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Survey: Companies are willing to pay more to lease farmland for solar energy production

Some farmers surveyed in the latest Ag Economy Barometer say that companies are starting to increase the amount they’re willing to pay to lease farmland for solar energy production.

Jim Mintert is the director of the Purdue University Center for Commercial Agriculture.

“The survey asks respondents who have engaged in discussions with companies about leasing farmland for solar energy production whether or not there was a change in lease rates that were being offered to producers by companies. This month we did see a change. There were more people in this month’s survey who said they were being offered higher rates. The percentage of people who said they were offered a long-term lease rate when the solar field might be in energy production of over $1,000 an acre jumped to 48 percent this month.”

In previous surveys the percentage of respondents who reported a lease rate at this level ranged from 27 percent to 35 percent.

He tells Brownfield there was a change in the percentage of farmers reporting between $500 and $1,000 an acre.

“At the same time, the percentage of producers who said they were offered a lease rate of $500 to $750 an acre fell to 12 percent. In prior surveys it was up around 18 percent. People who said they were offered a rate of $750 to $1000 fell to 16 percent. In prior survey that was up around 23 percent.”

Mintert says, “we’ve been hearing anecdotally from producers that lease rates were going up. This is the first time we’ve been able to pick that up in our survey. We’ll continue to ask questions about (solar lease rates) because it continues to be a hot topic, especially here in the Eastern Corn Belt.” 

The survey has periodically included questions about solar leasing since 2021. Mintert points out that in the two most recent barometer surveys, about 10 percent of farms reported having solar leasing discussions with companies.

The Purdue University/CME Group Ag Economy Barometer is a monthly national survey of 400 U.S. agricultural producers.

Audio: Jim Mintert