Best Practices for Solar Farm Land Leasing

Renewable energy sources are growing fast, driven by an influx of capital and rapid adoption of clean energy sources to supply the grid with cleaner energy.

The U.S. Energy Information Administration (EIA) estimates that the percentage of electricity generated from renewable energy sources is expected to more than double to 41% by 2050 from only 21% in 2021 (2022 Annual Energy Outlook). Solar farms and wind farms are expected to supply the majority of renewable energy supply with a combined contribution of 82% in 2050, up from 62% in 2021.

Solar Farm Land Requirements

Increasing solar energy supply requires the development and operation of solar farms, areas where solar panel arrays can be situated for optimal efficiency and proximity to the grid.

Solar farms vary greatly in size, depending on local regulations and their purpose. Community solar farms are smaller to medium-sized projects that typically require five to 40 acres of land. Utility scale projects, however, may need up to several hundred acres for just one project. The Solar Energy Industries Association® (SEIA) estimates that there are nearly 10,000 solar projects over 1 megawatt in operation or development in the United States, otherwise known as utility scale projects.

SEIA also provides a rule of thumb for developers of utility scale solar farms is that each megawatt of power requires about five to 10 acres of land.

Solar Farm Location Factors

Determining the optimal location for a utility scale solar farm is a function of several factors. Balancing the on-the-ground reality of zoning, regulatory requirements, transmission line locations and topography, the “ideal” location is usually a function of multiple compromises.

Solar farm location factors include:

Size of the project (number of acres required)
Regulatory requirements (cannot be constructed within a 100- or 500-year floodplain or near wetlands)
Distance to nearest distribution line (the closer, the better to keep costs low)
Zoning requirements (including county and municipal restrictions on solar farm location)
Site access (how difficult is it to reach the project site for ongoing maintenance and repair)
Topography (the flatter, the better)
Land rights owner (individual, state or federal government, etc.)

This list is not exhaustive, but it does provide some insight into the complexity of solar farm land requirements.

Best Practices for Solar Farm Land Leasing

Securing a long-term lease is a critical factor in solar farm project success. Without use of the required land for the duration of the project, typically several decades, and ongoing access to the site, a solar farm project is not viable.

The Best Practices for leasing land for solar farms include:

Mineral rights development check. Many areas ideal for solar farms are also home to Oil & Gas and coal development projects. It is important to know who owns the mineral rights to the proposed solar farm project area and what their development plans look like. In an Oil & Gas estate state, development of minerals takes precedence over surface owner rights. An active drilling program can impair what otherwise might be the best location for a utility scale solar farm project. An experienced land services company knowledgeable with oil & gas operations and with relationships in the industry can help you avoid major problems down the road.

Environmental stipulations. The owners of mineral rights and surface use rights are not always the same. In the case of state and federal lands, they almost always are identical. BLM lands are often ideal locations for solar farms, however, they also come with restrictive environmental stipulations. Sometimes, even private landowners may have specific stipulations that they want negotiated into a lease (e.g., not wanting to see solar panels from a specific vantage point on the property).

Site access. Leasing the right amount of land for a solar farm is one thing, but you will need ongoing access to the project site during the term of the lease, which may involve other parcels that are not controlled by the project site landowner. Make any land lease for the solar farm contingent on securing access to the site from any other parties that may be required.

Zoning. Multiple jurisdictions may have zoning authority for a potential solar farm location. County, municipal and village zoning laws might prohibit solar farms in specific areas to prevent nuisances to adjacent property owners. Going back to site access, will the regulatory regime permit the construction of access roads and associated infrastructure? Make sure you have the complete zoning picture before leasing land for a utility scale solar farm.

Lease term. It may seem obvious, but it bears mentioning that it is critical for all the leases, surface use agreements and associated rights-of-way have the same term.

Technology-Driven Land Services

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CHECK OUT TCO’S TECHNOLOGY PAGE FOR MORE INFORMATION ON TITLESUITE

TitleSuite is our technology platform for delivering land services more efficiently, productively, and accurately. That means projects get done faster, more accurately, and efficiently with complete transparency.

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TitleSuite Benefits

TCO TitleSuite delivers critical benefits for developers of utility-scale battery storage projects, including:

Complete electronic paper trail of documents to evidence title, substantiate potential minerals development and assure curative.
Clear and concise audit trail to make it easier for title and surety agencies to evaluate and rate project risk.
Speeds M&A due diligence so transactions get closed in an efficient and timely manner.