The land under the photovoltaic panels is free for rent

Should landlords lease land for solar farms?

With the reduced cost of solar panels and high performance of rental incomes, solar farms offer some great benefits for landlords. This article looks at the various benefits for landlords considering leasing land for solar farms and gives an overview of the current solar energy market.

What are solar panel leases & how do they work?

For obvious reasons, solar panel leases will grant the tenant a right of free, uninterrupted and unobstructed passage of light to the solar panels. As a result, the landowner cannot do anything on the land or its adjoining land that would restrict the light flow to the solar panels.

Should a tenant be required to leave solar panels on the land?

If the landowner validly forfeits the lease due to a breach of covenant or non-payment of rent, consider whether the tenant should be required to leave the solar panels on the land until all monies due to the landlord have been paid. Solar panels are a valuable asset and could be used to offset any debt owed to the landlord.

Can I rent land for a solar farm?

Renting land for a solar farm is a commercial lease and is not an agricultural use, so Agricultural Property Relief from inheritance tax may be lost. Transferring ownership of the land to another individual or trading entity before any development starts may be worth considering, to minimise the tax implications, but seek professional advice.

How much does a solar farm land lease cost?

With solar farm land lease rents ranging from £850-£1100 (depending on variables such as development size and location) per acre per annum, rental rates compare favourably with other income streams such as agricultural and livestock farming, event hosting and storage services.

Can solar farms be built on flat land?

As with most wind power projects, developers only place solar farms on land that meets certain conditions. The land should be sturdy for solar projects and not fall foul to sinking from soft soil. But it’s also essential to consider the landscape for a site, as solar projects are particularly reliant on flat land without steep slopes.