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Which Factors Impact Whether or Not a Solar Project Enters the Production Phase?


aerial photograph of a solar farm near a river and houses

Property owners across the country are receiving lease offers from solar developers across the country to lease their land for solar energy development. However, only about 20% of these planned solar projects make it through the option period into the development phase.


Signing a solar lease agreement with a solar energy developer does not guarantee that the solar project will actually be constructed and begin producing clean energy. Typically, a solar lease starts with an option period, which is the 2-5 year team that the solar company conducts their due diligence to ensure that they can begin construction. During the option period, the solar developer conducts environmental studies, designs the layout of the solar farm, and works to get the proper permits and approvals from local regulatory bodies. The solar farm development may stall out in this phase depending on many financial and regulatory considerations. In this guide, we will explore the different factors that affect the probability that a planned solar project enters the development phase.


Geographical & Environmental Restrictions

Solar projects must undergo comprehensive environmental assessments to ensure that they do not have any adverse effects on the local wildlife, water sources, or protected areas. These assessments take into consideration various factors, such as the potential impact on endangered species, migratory patterns, and the overall ecological balance of the area. Additionally, geographical constraints, such as the terrain and land usage, are carefully evaluated to determine the feasibility and suitability of the project. By conducting these thorough assessments, solar projects can be designed and implemented in a manner that minimizes their environmental footprint and maximizes their benefits for sustainable energy production.


Grid Connection & Infrastructure

The ability of the local power grid to efficiently absorb and distribute the generated solar energy, as well as the availability and suitability of the current infrastructure, play a critical role in determining the feasibility of solar projects. In some cases, the costs associated with necessary upgrades or grid connections can be prohibitively expensive, leading to challenges for solar project developers as they assess whether to proceed with their planned initiatives.


Permitting

Obtaining the necessary permits for a solar project can often prove to be a challenging and time-consuming endeavor. The process can be complicated and lengthy due to variations in permit requirements across different locations and states. This means that careful attention must be given to understanding and complying with the specific permit regulations applicable to each project's jurisdiction. By ensuring compliance with these requirements, project developers can navigate the intricacies of the permit acquisition process more effectively and expedite the realization of their solar initiatives.


Financial Viability

A solar farm's financial viability also impacts whether or not a solar project enters the development phase. Capital expenses, funding, subsidies, and anticipated returns on investment, are all very important considerations for solar developers. Similarly, solar project financial models may be impacted by changes in the energy market and prices. A drop in energy costs may reduce the appeal of solar projects. Additionally, project development depends on the availability of funds and advantageous financing terms. This can be affected by interest rates, investor confidence, and the state of the economy.


Government Incentive Updates

Modifications to government incentives or policies, including potential postponements or cancellations, may arise due to opposition from various stakeholders or local communities who have concerns or differing perspectives on the matter. It is important for policymakers to carefully consider and address these viewpoints in order to ensure effective decision-making and maintain public trust.


Technical Feasibility

In order to determine the technical viability of the solar project, it is crucial to conduct preliminary evaluations that take into account factors such as solar irradiance, appropriateness of the land, and the overall project design. These evaluations play a pivotal role in identifying any potential obstacles or unexpected technical difficulties that may arise, and subsequently impact the viability of the project. By thoroughly assessing these aspects, it becomes possible to ensure a comprehensive understanding of the project's feasibility and pave the way for successful implementation.


Leasing Land for a Solar Farm

Although there are many factors that impact whether or not a planned solar project enters the development phase, leasing land for a solar farm is still a terrific opportunity for property owners to earn income from their land and contribute to local energy generation. The best way for property owners to get the most value from their property is to enter it into a competitive marketplace, such as LandGate. By listing on LandGate, property owners can be sure that they are getting as many eyes on their property as possible from high-intent solar developers that use the platform to plan and source new projects.



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