Land owners all over the country are experiencing an amazing new way to lease their property with excellent cash flows: Leasing land for solar power generation. Property owners in CA, AZ, TX, NM, NV, CO and UT were recently surprised to find what their useless or low generating farm land will fetch. In areas like Arizona, in the middle of the desert, property owners are lucky to find a rancher that will lease from them at extremely low rates, usually $30/acre on average. Leasing the same property for a solar electric farm will yield closer to $300/acre and have an incredible 20 year plus duration. That’s 10 times what they’re getting now for the very same piece of ground!
Is there a catch? No, but there are some important details that a solar developer will be looking for. Typically a flat piece of ground is best with excellent sun hours. Also, the system needs to be connected to the power grid, so the property will need to be located with power lines either on the property or very near.
If your property fits such a description, leave a comment below and someone from Skybridge Solar will get in touch with you. Or fill out our handy contact form located under the Development tab titled Land Sellers and Lessors.
SOLAR POWER DEVELOPER, SKYBRIDGE SOLAR NAMES DENNIS BELL AS MODEL ADVISOR
EDEN PRAIRIE, MN U.S.A. – Dennis Bell has joined solar power developer, Skybridge Solar as a Solar Energy Model Adviser. Dennis has over twenty-five years of experience in energy, modeling, and information technology. He modeled renewable energy generation, as well as power system costs and reliability, for the Electric Power Research Institute (EPRI). Dennis also designed large campus and corporate computer networks, directed and administered IT at a Fortune 1000 semi-conductor manufacturer and co-founded a building-integrated PV R&D company.
Dennis Bell gave the following comment:
“I’m very pleased to join the team at Skybridge Solar as their model advisor. As the solar PV industry matures, being able to accurately assess the site-specific performance of utility-scale PV projects is crucial. Project financiers need to know that they can trust the numbers. Project customers need to know the expected power generation and that expectations will be met in the future. I believe that Skybridge Solar, as a utility-scale PV developer and operator, has the team and the expertise to meet these expectations.”
Skybridge Solar is a developer of utility scale solar facilities using proven solar technologies. The Skybridge Solar team is comprised of solar experts who are highly experienced developers, financiers, engineers, integrators and sales and marketing professionals. Our team has over 30 years of experience in development, finance, design and installing real estate and solar assets. We believe we can make the world a cleaner, safer place for generations to come by “Powering a Clean Earth.”
Recently the CPUC in the State of California has passed a Renewable Auction Mechanism or RAM. The RAM requires investor owned utilities in California to purchase Renewable Energy through an Auction instead of a true Feed in Tariff or FIT that would set an upfront price. The RAM will be used for Renewable System sizes from 1.5MW’s to 20MW’s in size.
Opinions vary on the subject. Some favor a true FIT and others the competitive bidding of the RAM. One certainly can make the case that the RAM is an effective mechanism to set market prices, where FIT’s are often times set too high and fail, as was the case with Spain. FIT’s don’t rely on additional incentives, the FIT is the incentive. The RAM will set the market price through bidding and the developer will be able to take advantage of the current incentives like the 1603 cash grant.
Solar Alliance had this to say, “At the moment, solar electricity cannot compete effectively with fossil fuel generation, which is heavily subsidized with tax credits, depletion and depreciation allowances, liability shields and other measures. Solar has the potential to compete against these sources today with the support of temporary incentives that will accelerate demand. These have been proven in several markets to in turn reduce costs over time.”
Imagine what the price of solar might be if it received the same subsidies as fossil fuels? Imagine further what the price comparison might look like if we completely removed the fossil fuel subsidy and gave it to renewables?
Skybridge Solar is currently and actively looking for Utility Scale Solar Farm Power Plants to purchase in Ontario, Italy, Spain and Greece.
What is a developer looking for in a project?
The following is a list of important factors that make a project attractive to a utility scale solar farm power plant developer.
What’s the IRR (Internal Rate of Return) of the project? If it isn’t high enough, a good developer won’t be able to justify the risk reward ratio, and simply may not be able to get the project financed.
Does the project have a PPA? Probably number one in the list and for good reason. A PPA (Power Purchase Agreement) is the long term contract between the developer and the utility or off taker purchasing the power.
Does the project have an Interconnection Agreement? An Interconnection agreement allows the developer to connect the system to the grid to deliver the power generated.
Does the project have a construction permit? The permitting process is a long and arduous process and envoles many parties…environmental and governmental.
How strong are the contracts? The land lease or purchase contracts along with all other contracts need to be iron clad. If not, a developer wont be able to finance a deal, no matter how healthy the IRR and other factors.