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Solar Leasing Questions Answered for Land Realtors

Updated: Nov 28

photograph of solar panels on grassland

Can land be used for other purposes with a solar farm present?

It is important to let landowners know that they don’t have to use all of their acreage for a solar farm if they do not wish to. If landowners would like to keep producing crops or housing animals, they can provide a certain amount of acres for their needs and the solar panels. Typically, commercial solar projects require at least 40 acres of buildable land. Actually, having grazing animals makes it easier to keep the grass growth lower without the use of special devices.

How long do solar leases typically last?

The option phase will typically last between 2 to 5 years and the development/operation phase will last between 25 to 50 years.

What does commission look like once a solar farm lease has been secured?

Commission earned on solar energy deals are typically treated similarly as commercial real estate commissions. Each realtor/broker will be paid based on their specific listing agreement with their client. In most cases, a percent commission of payments that are made over time are paid to the realtor/broker. Since solar leases can extend for up to 50 years, that means a solar energy lease commission could earn revenue for a land professional for a significant period of time. In other cases, real estate professionals have chosen to get paid upfront for their commission.

How can I judge if my client’s land holds value for a solar farm?

The best way to judge your client’s land for solar farm potential is by using LandGate’s LandApp tool. This tool has all of the data needed to discover the value of your client’s parcel. The distance from substations, transmission lines, and distribution lines are important for determining value. The type of land is also imperative when determining value since wetlands are the worst type of land for a solar farm.

What type of land is best suited for a solar farm?

Solar developers are usually seeking out flat land with no obstructions and absolutely no wetlands and nearby suitable electrical infrastructure.

What is the difference between a community solar farm and a commercial solar farm?

Community solar farms are a smaller scale of harnessing and dispersing the energy generated. The energy from the solar farm is typically used within the surrounding community, for example households in a neighborhood can become a community solar farm.The number of solar panels typically ranges between 15 to 20 panels and generate between 1 to 10 kilowatts of energy. Commercial solar farms are large scale farms that are meant to provide more significant energy amounts. On average, the amount of solar panels needed for a commercial solar farm are about 400 panels in order to generate 10 to 100 kilowatts. These solar panels are also different from the ones used in a community solar farm. They are larger and heavier solar panels meant to increase efficiency.

How does a battery storage lease/sale differ from a solar lease offer?

The biggest difference between battery storage and solar energy development is the amount of acreage that is needed. Battery Storage projects are far more concentrated and only require 2-40 acres of buildable land. Historically, battery storage developers will also attempt to acquire the property versus leasing the property. Current practices are moving to include battery storage with solar farm development where landowners could find themselves leasing their property for a combination of battery storage and solar development. $/acre rates for battery storage can be significantly higher than rates for solar development so be sure to get as many offers as possible to know that you are getting the best deal for your client.

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