As agricultural businesses look to diversify income streams, combining solar generation with crop production is becoming a more practical option. For many, using farmland for energy alongside agriculture is a straightforward next step.
Not every farmer chooses to invest directly in photovoltaics or take on the operational responsibilities of a solar installation, but they can still participate in the energy transition. Leasing land to experienced project developers offers a route to stable income with limited additional effort.
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In practice, project developers rarely target prime agricultural land. “Our strategy is to install solar systems primarily on peripheral strips along transport infrastructure,” says Ingrid Schleper, who leads national photovoltaic project development at PNE and oversees solar deployment across Germany. This approach helps preserve productive farmland while making use of underutilised areas, aligning agricultural use with energy generation.
Developing a land use concept
With extensive experience in developing solar and wind projects, PNE has built up significant expertise in land leasing. However, its approach is not limited to peripheral sites. “While we specialise in conventional ground-mounted solar projects, we are also advancing several agrivoltaic pilot schemes,” says Schleper. “Our work involves close collaboration with farmers to design tailored land use concepts. The specific conditions on site and the needs of each farm are decisive. For the farmer, agrivoltaics always means adapting to a new set of constraints.”
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Lease payments in such cases are typically lower, reflecting that not all of the site can be used for photovoltaics. However, where landowners and developers align on a shared approach, both can benefit.
Caution with high lease offers
Estimating potential lease income is not straightforward and depends on the specifics of each project. Farmers should be cautious of offers that appear unusually high. “It’s crucial to consider who you’ll be working with for the next thirty years,” cautions Kai Reinecke, project developer at PNE. He advises reviewing each offer carefully and assessing the company behind it.
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Otherwise, there is a risk that the solar project may not be realised or that development rights could be sold, leading to renegotiated lease terms and turning an initially attractive deal into a long-term burden. “A sensible first step is to consult agricultural associations for benchmark lease rates,” adds Ingrid Schleper. “If an offer is much higher, there needs to be a clear reason. For instance, a site located very close to a grid connection point can significantly enhance project economics and justify a higher lease.”
Site analyses a must
These projects are naturally more complex, but that shouldn’t discourage participation. While PNE often reaches out to farmers about available land, farmers can also take the initiative and approach project developers themselves. “We follow up with a thorough site assessment and location analysis,” explains Kai Reinecke. “This includes examining legal, planning, energy and economic parameters before entering into discussions with the landowner. If both sides are committed, we secure the site through a lease agreement.”
This process is broadly consistent across projects, but agrivoltaics adds a further layer of complexity. “In these cases, we execute two separate agreements,” explains Kai Reinecke. “One contract covers the land lease, while the other governs agricultural operations. Both are essential. It’s also common for the landowner and the operator to be different parties, so investor, owner and operator must align their interests.” (su)
You can read the full article about land lease in the recent special edition on PV for farmers from pv Europe. Get a free copy of the special here
