All you need to know about leasing a Solar Farm

mangeshbdc

May 4

Solar farms on lease are a new concept that is gaining widespread popularity in the agricultural industry. While it may seem like a wild idea, solar farms on lease are not a new concept. Companies have been leasing land for years to use for solar farms. With the government allowing farmland on lease for solar power plants, there has been an exponential increase in investments in this sector.

But first, what's a solar farm?

Photovoltaic systems, also known as solar panels, are positioned in a large area for directly producing electricity using the energy of the sun. It is similar to power plants/stations. While it converts the energy into electricity, it sends the same to the power network for distribution. It is then consumed widely and used in a variety of work. Preferably, PV systems/solar panels can be mounted on the rooftop, but the preference is to use the ground for better results and safety.

Types of solar farms

Utility-scale

Be it a rooftop solar panel or mounted on the ground, solar energy plans are always on a framework. This in turn supplies electricity to the utility companies. Usually, utility-scale solar panels are placed on huge lands where these panels expand beyond limits. Electricity generated from the Sun is distributed to power lines and travels through the electricity grid to your home.

Communal solar

Sustainable technologies are used to generate electricity in the same place or within a small area. Generation of energy that is closer helps in better distribution. These are carried out on a small scale and that gives room to absorb more clean energy.

How does the leasing work?

A farmer leases his land to the company that installs the panels and sells the electricity generated to the utility company. The farmer gets paid for leasing out his land, and also gets paid for feeding into the grid with his surplus electricity production. The solar farm is owned by someone else and leased out(for 25-30 years) by the landlord to farmers for use as a source of income.

Payment is agreed upon by both the parties and as the generation of solar energy is reliable and foreseeable, the rent is decided on a per-acre basis. A reliable projection is made for the lease out period and as per the agreement the landowners get around ₹1-2 lakh per year per acre from the project owners.

How long is the process?

This process involves 5 steps before the actual plan starts.

Step 1 - The land is assessed and selected

Step 2 - A proper layout is made and checked for any foreseeable impact on the property

Step 3 - Lawful permissions are taken from the environmental authorities

Step 4 - Solar plants are installed on the farms, which takes upto a year

Step 5 - Grid connection is made for better supply and consumption

Any interference in farming?

Usually, there is no interference involved in the farming business. Minimal time is required for the surveyors to complete the groundwork.

Until the solar panels are constructed, you will have people moving in and around your farm to deliver materials for the required project. Other than this, there are only annual visits for maintenance purposes. You will be all fine to operate your farm without any hindrance.

Landowners can ask the project owners to give specifications of their earlier solar plant projects. So try and track their projects for better relationship and reputation maintenance.

In conclusion

This type of leasing out of farms has helped poor farmers a great deal and has given them an opportunity to live well. Leasing out is a perfect model for both the land and project owners.

Landowners get to earn a stable annual income and even have the right to gain future capital. Post the lease period is over and as freewill; landowners have even sold their lands to the project owners. This movement has largely been seen in the states of HP, Uttrakhand, Andra Pradesh, Punjab, and many more.

Welcome to the future of green power systems!

Sterling and Wilson Renewable Energy offers a complete range of Turnkey and Balance of System (BoS) solutions for utility-scale, rooftop, floating, and hybrid and energy storage projects.