Two different payments, not one
A solar farm on cropland creates 2 separate payments that news coverage often blurs together. One is private, the rent a solar company pays the landowner who signed the lease. The other is public, the property tax a county collects once that land is taxed as a commercial solar site instead of a farm. In a May 2024 survey of farmers who had discussed leasing land for a solar project, the Purdue University Center for Commercial Agriculture found 55% had been offered a long term lease rate of 1,000 dollars an acre or more, and 27% had been offered more than 1,250 dollars an acre. Nearly 60% of those offers carried an annual increase on top of that starting rate, typically 2% to 3% a year.
How the lease itself works
The Pennsylvania Public Utility Commission describes a typical solar lease in 2 phases. The developer first pays a small per acre fee while it decides whether to build, then a much larger per acre payment once construction begins, for a term that usually runs 20 to 30 years, with the rate stepping up every 5 to 10 years. A solar farm needs 6 to 8 acres of land for every megawatt of capacity it builds, and a typical Pennsylvania utility scale project runs 20 to 80 megawatts, so the land under lease on a single project can run into the hundreds of acres.
Why the tax bill grows once the land converts
A modeled teaching example from North Carolina State University shows why a county collects more once cropland becomes a solar site, even though it describes no real signed lease. In the model, a 30 acre farm enrolled in the state present use value program pays 6 dollars an acre in property tax as farmland. Once the modeled land converts to a solar facility, its property tax rises to 3,000 dollars a year, up from 180 dollars a year before, plus a separate tax on the solar equipment itself. Pittsylvania County, Virginia, saw that same mechanism play out in real numbers. The county approved 3 solar siting agreements in December 2021 under a revenue share model it had adopted, and now projects about 42,000,000 dollars in tax revenue from those 3 projects over the life of the projects, more than 4 times the about 10,000,000 dollars the same 3 projects would have produced under the machinery and tools tax model used before.
Figures are the tax revenue Pittsylvania County, Virginia, projects from the same 3 solar siting agreements approved in December 2021, under 2 different tax models
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| Older tax model | 10 |
| Revenue share model | 42 |
A bigger proposal still being decided
Lonoke County, Arkansas, is weighing a much larger project that is still under public debate, not yet approved. Invenergy has proposed the Downstream Solar Energy Center, a 300 megawatt facility worth 600,000,000 dollars, covering 6,000 acres total with about 3,000 acres actually holding panels. The company projects about 7,500,000 dollars in tax revenue to Lonoke County over 50 years, and about 20,000,000 dollars to Pulaski County schools over the same 50 years, more than twice what the host county itself would collect. The project would bring 300 construction jobs and 3 permanent jobs, with construction planned to start in spring 2026 and run about 2 years, if it is approved.
Figures are projections for the proposed Downstream Solar Energy Center in Lonoke County, Arkansas, still under public debate and not yet approved
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| Lonoke County government | 7.5 |
| Pulaski County schools | 20 |
I think this is a positive project at this point. But I haven't made any final decisions.
Doug Irwin, Lonoke County Judge, the elected chief executive of the county. Source 5.
We believe this is a positive project that will bring long term benefits to the region.
Eve Shanahan, senior analyst on the Renewable Development team at Invenergy, the company proposing the project. Source 5.