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May 8, 2025
The solar energy market across the United States is surging in 2025. For landowners, especially those in rural or agricultural areas, the demand for large tracts of land from solar developers presents a major financial opportunity. But the decision isn’t just about taking the first offer—it comes down to choosing between two very different paths: leasing or selling.
This guide will walk you through the key facts, recent data, and how landowners in various states are navigating solar deals in 2025.
The United States added over 37 GW of solar capacity in 2024, with another 26 GW projected for 2025 and 22 GW expected in 2026 (Source: EIA). With that kind of growth, developers are scrambling to secure land.
The focus is on areas with strong sunlight, access to substations, and wide-open parcels of 10 to 500+ acres. Large landowners now receive multiple inquiries from solar companies each month.
States leading the charge include:
Land prices are rising in response. For example:
Leasing land allows owners to keep the land title while earning passive income. Here’s what a typical deal looks like in 2025:
Leasing works well for owners who want recurring income, aren’t in a rush to sell, and plan to pass land to future generations.
Selling means giving up full ownership in exchange for a one-time lump sum. In 2025, solar developers are paying premiums for the right parcels. But selling has clear pros and cons:
Selling appeals to those seeking immediate liquidity, especially if they plan to reinvest, retire, or offload land with no future use.
Each state has unique incentives, lease rates, and land values. Here’s a breakdown of some active states in 2025:
State | Avg Lease Rate (per acre/year) | Avg Farmland Price | Notable Activity |
Texas | $800–$1,500 (Source: Renewa) | $4,420 (Source: USDA) | 11.6 GW planned |
California | $1,000–$2,000 (Source: Renewa) | $11,200+ | Utility incentives |
Illinois | $700–$1,200 | $8,900 | 800 MW project |
Florida | $500–$1,200 | $7,190 | Rooftop + Utility |
Iowa | $600–$1,300 | $9,420 | Moderate growth |
Kansas | $500–$1,000 | $2,970 | Rural leasing |
Nebraska | $500–$900 | $4,110 | New incentives |
Wisconsin | $600–$1,000 | $6,120 | 0% price gain in 2024 |
Solar agreements are not casual handshake deals. Before signing, landowners should ensure:
Always use a land-use attorney experienced in renewable energy to review contracts.
The right choice depends on your goals—not just the price tag
In 2025, solar energy presents a strong opportunity for landowners to monetize unused land. With the solar market expanding across dozens of states, developers are paying top rates for the right parcels.
There’s no one-size-fits-all answer—leasing and selling serve different needs. Take your time, weigh the numbers, and get help from professionals before signing any deal.
Q: How much can I lease my land for a solar farm in 2025?
Between $500 and $2,000 per acre per year, depending on your state and how close your land is to substations and grid infrastructure (Source: Renewa).
Q: What states are best for solar leasing right now?
Texas, California, Florida, Illinois, and New York are top markets. Iowa, Kansas, Nebraska, and Wisconsin are emerging.
Q: Do I pay property tax on leased land?
It depends on the contract. Some developers agree to cover the tax. If not, the landowner remains responsible.
Q: How long are solar land leases?
Most range from 20 to 40 years, often with 5–10 year extension options.
Q: Is lease income taxable?
Yes, you must report it as income on your tax return.
Q: Do solar farms lower the value of nearby farmland?
Research shows they don’t reduce surrounding land values in most cases.
Q: What happens after a lease ends?
Decommissioning terms should ensure the developer removes equipment and restores the land.
Q: Can I use the land for anything else during the lease?
Typically no, but some leases allow for grazing or limited farming around panels.
Q: Is selling land for solar taxable?
Yes, capital gains tax applies based on how long you’ve held the land and your tax bracket.
Q: Can solar developers back out?
Yes, many leases have exit clauses for developers if they don’t get permits or financing. Always read the fine print.
This content is intended for general informational purposes only and should not be interpreted as legal, financial, tax, or real estate advice. The information reflects broad market observations and draws from a variety of publicly available sources considered accurate and current at the time of writing. However, laws, regulations, and local market conditions may change. Readers are encouraged to seek guidance from qualified professionals regarding their specific situation before making any real estate, financial, or tax-related decisions.
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