Articles > Solar Farming - The Reasons Solar Farming is a fantastic investment for vacant land
If you have vacant land or know someone with vacant land please read on. Otherwise this article is just plain good information.
Solar farming is the process of turning unused or underused land into an electricity production farm. Solar farming allows individuals with vacant or otherwise unusable land to make a very good return on investment. Imagine making 12% or more guaranteed return for 30 years with no out of pocket money and cash flow positive from day one. Please note that not every landowner will qualify for this type of opportunity. However risk adverse lenders see the utility contract as excellent risk avoidance.
Utilities typically sign a 10 to 20 year power purchase contract with solar farm operators. The going rate for PG&E solar farm operators is between $0.15 and $0.18 per kWh. At these rates a 5 acre parcel can generate about $300,000 profit per year. As you multiple solar farm acreage you can easily see the potential for excellent income for otherwise vacant land.
Many farmers who have land that is no longer performing due to economics or soil conditions can now look to solar farming as an alternative crop. Commercial Solar Design has special programs for agricultural businesses and farmers. The prerequisite is that at least 5% of gross annual income is derived from growing something to sell. With that prerequisite met the business or farmer qualifies for special agricultural program incentives rolled into a lease package.
The agricultural program lease package is a 10 year lease term. The business owner has zero out of pocket expense and will be cash flow positive the first year. At the end of 10 years the owner can purchase the lease for 20% of the original cost or refinance.
For others with other sources of funding such as personal assets, traditional bank financing or personal assets the payback on a solar farm can be as soon as 7 -8 years. A 24 acre solar farm with dual axis tracking and 3 MW of power can expect to see a 25 year profit in the neighborhood of $19,000,000 after payoff. The 3 MW will cost around $16 million and the total amount of electricity generated in 25 years will be around $30 million.
As more emphasis is put on renewable forms of energy and the country begins moving away from foreign energy sources solar farming will explode. Now is the time to get involved. For projects breaking ground in 2010 there is a 30% tax grant in lieu of credit where the treasury sends you a check for 30% of the total installed cost. If you want to discuss solar farming for your land contact Commercial Solar Design for specific details and a plan to get your project started. They have the engineering, utility contacts, and financial partners to make it happen in short order.