How Much Money Can a Solar Farm Make? | YSG Solar
As the solar industry has grown exponentially, so too has demand for land ro house larger and larger solar arrays. Projects have expanded massively in terms of scale and this has necessitated a push beyond the usual
commercialspaces for solar power companies across the country. With increased demand for space and increased investment in the renewable energy sector looking set to continue, there are
unique opportunities for landownersto use these developments to their advantage. Solar farms have been a big part of the global solar expansion, but how exactly do they turn a profit for the
Firstly, it’s important to note that a number of variables determine the value of the land and, thus, the rates of the solar lease.
#1 – Amount of Land
Solar farmsare usually quite large projects and will require a certain number of acres for a developer to be interested. A rough guideline for how many panels the land can hold is
1kW per 100 square feet. The amount of land required varies on a project-by-project basis, and you should also take into account the additional surrounding space that will be required for non-panel solar equipment.
#2 – Amount of Sunlight
Obvious as it may be, the land should receive
plenty of sunlight annuallyif it’s going to be viable for a
solar farm. Lots of obstructions means lots of shadows and this isn’t good news for a solar project. If there are some obstructions on your land, don’t give up hope immediately, removal is possible. Of course, removing these obstructions may not be realistic in some cases. Getting rid of a few trees or bushes should be okay, getting rid of a building, maybe not.
#3 – Grid Proximity
This is a huge deciding factor for solar developers looking to lease land for a
solar farm. If the necessary infrastructure to connect the solar farm to the utility grid isn’t accessible then it’s unlikely that the project will be able to advance. Even seemingly obvious infrastructure, like road access to the land, can be decisive. This kind of
infrastructure is expensive and difficult to build, so you definitely stand a better chance if your land is already close to the necessary components.
#4 – Soil Quality
This might sound like a concern for those involved in traditional farming pursuits more than those developing solar, but it’s an
important factornonetheless. If the land is unstable, difficult to build on, or covered with other debris and obstructions, then this could be a dealbreaker. Clearing the land could cut into a developer’s budget to the point where the project is not viable, and if the land simply can’t be built upon safely, well, that’s it.
If all these factors have been taken into account, and the value of the land has been determined, then it’s time to move on to the negotiation period. The solar developer will draft up a lease agreement to be reviewed by the
property owner. This lease will cover all the key points – the
monthly rent, the
acreage required, and the
length of the lease. Take care in this stage of the process and ensure that you’re happy and informed about all aspects of the lease.
So, how much money can a solar farm make for property owners? Well, according to
Landmark Dividend, the average solar farm profit per acre lands somewhere between $21,250 and $42,500. Of course, it’s very important to remember that these figures
vary wildly on a project-by-project basis, thanks to some of the factors we’ve discussed above. Actual profits can be much lower or, indeed, much higher. Solar farms spanning hundreds of acres can see profits in the hundreds of thousands.
By Shane Croghan