift in its energy landscape, mirroring broader national trends toward renewable energy adoption. This transition has been significantly propelled by the state's growing interest and investment in solar energy, making it a promising market for solar farm development. Landowners in South Carolina now have the unique opportunity to contribute to this clean energy shift by leasing their land for solar farms, a move that not only supports renewable energy generation but also offers them a steady income stream.

South Carolina’s focus on expanding their renewable energy network, particularly solar farms, not only supports the state's renewable energy goals but also provides a stable income for landowners. Duke Energy Carolinas' 2020 solicitation for solar farms aimed to fulfill requirements under the South Carolina Distributed Energy Resources Program Act, targeting projects between 1 MWac and 10 MWac and necessitating at least 20 acres of land. 

Solar farm lease rates in South Carolina range from $500 to $750 per acre annually, with potential annual earnings for landowners ranging from $15,000 to $75,000, plus an annual escalation and coverage of property taxes by the solar development company. With 108 active solar farms and a total capacity of 1503 MW, South Carolina is becoming an increasingly attractive market for solar energy development.

As of February 2024, South Carolina is one of the most active states for solar farm activity and development. Their exponential growth is a direct result of the implementation of various incentives promoting renewable energy generation across the state. Many solar developers are actively planning new projects across the state. This presents a great opportunity for landowners to earn a steady stream of income from their land through solar lease payments, also known as solar payments. 

Landowners in South Carolina 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 South Carolina 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.

south carolina solar farm growth throughout the years

What is the Process for Leasing Land for a Solar Farm in South Carolina?

Step 1: Solar Lease Negotiation Period in South Carolina

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 to combat inflation.

Step 2: Solar Lease Option Agreement in South Carolina

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 South Carolina 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 South Carolina 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 South Carolina?

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 South Carolina

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 South Carolina

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 South Carolina?

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 South Carolina

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 South Carolina?

In South Carolina, the average solar farm size is 116.1 acres producing 13.9 MW of electricity under ideal conditions. This output has the potential to cater to the energy needs of around 2000 households as the typical electricity consumption of an average household in South Carolina stands at 16,680 kilowatt-hours per year.

Federal & South Carolina State Tax Incentives for Solar Developers:

South Carolina offers several solar development incentives, on the state and federal levels, that make solar power more accessible and affordable. These incentives reduce installation costs and increase the economic appeal of solar projects for residents, businesses, and developers. 

The measures include tax credits, net metering, and property tax exemptions, among other incentive programs. 

Solar Development Incentive



South Carolina Solar Tax Credit


This credit provides a reduction of 25% of total solar installation costs, up to $3,500. This benefit can significantly help diminish the overall cost of switching to solar energy.

Renewable Energy and Energy Storage Property Tax Exemption


The state of South Carolina offers a 100% property tax exemption as well. This applies to residential solar installations with a maximum capacity of 20 kW. Thus, the added value to property from solar energy does not increase property taxes for residents.

SCE&G Net Metering program


Net metering is a mechanism that credits residents with solar energy installations for the electricity they add to the grid. Thus, South Carolina residents may cover their electricity bills using the solar power they generate.

Federal Solar Tax Credit (ITC)


This incentive offers a 30% deduction in the cost of installing a solar system from federal taxes. It is valid for residents until 2032.

Other Incentives

RPS Goals: South Carolina has a voluntary Distributed Energy Resource Program. The legislation allows participating utilities to recover costs connected to meeting a 2021 target of 2% aggregate generation capacity from renewable energy sources. 

  • 1-10 MW: Facilities sized between 1 MW and 10 MW will make up 1% of aggregate generation (50% of the total target)

  • < 1 MW: facilities sized under 1 MW will make up another 1% (another 50% of the total target).

Once a participating utility satisfies the minimum 2% requirement, the utility may invest in renewable energy facilities between 1 MW and 10 MW with a cumulative installed capacity equal to one percent of the utility's previous 5-year retail peak demand average.

Voluntary distributed energy resource programs have been adopted by Duke Energy Carolinas, Duke Energy Progress, and Dominion Energy South Carolina. Currently, solar energy makes up 2.35% of total energy generation in South Carolina.

Santee Cooper Rooftop Solar Rebate Program: Specific to Santee Cooper customers, this program offers a rebate of 95 cents per watt for installed solar systems, up to a maximum of $5,700, for systems up to 20 kW.

Berkeley Electric Cooperative: Offers a loan program for homeowners to make energy-efficient changes to their home, with up to $15,000 in loan money at a fair interest rate. This can be beneficial for those looking to install solar panels but are concerned about the upfront costs.

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, South Carolina has experienced a 4% decrease in PPA.

In the context of solar energy projects in South Carolina, 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 that 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). This combination has aided in the rise of solar projects in South Carolina. 

current solar farms in south carolina

Commercial, Community, & Behind-the-Meter South Carolina Solar Farms 

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 South Carolina, the average solar farm size is 116.1 acres producing 13.9 MW of electricity under ideal conditions. So a solar farm in South Carolina needs an average of 8.3 acres per MW of capacity.

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. 

Community solar farms in South Carolina serve energy customers directly within the same area or community. These solar farms tend to be smaller in size about acreage and megawatts. Community solar is different from residential solar as residential solar panels are found on top of rooftops. Community solar projects can be larger, it just depends on the location. 

Commercial, residential, and industrial solar farms are all considered to be behind-the-meter solar farms. Behind-the-meter means that they are intended to generate power primarily for on-site consumption rather than selling it to the grid. Community solar and utility-scale solar farms generate energy that is utilized in the grid to send it to all consumers a part of that grid. This means that they are front-of-the-meter solar farms. 

Discover Land’s Value For Solar Leasing in South Carolina

The solar energy industries within South Carolina 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 South Carolina 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.


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