From Vacant to Vibrant: Generating Passive Income from Land with Solar Energy
Dec 19, 2023
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Learn how to generate passive income from vacant land by leasing to solar developers. Solar energy expert Dakota Malone shares insights on solar leasing, different types of solar projects, lease payments and landowner options, creative uses of solar panels, and analyzing the risks and opportunities of solar leasing for various landowners.
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Quick takeaways
Land investors can generate passive income by leasing their vacant land to solar developers.
Solar panels can be creatively used for dual purposes, such as conserving water and generating solar energy simultaneously.
Factors like zoning, infrastructure proximity, and available hosting capacities are crucial to attract solar development on vacant land.
Deep dives
Solar energy as a monetization strategy for land
Solar energy is a brilliant way to monetize a parcel of land, making it a valuable strategy for land investors. The solar energy expert, Dakota Malone, explains how this industry works and when it makes sense to implement solar energy on vacant land. By working with solar developers, landowners can generate value from their real estate and benefit from the deployment of renewable assets.
Qualifying land for solar assets
To qualify land for solar assets, it should typically be 10 to 30 acres for community solar projects or 50 to 500 acres for utility-scale projects. The land should have easy access, proximity to substations and power lines, and receive adequate sunlight. Working with consultants like Dakota, landowners can identify the best locations for solar projects and maximize lease rates.
Creative use of solar panels
Solar panels can be creatively used in various ways to achieve multiple objectives. Examples include placing solar panels over canals to conserve water and generate solar energy simultaneously, installing solar panels as covered parking lots to protect vehicles and produce clean energy, and employing solar panels for medevac operations in the military. These dual-use solutions demonstrate the versatility and potential of solar energy.
Comparison with wind energy
Solar energy offers advantages over wind energy, such as requiring less land space and a wider range of potential locations. While wind energy can be efficient with a smaller footprint, solar energy's scalability and potential for dual-use applications make it an appealing option. The choice between solar and wind energy often depends on factors like available land, local policies, and specific project objectives.
Costs and fees associated with leasing land for a solar farm
Leasing land for a solar farm typically does not incur costs for the landowner. While the land may need some preparation, such as a survey, the solar developer usually covers these expenses. However, if the land requires significant changes, like tree removal, the lease rate may be slightly lower to account for those costs.
Factors to consider in making land attractive for solar development
To make land more attractive for solar development, factors such as zoning, proximity to substations, and available hosting capacities are crucial. The aesthetic appearance of the land with solar panels is not as important as meeting these infrastructure requirements. Additionally, landowners can partner with solar consultants or companies to monetize their land, allowing them to benefit from solar leasing without the upfront costs or complexities.
In some cases, it's as simple as re-selling the land at a markup, but in some cases, vacant land can be held as a buy-and-hold investment that generates a stream of passive income for years to come.
Today, we will talk about one way of generating passive income from vacant land by leasing to a solar developer.
Dakota Malone reached out to me recently to pitch this idea for a podcast episode, and I thought it was a great idea.
Today, I will talk with Dakota about how this industry works, how to determine when this strategy makes sense for a vacant parcel of land, and, as usual, we will pick up a lot of other informative insights along the way.
