Landowners, livestock producers weigh benefit of solar leases

Solar GrazingGrazingLivestockForages
Written by Judy Mae Bingman

The volitivity of the agriculture industry has farmers looking for new ways to reduce risk and diversify their income. The increase in solar energy developments is offering Illinois landowners and farmers something new to consider.

solar panels on farmland

What can landowners expect from solar leases?

The American Landowner Alliance says solar companies pay Illinois landowners $1,000 or more per acre per year in rent. In comparison, Illinois’ average cash rent for prime farmland is $384 per acre, according to the Illinois Society of Farm Managers and Rural Appraisers.

The details of the lease matter.

  • The contracts are often 20 to 30 years in length and binding once signed.

  • It may take up to five years for approvals and energy buyers to be secured. During this time, the lease is substantially lower.

  • The project may be abandoned by the solar company.

  • Rent is usually paid annually or twice a year.

  • Converting land to solar may have tax implications for the landowner.

  • In case of bankruptcy of the solar company, clean up and restoration may fall to the landowner unless clearly outlined in the lease.

The landowner keeps the land and has no responsibility for maintenance of the site. Mowing or grazing is contracted separately, though landowners can bid to provide vegetation management on the site.

solar panels on farmland

What can farmers expect from solar vegetation management contracts?

Solar companies hire contractors to manage the perennial vegetative cover on the solar farms, either through mechanical mowing or livestock grazing or a combination of both. Illinois graziers can earn from $300 to $500 per acre to manage vegetation, according to Chauncey Watson of Illinois Solar Grazing & Mowing in DeKalb County.

Watson shared his experience managing vegetation for solar companies.  

  • Understand the capital investment needed to perform the duties required in the contract before you bid.

  • Negotiate your compensation based on the facility’s condition — panel height, row width, exterior mowing responsibilities, road access, wire maintenance. Some areas may be difficult to mow, potentially causing equipment breakdowns.

  • In addition to the panel area, farmers are usually responsible for maintaining the buffer areas outside the panels, including any tree or bush areas. Include the cost of fuel, equipment, and labor to maintain these areas.

  • Graziers must have “hooves on the ground,” regardless the time of year the site completed to receive that year’s payment.

  • Some sites lack appropriate perimeter fencing to keep livestock in and keep predators out.

  • Payments can be slow.

For more information

To help farmers understand the challenges and rewards of solar grazing, Brooke Watson founded the Illinois Agrivoltaics Network to facilitate conversations about the benefits of agriculture and solar collaborations. Farmers can contact her through the farm’s website. The American Solar Grazing Association works directly with graziers interested in collaborating with solar energy companies.

You may also enjoy these blogs on solar grazing

Dig Deeper

Judy Mae Bingman
Next

Harvesting the sun twice: Land sharing keeps ag on farmland