Understanding Solar Land Leasing

FACT: Solar developers generally initiate the lease process with two written agreements. First is an Option Agreement (link to FAQ). This agreement sets a term (usually 2-3 years) during which the developer is to conduct feasibility, environmental and other studies in anticipation of obtaining the necessary governmental permits to start construction of the solar farm. A rental amount is set for the period in which the option is effective. The option is exercisable by the solar developer. 

FACT: The second agreement is the actual Lease.(link to FAQ) This will be the Lease that holds the property for 20-30 years. Leases are structured in different forms varying from company to company. Some use a ten-year initial term with options to renew for 5,10 or more years. The Lessee usually has the right to exercise any renewal.

PITFALL: Speculators and brokers are making a strong effort to tie up land with option agreements, without regard to the feasibility of constructing a solar development. Their business strategy is simple – tie-up YOUR land in the hopes of “flipping” (assigning) them to a credible developer. The speculator or broker makes significant income upon the “flip”.

FACT: Because we represent you, the landowner, we lead you to credible “world class development” through our due diligence. Our diligence includes communications with industry leaders, constant monitoring of trends and technology, and more. We perform the

this due diligence to identify the right developer for each individual landowner. Each developer seeks a specific size of in acreage. Some developers have a stronger history of constructing a solar farm than others. Some developers are considering multiple sites with the intention of building more than one. 

FACT: The financial incentive for a landowner is not in the Option Agreement(link to FAQ). An option agreement pays a minimal sum. The financial advantage to the landowner comes in the lease and construction of a solar farm. It is the mission of our company to identify for our clients: 1) credible solar developers with, 2) a history of constructing solar farms, and 3) providing leases with the best terms in the industry. Expert knowledge and information is key to landing a solar lease with great financial terms having the highest probability of being constructed.

FACT: Our firm has the experience landowners need by having managed tens of thousands of acres of property for rural clients. Our focus is upon the best interest of our rural landowners. Our obligation is to our clients. (intentionally bold) Our mission is to guide you to the best solar lease in the marketplace. We provide data and information to the landowner to allow them to make a knowledgeable and informed decision. While this opportunity may indicate that “time is of the essence”, undue urgency is not warranted. No landowner should be rushed or pressured into a solar lease without fully investigating the market and negotiating for the best terms. 

In summary, solar leasing is a complex process and should be undertaken with care.  

A Solar Lease (link to FAQ) provides many complicated terms, such as a yearly rental, provisions for rental increase in future years, renewals, de-commissioning, and more. Our goal is to help you make an educated decision with genuine developers and under the best terms possible. The sheer complexity of the industry speaks to hiring a landowner-focused consultant who can provide the experience and transparency necessary to guide you through the solar leasing process.  

 We want to make you money …not cost you money.