Some solar companies are offering jaw-dropping rates for land leases; prices are a source of profit and concern

A solar company's 'pitch' letter to a farmland
owner. (Farm Journal)

The U.S. eastern corn belt is one of the most popular regions for solar energy companies to vie for land contracts. To convince farmers to negotiate leases, solar companies are offering increasingly high rental rates. Their high-dollar offers can add to land competition and local conflicts, reports Tyne Morgan of Farm Journal. "Todd Janzen, an agriculture lawyer based in Indiana, says solar leasing started in the Hoosier state five years ago. Today, such leasing is gaining traction and some controversy."

U.S. farmland is predicted to decrease in value by 2025, but solar energy leases may change that. "In Illinois, farmers are reporting eye-popping offers that are well above $1,500. One farmer near Morton, Ill., shared with U.S. Farm Report some information regarding an offer he received via an unsolicited letter," Morgan writes. "The company offered him a rate of $3,200 to $4,500 per acre. The company offered an additional $1,000 if the farmer signed a letter of intent, plus $3,000 more upon signing the cash lease."

Most sources say that current solar energy leases range from $500 to $4,000 per acre, which even with a 50-acre lease, is a chunk of money; however, the length of those leases may cause some family farmers to balk. Janzen told Morgan, "Farmers are used to one-, two-, maybe five-year cash rent leases, and these are for 20, 30 or even 40 years. So, they're really a generational decision that needs to be made.”

Despite potential monetary gains, solar contracts come with risks. Jazen told Morgan, “I think there's some risk on a personal level. These are becoming somewhat controversial at the county level. And so it can divide neighbors and counties, which is unfortunate, but it's also a reality.”