It can be difficult to figure out how to best use a large piece of land you own. Using the land for agriculture or development can help you achieve your investment goals, but it can also involve many uncertainties and risks. One option that does not involve any uncertainty or risk is leasing the property and building a solar park on it. In this article we provide an overview of how this type of leasing works and what financial and environmental benefits it offers.
1. Stable rental income
Developing your property through the construction of commercial properties or rental apartments can be potentially lucrative, but it also presents certain challenges. First of all, large construction projects are incredibly complex, often going over budget and taking longer than originally planned. Your rental income is not always guaranteed either, as it is dependent on all properties remaining occupied.
When you lease your land for a solar farm, you don’t have to worry about fluctuating income. You also avoid the hassle of having to deal with tenants yourself or hiring a property management agency, which results in lost income. The other big advantage of leasing land is that the company you work with will handle all site preparation and installation and provide all equipment. This means that there are no costs for you and you can start making money right from the start.
Leasing solar land also generally brings in more money overall than using the land for agriculture. Although farming can be lucrative, it is entirely dependent on the weather. Drought or heavy rains that flood crops can lead to years where you lose money. With a solar park, your income is always predictable.
2. Long-term security
Another problem with renting residential or commercial properties is that there can be high turnover. If your property sits empty for a long period of time, you may have difficulty meeting your financial obligations. The worst case scenario is that you default on the loan you took out to build the property and the bank forecloses on the property, or you are forced to sell the property for less than your original investment.
With a solar land lease you have long-term security and continue to earn the same income over the entire term of the lease. The term of the leasing contract typically extends to the expected operating life of the solar system, which is usually between 20 and 30 years. At the end of the lease, you then have the choice of signing another one or having the leasing company remove the equipment and use the property for another purpose.
If you choose the latter, your property will be restored to a good condition and is basically buildable if you wish. Most leasing contracts are also flexible and include an option that allows you to buy the solar farm and take over its operation. If you choose this route, the solar company will typically train your team and provide all technical documentation to ensure you can operate the farm effectively after handover.
3. Low floor maintenance
Maintaining a large residential solar farm or commercial complex requires a tremendous amount of work. Not only do you have to carry out all necessary maintenance and repairs on the building, but you also have to maintain the landscaping and the rest of the grounds. If you lease your property for a solar farm, the leasing company will be responsible for 100% of the maintenance of the property as well as the maintenance and repair of the systems. This means you don’t have to do anything yourself and you can just sit back and continue earning passive income.
4. Contribution to clean energy
Another concern with building on your property is the impact on the environment. Regardless of whether you are building a commercial complex, a single-family home or an apartment building, your property leaves an enormous carbon footprint and directly contributes to even more greenhouse gases being released into the atmosphere. With a solar farm, your property will have the opposite effect, ensuring you are helping to protect the environment rather than causing further damage.
5. Positive impact on the community
Building a solar farm on your land can have a positive impact on the local community because all the clean energy the farm produces is fed directly into the grid. Large solar systems relieve the strain on the grid and reduce the risk of failures. The additional electricity from area solar farms can also help reduce energy costs, allowing families and businesses in the community to save money.
At Solar Liberty, we are ready to guide you through the process of leasing your property in New York, Maryland, Pennsylvania or Maryland for a solar farm. We have almost 20 years of experience and support the entire process from start to finish. This includes working with you to determine the best area for operations, assessing the suitability of the property, and handling all permits, installations, and ongoing maintenance/repairs. If you would like to invest in building a solar farm rather than leasing your land, we can also design, engineer and build a turnkey solar system that is suitable for you. To schedule a consultation and learn more about our leasing or solar farm construction process, contact Solar Liberty today.
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