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Questions to ask before you lease your land to solar companies

On Behalf of | Nov 3, 2023 | Real Estate

The U.S. Energy Information Administration reported that there are over 5,000 solar farms in the United States. As renewable energy gains momentum, many landowners find themselves approached by solar companies looking to lease land for solar installations. This presents an opportunity for property owners to generate a steady income stream.

However, like any business venture, it requires a thorough understanding and careful consideration before jumping in. To ensure that you make an informed decision and safeguard your interests, you should ask pertinent questions when considering such a lease.

What is the length of the lease?

The duration of the lease agreement is important. Solar projects can last for several decades, so you will want to know how long the company plans to use your land. This helps you plan for the future and understand the long-term implications of the agreement.

How much will the company pay you?

Determine how the company calculates payments. Is it a flat rate, or is it based on the energy produced? Ensure you know the frequency of payments too – monthly, quarterly or annually.

What happens at the end of the lease?

When the lease term ends or if the company decides not to proceed with the solar project, what will happen to your land? Find out if the company will restore your property to its original state. This includes the removal of solar panels, structures and any other installations.

Who is responsible for maintenance and repairs?

Solar installations require regular maintenance. It is important to know who will handle this – the company or you. If you bear any responsibility, understand what that entails and if there are any associated costs.

Are there any restrictions on land use?

Solar projects often need specific conditions to operate efficiently. Ask if there are any limitations on what you can do on or around the leased land. For instance, are you restricted from building structures that might shade the panels?

How will the solar installation affect property taxes?

In some cases, the addition of a solar installation can alter the valuation of your property. It is essential to determine if your property taxes will increase and, if so, who will cover the additional cost.

Leasing your land to a solar company offers the promise of consistent revenue, but it is a significant commitment. By asking the right questions, you can ensure that the agreement aligns with your expectations and protects your interests. Remember, knowledge empowers you, so equip yourself with all the necessary information before making a decision.


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