1. The land and the offer
Change the numbers or load the example, then click Value the offer.
Result
| Line | Value |
|---|
Lease minus alternative (present value) by escalator and year-1 rent
How the numbers work, and what they leave out
- Lease cash flow: option payments for the option years (plus your farm income if you can keep farming), then year-1 rent grown by the escalator each operating year, less the extra property tax you carry, plus any signing bonus and minus any rollback tax at year 0.
- Alternative: your current per-acre income grown at the rate you enter, over the same years. Both streams are discounted at your rate, payments at year end.
- Break-even rent is the year-1 rent at which the two present values match. Break-even escalator is the escalator that matches them at the offered rent.
- Rent share of project revenue uses acres per MWac, capacity factor and power price that you enter; it is a negotiating reference, not a market rate.
- Not modelled: decommissioning security, indemnity, crop-damage and easement payments, extension options, termination and assignment rights, income tax, and a developer's tax-credit economics.
Common questions
How much do solar companies pay per acre to lease farmland?
It varies widely by state, grid access and developer, and this tool contains no rate survey. Enter the offer you actually have. The tool shows what it is worth over the option period and term, what it would take to match what the land earns now, and how it compares with the project's own revenue.
Is a solar lease offer better than farming or cash-renting the land?
Compare present values, not first-year rent. The tool discounts the option payments, the escalating rent (less the extra property tax you carry) and any signing bonus, and sets them against your current cash rent growing at the rate you enter.
What escalator should a solar lease have?
Enough to keep up with what the land would have earned otherwise. If the escalator is below the growth you expect in cash rents or inflation, the rent buys less each year; the tool shows the last year's rent in today's dollars and the escalator that would break even.
What is an option period in a solar lease?
A development period, often several years, in which the developer pays a smaller amount to hold the land while it studies the site and applies for permits and grid connection. Whether you can keep farming during it is negotiable, so the tool lets you switch that on or off.
Why does the tool ask about property tax and rollback?
Converting farmland can raise your assessment or trigger recapture of agricultural-use tax benefits. Both can sit with the owner unless the lease moves them to the developer, so the tool lets you subtract them. Ask your county assessor and a tax adviser what applies.
What about decommissioning, indemnity and the other clauses?
Not modelled. Decommissioning security, indemnity, crop-damage payments, easements, termination rights and assignment all matter as much as rent. Have an attorney who knows energy leases review the real document.
Is my data uploaded?
No. Everything is calculated in your browser tab and nothing is sent anywhere. There are no accounts.
Is this legal or financial advice?
No. It is arithmetic on numbers you enter. A lease needs an attorney's review.