Solar Ground Lease Calculator

Utility-scale solar projects lease farmland and open land for 25-30 year terms.

Acres leased

Per-acre rent / yr

Lease term years

Escalator %

Option period fee total

Total lease value

$11,388,600

Year 1 revenue

$300,000

Final year revenue

$570,088

How the math works

Year 1 = acres × per-acre rent. Each year escalated. Total = sum of all years.

250 × $1,200 = $300k yr 1. Year 27 at 2.5% = $575k. Total ~$12.1M + option fee.

How to Use

Enter acres leased.
Enter per-acre rent.
Enter lease term years.
Enter annual escalator %.
Enter option/development period fee.
Read total lease value.

Frequently Asked Questions

Solar ground lease structure?

Option period (1-5 years): solar developer holds right to lease with nominal fee ($25-100/acre/year) while securing interconnection, PPA, permits. Construction period (6-18 months): higher rate ($200-500/acre). Operating period (25-30 years): base rent ($500-1,500/acre/yr) + escalator (2-3%). Some states (NY, CA, MA): $2,000-4,500/acre/yr operating rent. Rural Midwest: $800-1,800/acre.

What drives per-acre rent?

Interconnection capacity (kV availability): premium for grid access. Solar irradiance (sun hours): flat Kansas < CA desert < Arizona. PPA price environment. Land type: arable farmland typically $600-1,500/acre; marginal land $400-1,000; desert/scrubland $250-800. Revenue share structures: 5-10% of solar revenue above threshold ($1,200-2,500/acre equivalent). State incentives matter.

Lease term and renewals?

Base term: 25-30 years. Option to extend: 2-3 × 5-year renewals (bumps rent 20-40% per renewal). Total: 35-45 years possible. Panel degradation 0.4-0.8%/year means year 35 produces ~75% of year 1. Many projects repowered (new panels) at year 25-30, restart lease. Decommissioning bond ($50-150k/MW) typically required at end of life.

Landowner considerations?

Pros: steady income 25+ years, no management, property tax often reduced. Cons: land unusable (potentially farmable otherwise), aesthetic change, neighbor complaints, impact on adjacent land sale value. Net-net attractive for marginal farmland with modest agricultural profit ($100-400/acre net farm income). Solar at $1,000-2,000/acre: 5-20× farm income with zero effort.