Utility-Scale Solar: What Landowners Need to Know
Leasing land for a utility-scale solar project can be a great opportunity for landowners, offering stable income while supporting clean energy development. But, before signing a lease, it’s important to understand how the process works and what to keep in mind.
How it Works
Utility-scale solar projects involve large solar farms that generate electricity for the power grid, rather than just for on-site use. Developers lease land from private owners, typically for 20-40 years, and install solar panels that produce clean energy sold to utilities or businesses.
Why Landowners Consider Solar Leasing:
Solar leases often provide consistent payments over decades and little burden on the property owners. Developers handle installation, maintenance, and decommissioning (all required by law), and panels are raised off the ground, allowing for continued agricultural use in some cases. It’s a great way to reduce carbon emissions and make a living while keeping land available for future use rather than leasing or selling to commercial or industrial developments.
Key Considerations
Before committing to a solar lease, landowners should carefully evaluate the agreement:
Lease Terms & Payments – Understand payment structure (fixed, per-acre, or revenue-sharing), escalation clauses, and duration of the lease.
Decommissioning Plan – Ensure the contract includes provisions for panel removal and land restoration at the end of the lease.
Tax & Financial Impacts – Consult a tax professional to understand potential property tax changes and income tax obligations.
Zoning & Permitting – Check local regulations, as some areas may have restrictions on large-scale solar projects.
Questions to Ask Solar Developers
Before signing a contract, ask the developer these key questions and any others you have:
How often will I receive payments, and do they adjust for inflation?
Are there upfront payments or bonuses for signing the lease?
Can I continue using parts of the land for agriculture, grazing, or other purposes?
Will there be any restrictions on my remaining land use during the lease period?
How will the project affect access to my property?
How long will the construction phase take?
What legal and financial protections are in place for landowners?
Other questions specific to farmland? Contact The Ohio Farm Bureau and The Fairfield County Extension Office for guidance on solar leasing.
Leasing land for utility-scale solar can be a smart financial and environmental decision. By understanding the process, evaluating lease terms, and asking the right questions, you can make an informed choice that benefits both your land and the future of clean energy.