Lessons from Farmers Who Switched to Solar Leasing
For generations, farming has been a way of life for many landowners. But in recent years, farmers have faced increasing challenges—rising operational costs, unpredictable weather, fluctuating crop prices, and labor shortages. For many, the financial strain has made it harder to keep their farms profitable.
Farmers have searched for new land utilization methods to maintain profitability. Solar leasing stands out as one of the most rapidly expanding options for landowners. By leasing part of their properties for solar energy generation, landowners can create secure, long-term profits through reduced operational demands.
Farmers converted to solar leasing agree they should have evaluated this option earlier. Their experiences offer useful guidance for those who are trying to decide this option. This guide examines the financial advantages and land management strategies that farmers have discovered through solar leasing while also explaining how to make the transition successfully.
Lesson 1: Solar Leasing Provides Reliable Income That Farming Can’t Guarantee
The predictable and steady cash flow from solar leasing attracts farmers because it guarantees income. Solar lease payments remain constant and dependable, unlike farming profits, which are subject to various unpredictable factors like weather shifts and market changes.
The stable income from solar leasing enables farmers to manage property taxes and debt payments while making new investments in their operations without concern for unfavorable crop seasons. The amount farmers receive from solar lease agreements varies from $600 to $2,000 per acre annually based on geographical location, distance to power infrastructure facilities, and the overall scale of the solar project. A 25- to 40-year solar lease can generate millions in guaranteed revenue over its duration.
A Midwest farmer who leased some of their land for solar energy explained that the income from lease payments enabled them to eliminate their dependence on loans for purchasing equipment and seeds. One farmer from the Southeast used solar energy revenue to grow their livestock business without increasing their financial risk exposure.
Solar leasing provides farmers with financial stability that supports their farming operations while protecting them from market price fluctuations.
Lesson 2: Keep Farming While Earning More with Solar Leasing
People often mistakenly believe that farmers who lease their land for solar projects must abandon farming completely. Farmers who have adopted solar leasing confirm that this transition doesn't force them to abandon farming. Solar panel installations prevent large-scale row crop farming, but many lease agreements permit agricultural activity on property areas that remain unleased.
Farmers often maintain traditional agricultural practices by cultivating crops on areas of their property that remain outside the scope of solar energy projects. Agrivoltaics enables dual land use, where farmers can graze livestock under solar panels and grow shade-tolerant crops between their rows.
A Pennsylvania dairy farmer who leased their land for solar explained their ability to graze sheep both underneath and adjacent to the solar panels despite converting some cropland for solar use. The arrangement enabled them to keep operating their livestock business and earn passive income through the solar lease.
Farmers who want to maintain production on their land must carefully negotiate land use terms when leasing their property. Numerous developers show willingness to partner with landowners who want to continue agricultural operations while generating solar power.
Lesson 3: Solar Leases Lower Maintenance and Labor Expenses
Continuous effort is essential in farming, which involves planting and harvesting, as well as maintaining equipment and managing soil. Aging farmers or those facing labor shortages find it challenging to sustain extensive farmland operations.
Many farmers who transitioned to solar leasing report that their biggest advantage lies in the substantial decrease in both labor requirements and maintenance expenses. The major difference between solar leasing and farming lies in the fact that leasing requires no daily management efforts from the landowner, unlike farming, which demands continuous investments in seeds, fertilizer, equipment, and irrigation. Annual lease payments are received automatically without requiring any active involvement after the lease agreement starts.
This factor became the deciding element for one Texas farmer. The workload became too demanding after managing more than 1,000 acres of crops for many years. By leasing 300 acres to a solar developer, they avoided costly equipment upgrades and reduced labor expenses while maintaining income from their agricultural property.
Landowners approaching retirement or facing labor challenges can use solar leasing as a strategy to maintain income from their property while avoiding the demanding physical requirements of traditional farming.
Lesson 4: A Solar Lease Safeguards Your Land for Future Generations
Landowners who engage in solar leasing state that its primary advantage is to enable them to transfer their land to descendants without facing financial burdens. Higher land prices, along with growing property taxes and reduced farm earnings, make farming succession challenging for the younger generation. Farmers have been forced to sell parts of their land in order to maintain financial stability for their farming operations.
A solar lease enables landowners to maintain family ownership of their property and provides their heirs with reliable long-term revenue. Solar leases stand in contrast to land sales for industrial or residential use because they allow landowners to maintain agricultural potential after the lease ends. After the lease expires, owners will be able to bring the land back for agricultural purposes or other uses.
A farmer from North Carolina who inherited farming responsibilities from previous generations signed a solar lease, which secured their children's financial future with a stable farm inheritance. They chose to rent their land to solar developers rather than sell it entirely while farming the remaining acreage. The secure revenue from the lease payments helped pay property taxes and maintenance expenses, which enabled their family to sustain their farming operations for future generations.
Solar leasing stands as a beneficial solution for landowners who wish to maintain their agricultural property while achieving financial security.
Lesson 5: Understanding the Lease Agreement Is Crucial
Farmers who have shifted to solar leasing highlight the necessity of understanding lease terms before signing. Solar lease agreements represent extended-term contracts that require thorough examination of their terms to align with financial objectives and land usage plans.
Some key factors farmers highlight include:
Since most lease agreements extend from 25 to 40 years, farmers must evaluate their long-term land use strategies before signing.
The payment structure details how payments are organized and includes information about annual escalation clauses that adjust payments to reflect inflation rates.
Property planners need to determine which sections will be used for solar power generation and whether agricultural activities can take place on the remaining land.
The developer must remove all equipment and restore the land when the lease ends.
Agricultural professionals reported greater confidence in their lease agreements after working with knowledgeable consultants or legal advisors. A farmer from Illinois who rented 200 acres for solar energy generation reported that establishing favorable lease terms before signing prevented them from facing future challenges.
Final Thoughts: Is Solar Leasing Right for Your Farm?
Solar leasing has revolutionized financial stability for numerous farmers who keep ownership of their land. These key learnings—financial security assurance, land use balance, maintenance cost reduction, family land protection, and detailed lease agreement reviews—can guide others in choosing whether solar leasing suits their property needs.
Consulting with a knowledgeable expert is essential for farmers interested in solar leasing who need guidance on land assessment and process steps.
Schedule your free consultation now to discover your land's earnings potential through solar leasing.
