Community solar provides a net benefit to the community that it serves. But the possibility of a community-solar development depends on the willingness of farmers or other landowners to lease their properties for development. For a farmer with unused or underused land, deciding to lease that land to a community-solar company can be a good financial move and one that poses benefits to the local community. However, leasing land for long-term development is also a major decision that requires serious consideration—it’s important to gather facts and to ask the right questions. Below is a brief introduction to leasing land for community-solar development.
Assessing the Process
The lease terms could last up to twenty-five years, so before signing on the dotted line, farmers should ask clear questions about how the process will develop and about what to expect. This line of inquiry starts with an assessment of the land and its proximity to a power source, to make sure that it’s suitable for development. Given the proposed location, would the development risk violating any environmental laws? Next, farmers should ask about how the development of a community-solar project will affect farming activities and the rest of the property. How will farming practices be changed or affected because of the presence of the solar panels? Next, how long will it take to build the project? This timeframe can be up to one year for completion. Finally, how much is the company offering to lease each acre for? The range can vary significantly, so it’s important to get a good idea of the market rate. Sometimes, a developer will offer a high price per acre but might not actually plan on developing the land.
Agricultural land is subject to a number of tax exemptions, caps, and benefits. If that land is developed for non-agricultural use, it might be subject to a new taxation framework. By the same token, if a farmer’s land is subject to some kind of preservation agreement, that agreement might need to be amended in order for the community-solar project to proceed, which in turn could paint a new financial picture for the farmer. It’s important to check with the local municipality to make sure that developing community solar on the property is viable.
Benefits of Leasing
The benefits of leasing farmland for the development community solar are numerous. For the farmer, leasing farmland for solar development means generating a passive income that can be several times the property’s worth as agricultural land. That means a steady income from the property for up to twenty-five years. Leasing farmland also means contributing to the local green economy—helping to create green jobs and clean, renewable energy for use by local residents. It can be gratifying to see unused or underused farmland being put to active use as a community-solar development.