By Chris Noonan, Senior Manager, Land and Local Affairs

Ranchers across the country are experiencing an evolution, a shift in how people consume meat. Profits are becoming slimmer as consolidation in the meatpacking market is forcing ranchers to accept lower prices for their product. According to the New York Times, “The four largest meatpackers have used a wave of mergers to increase their share of the market from 36% to 85%” since the 1980s.” The cost of livestock feed has increased and drought conditions are trimming margins even further. 

The energy industry is undergoing a transition at the same time. Renewable energy generation offers consumers an alternative to the current options available from their electric utility, often reducing energy costs overall. However, solar developers face a challenge in that they do not have enough land to install clean energy infrastructure. 

If they work together, the ranching and solar energy industries can help address their greatest challenges, forming a partnership that benefits ranchers and their communities for generations to come.

Pastureland and Solar, A Perfect Match

Ranchers and meat production companies own approximately 654 million acres of pasture/rangeland in the United States. New solar generation projects will require an additional 17 million acres of land to achieve the nation’s clean energy production goals by 2050. The possibility of partnering with ranchers on a broad scale is attractive to solar developers as rangeland is more easily convertible for solar use than other land uses such as timber.

The wide, open spaces are perfect for solar projects and have high energy generation potential where solar resources are strongest. Less time and money are required by the developers to prepare the land for solar arrays. Additionally, this land is often adjacent to transmission lines and high electricity load centers where energy generation is most valuable. Ranchers could be sitting on a remarkable opportunity and not know it. 

As little as 500 acres can become a home to a utility-scale solar array that offsets emissions and increases energy independence in the area. Perhaps more importantly from a rancher’s perspective, that solar development is now a source of significant reliable revenue. 

A New Income Stream for Ranchers

In an increasingly volatile marketplace, with unreliable income and an unpredictable future, ranchers urgently need to diversify revenue sources. By leasing their land to solar developers, ranchers will gain stable long-term income that helps them hedge against commodity cycles. In addition, the local community will benefit through job creation and boosted tax revenues. 

Though utility-scale solar developers typically seek at least 500 acres to build a successful solar array, not all of those acres need to come from a single landowner. Neighbors interested in reaping the financial benefits can band together to lease a number of contiguous land parcels, in excess of 500 acres where possible.  

Breaking Down the Revenue Potential

To truly make a difference in ranchers’ lives—and to meaningfully alleviate economic pressures—the additional revenue from the solar partnership must be sizable. The good news is that it is. Specific income varies by acreage, but a minimum of $100,000 annual lease revenue is easily attainable. That is the starting point. Depending on the market, the average annual lease income within the first 10 years of the partnership could be $700 per acre for 1,000 acres, making the average annual income between $650,000 and $750,000 per year. As time passes and land values increase, a rancher could potentially earn over $2 million per year from leasing their rangeland. 

Additionally, the solar project will pay for taxes associated with the energy facilities on the leased land. Their goal is to make the process as easy and valuable to landowners as possible. 

Meeting Ranchers’ Needs, Addressing their Concerns 

Solar developers are not just energy experts, they are land experts. Before any project begins, they carefully assess the pastureland and have extensive conversations with the landowner and with community members. Redeux Energy works to understand ranchers’ needs and ensure they are met throughout the partnership. 

A primary concern is the current use—will solar development hinder ranch activities? The answer is no. The solar project and the ranch’s grazing and operations can co-exist without being in competition with one another. Additionally, the solar infrastructure is low to the ground and, as a solid-state power plant, makes nearly no noise.

Naturally, some ranchers also worry about the future life of the land, and what will happen when the lease is up. Solar developers will faithfully reclaim and restore the land to the way it was before they arrived.

Mutual Benefit for Generations

Ranchers and solar developers could be the answer to each other’s largest problems. A mutually beneficial partnership could positively impact the environment and the financial stability of smaller ranches for decades.  

Many ranchers dream of keeping their land in the family for generations and transferring wealth–solar project participation can ensure that becomes reality. 

Interested in learning more? Contact Redeux Energy today and transform how you use your land. 

