What Landowners Need to Know About Leasing Land for Community Solar Projects

By Jim Auld, Director of Site Acquisition

As the U.S. transitions toward solar and other renewables, more landowners with unleased and underperforming agricultural acreages are learning about leasing their land for small solar projects. These long-term leasing contracts can not only benefit the community with jobs and tax revenue, but also financially benefit the landowner and their heirs for 30 years or longer.

But what exactly does this solar leasing and development process look like? How will building a solar project affect your land today and in the future? This post will explore the steps for leasing your land for community solar and small-scale utility solar projects.

A Track Record for Successfully Working with Landowners

Since 2017, Renewable Properties has successfully worked with landowners to provide a steady leasing income for underutilized land assets that could be repurposed for solar projects. We’re proud to have a track record of solar land leasing partnerships in 15 states. The key to our success is transparent and frequent communication with our landowner partners. See our video landowner testimonials.

With that in mind, here’s a four-step process that describes what happens when you lease your land for a community solar project.

Step 1: Site Due Diligence and Evaluation – Understanding the Land’s Solar Potential

Before any leases are signed or solar panels installed, the first step is evaluating your land’s suitability for developing it for a solar project. This process involves a due diligence period, where our environmental, engineering, and site acquisition experts assess your land parcels for sunlight exposure, soil type, applicable environmental and permitting regulations, and the land’s proximity to existing electrical infrastructure.

During this stage, our team will also conduct an interconnection investigation to determine how the solar project could connect to the local power grid and any related costs charged by the utility. This step is critical because a smooth grid connection ensures that the energy generated on your land can be generated for the local grid without major disruptions or prohibitive costs.

Step 2: Financial Modeling and Land Contract Negotiation

If your land is judged to have great potential to generate solar energy and cost effectively connected to the grid, Renewable Properties will use financial modeling tools to estimate the long-term revenue potential of the project. This report helps us to make sure that the project will be a long-term economically viable partnership.

During this process, we’ll also start landowner contract negotiations. Together, we’ll review the specific terms of the lease, annual compensation, and each partners responsibilities during the solar development, operations, and the process of removing the equipment after the leasing term, typically 30 years.

Step 3: Solar Lease Option Period – From Site Control to Construction

Once an agreement is reached, the project enters the option period, where the solar developer secures a critical step to ensure they have the exclusive right to lease your land for the solar installation. This is often done through an option agreement that locks in the land for a set period, typically several years.

During this phase, several important tasks occur in parallel:

• Final grid Interconnection studies will secure a time to connect to the power grid, ensuring everything is aligned for a successful installation. Securing a time slot on “the interconnection queue” is critical for starting and completing construction.
• A Power Purchase Agreement (PPA) is negotiated. Utilities most often buy solar energy from Independent Power Producers (IPPs) like Renewable Properties. The PPA is a contract that determines how the electricity produced will be sold to utilities.
• Renewable Properties will secure entitlements and permitting from local and state authorities to ensure the project complies with all regulatory requirements.
• Detailed engineering work is completed to design the solar system, ensuring it will function optimally on your land.
• If not already in place, financing agreements and investment tax equity (ITC) partners are secured to fund the construction and operation of the project.

Once all these components are in place, the project moves into the final stages of construction. At this point, the solar panels, inverters, trackers, and other electrical infrastructure are installed, transforming your land into a clean energy powerhouse.

Step 4: The Lease Term – A Long-Term Partnership

Once the construction is complete, the project enters the lease term phase. Per the landowner’s lease agreement, you’ll receive steady lease payments for 30 years or longer. In terms of your property, here’s what to expect during this period:

• Project commissioning is the final step before the system goes live. Commissioning ensures that everything is functioning properly and that the project is ready to deliver electricity to the grid.
• Once operational, the project enters its commercial operation phase, generating local renewable energy for your community’s grid.
• Throughout the leasing term, Renewable Properties will be responsible for the operation and maintenance (O&M) of the solar project, ensuring the system runs smoothly throughout its life. Taking care of the facility includes regular on-site visits as well as remote monitoring software that tracks how much power is being generated and identifiesany downtime or maintenance issues in real-time.
• Our local maintenance partners will also perform regular grass and ground cover maintenance and professional solar panel cleaning services, helping to ensure maximum energy production.
• The solar project will include some type of fencing border, often with natural shrubs and trees, which will also have a dedicated entrance for our O&EM technicians and maintenance crews.
• At the end of the leasing term, Renewable Properties will be responsible for removing all solar panels and related equipment and restoring the land to the specifications of the leasing agreement.

Your Land, Your Legacy

Leasing your land for a community solar project offers more than financial benefits—it’s an opportunity to leave a legacy of sustainability. By turning your property into a source of clean, renewable energy, you’re contributing to the future of your community and playing a vital role in the global transition to green energy.

The above process may seem complex, but with the right partners and clear communication, it can be a seamless and rewarding experience. By understanding each step—from site evaluation to long-term maintenance—you can make informed decisions that maximize the value of your land and ensure a brighter future for all.

For more questions about leasing or selling your land for solar project development, contact us to speak with one of our site acquisition experts.