What Do Solar Developers Look For In a Property?
We wish this weren’t the case, but most properties submitted to SolarLandLease will not qualify for a solar project. This article outlines the four major areas we and our development partners evaluate, in approximate order of importance. Note that some of these factors do change over time, so even if your property does not qualify today, it may in the future.
Where Your Property Is Located
Solar developers are not equally interested in developing projects everywhere in the United States. There are several reasons for this. At the state level, these include:
- RPS — Some states have enacted a Renewable Portfolio Standard (RPS). These mandate that a minimum percentage of a state’s electricity come from renewable sources like solar. This is often a catalyst for utilities in those states to buy solar, which drives developer interest.
- Energy demand — Less populated states have less demand for electricity, and may not need additional energy generation capacity.
- Competing energy generation sources — Some states have other forms of inexpensive energy generation that make solar less attractive relative to those alternatives.
- Sunshine — Some northern states are simply not sunny enough year-round to make solar projects compelling relative to other energy sources.
- Tax incentives — Some states provide lucrative tax incentives for solar projects, while others do not.
At a regional and county level, the major reasons include:
- Proximity to electricity demand (“load”) — Your property might be too far away from population centers or industry. Nevada represents a good example. Solar developers are mainly interested in properties in the southern part of the state, where Las Vegas is (a major “load center”). The northern part is far less populated, which means it has far less demand for electricity.
- Access to transmission infrastructure — Some parts of certain states have more electrical transmission lines. Typically, these will be found closer to load centers.
- ISO/RTO — The U.S. electrical grid is divided into seven sub-grids called Independent System Operators (ISOs) or Regional Transmission Organizations (RTOs). Each of these spans one or more states. One outlier is Texas, where about 95% of the state is one (called ERCOT). Project economics vary by ISO/RTO. As a result, Lubbock, TX–which is not currently a part of ERCOT–is not attractive to solar developers, but Dallas, TX is. Similarly, northern Illinois (part of PJM) is very attractive to developers, but the rest of the state (MISO) is generally not.
- Political opposition and permitting challenges — Some counties and towns oppose the development of solar projects, for a variety of reasons. Some may allow them but make it difficult for developers to secure any required permits, zoning changes, tax abatements, or participate in other administrative processes.
How Many Acres You Have
Solar projects can be any size, or capacity. However, tax incentives, population density, energy buyer demand, electrical grid issues, and a host of other factors determine how big a project solar developers will want to build in certain places.
For example, there is a specific incentive to build community solar farms in New York State up to 5 MWac (megawatts, alternating current) in capacity, which requires 20-30 acres. Developers there generally won’t build any smaller than the full 5 MW, so there will be little interest if you have fewer than 20 acres available.
In southwestern states, the primary interest is in building massive solar farms that can generate hundreds of MWs. These require hundreds or thousands of acres of land. The more acreage you have, the more interest there will be in your property.
Availability of a Point of Interconnection
The lack of a cost-effective interconnection point is the #1 reason solar developers will reject a property submitted to SolarLandLease. Simply put, a solar farm needs to connect to the grid to deliver the electricity it generates, and if this is too expensive to do or simply impossible, your property will not qualify.
General Land Characteristics
Assuming your property is in the right location, has the right acreage, and there is a viable point of interconnection, the final test involves evaluating your property’s general characteristics. Solar developers require that your property be:
- Generally flat
- Not densely wooded
- Not in a floodplain and no wetlands
- Free of endangered species
- Accessible by a road for construction and maintenance
What Changes Over Time?
As mentioned in the introduction, even if your property doesn’t qualify for solar today, it might in the future. For example, Lubbock, TX will soon be integrated into ERCOT, which will make it more attractive to developers. Distribution and transmission lines are frequently built or upgraded, which could suddenly make interconnection viable. Your town or county might change its opposition stance on solar. Or your state might enact an RPS.
This is why it won’t hurt to submit your property to SolarLandLease now. We will review your property and, if it doesn’t qualify today, it will remain in our database indefinitely in case something changes to generate developer interest at some point in the future.