By Chris Noonan, Senior Manager, Land and Local Affairs

Thousands of people around the country own land, and many are not aware of its untapped potential. On agricultural land alone, experts estimate that by installing renewable energy infrastructure on just 1% of existing underused farmland, solar panels could provide 20% of electricity for the U.S.—and farmland is only a portion of usable landholdings. The solar industry operates on just over 0.5M acres of installed capacity, but needs an additional 17 million acres of land to achieve an all-electric power production scenario by 2050, a scenario that would support sustainability and energy independence from coast-to-coast.

As landowners struggle amidst inflation, supply chain challenges and commodity cycles, a mutually beneficial partnership with a solar power producer could provide the reliable revenue stream landowners need to thrive for generations.

Underutilized land nationwide—agricultural, rangeland, transitional and post-industrial—is being given new life through solar development projects. Landowners working in farming, ranching, timber, mining and oil & gas have all discovered that their land can do more for them and their communities.

By leasing their land to solar power producers, landowners reap economic and environmental benefits while continuing operations alongside the solar facility. Here are the top 6 benefits of leasing your land for solar development:

1. New Revenue Streams

The number one incentive for most landowners who lease to solar project developers is income. Through the lease, landowners can significantly increase annual cash flow, allowing them to make more overall per acre than they would through farming, ranching, etc.

Unlike commodity markets or crop outputs, the lease income is reliable and predictable. Throughout the full life of the project–which can be over 40 years– landowners receive steady payments, supporting their family through multiple generations. This long-term stable source of passive income may be very beneficial for planning during challenging times.

2. A Long-Term Partnership  

When you partner with a solar power producer, you are investing in the future of your land. The solar developers care deeply about your land and take great care in maintaining the acreage. The multi-decade lease will generate income when the facility is in use while also fostering land regeneration. After the lease is up, the land is restored to pre-construction conditions, ready to benefit the next generation.

3. Support Energy Stability and Independence

Energy stability and independence are key concerns across the country, especially as fuel prices continue to rise. Leasing your land for solar project development creates a renewable energy source that can support your community’s energy needs. Solar energy generation projects create enormous value with minimal long-term environmental impact. For those with ESG goals, or those who are working with businesses or investors who do, solar development can help meet those goals through sustainable operations.

4. Boost Local Tax Revenues and Create Jobs

Large scale solar project development starts with the local community in mind. The developers understand local areas and landowner expectations and work closely with local stakeholders to bring the facility to life. Every project has tremendous potential to benefit the greater community through economic and workforce development. The construction and operations team for the project is sourced locally, bringing jobs directly to the region, some of which can be held for decades.

Additionally, solar development boosts local tax revenue, which supports community needs. Solar projects also improve the likelihood that the area will attract other technology and industrial development, allowing the region to continually prosper.

5. Unlock Hidden Potential in Your Land

You could be sitting on land that is very valuable for solar development and not even know it. Large, utility-scale solar projects can be built on as little as 500 acres of relatively flat land. Ideally, that land would be close to existing, high-voltage electrical transmission infrastructure and is  be impacted by flood plains or wetlands.

These projects can be designed to coexist alongside landowner activities, so if you’re leasing a portion of your land to the solar facility, you can continue using the land surrounding the solar arrays for grazing, crop growth, energy extraction, logging, etc. Giving unused–or underused–land a new purpose could notably increase your property value.

6. Hedge Against Commodity Cycles, Farm Input Inflation, and Property Tax Increases

External, sometimes international, forces can lead to unpredictable commodity cycles and farm input inflation, leaving farmers and ranchers with income instability. This can severely impact the livelihood of those in the agricultural industry, with few opportunities for alternative earnings. By leasing your land to a solar power producer, you can generate continuous revenue that acts as a reliable cushion protecting you from sharp market swings and unpredictable annual revenue sources.

As an added benefit, the solar project owner will cover any related increase in property taxes on the land they lease, further improving the financial situation of landowners.

Leasing your land and entering a long-term partnership with an experienced utility-scale solar project developer could transform your land and your community. Are you interested in learning more? Get in touch today.