How can your business benefit from a Solar Site Lease?
Updated: Sep 10, 2020
There are many different ways to finance a solar project installation. So what is the real difference between a ”solar site lease” and a “solar PPA” and what is the attraction to a solar site lease? Although they are very similar in practice, they do have one major difference, a solar site lease is a pretty straight forward transaction similar to a monthly rent payment. Leasing your unused space to a solar company to build an array on is a very efficient and low maintenance way to provide extra revenue while also promoting renewable energy. With a solar site lease, the solar company will pay you a fixed monthly “rent” payment that is calculated by the system size and electricity production. In exchange, you are being paid for the utility and the solar company to use your property for a term of about 25 years. The solar site lease gives a property owner additional revenue with no cash out of pocket. With a standard solar PPA, while still being a no cost option, you are purchasing the electricity produced by the system at a reduced rate compared to your particular electric bill.
Eligibility for a solar site lease will vary with each specific project, but there are a few requirements that are generally needed with any lease. These include:
Long-term interest in a solar lease: With most lease agreements lasting 20 years, it is important that a property owner be willing to have panels on their roof for an extended period.
The Solar area should remain undisturbed long-term: Since solar energy systems have a typical lifespan of 25+ years, it’s important to ensure changes in landscaping, new construction, and other alterations to the property won’t disturb the solar array once it is completed.
A leased roof should be structurally sound: Ideally, roofs under consideration for hosting solar energy arrays should be less than 10 years old, and fully able to support the array for the lease period. An experienced solar provider can help you determine the structural integrity of your roof before engaging in a solar lease agreement.
Leased land should be dry, with sufficient setbacks from water, shade, etc.: In essence, leased land should be a good site for solar, without excessive shading, bumpy terrain, ecological reservations, or even zoning restrictions.
If you are interested in learning more about an easy way to increase cash flow with a solar site lease please contact Louth Callan Renewables at 860-814-4379 and one of our professionals can go over all your options.