A solar option on the best acres versus keeping the whole farm in row crops

The clause worth reading four times is the option period, not the lease. Three years of a developer controlling your best 60 with no rent while they sit in an interconnection queue is real cost. Option payments sometimes land at a few dollars an acre against nothing, which is not the same as being paid to wait. If the option money is thin, push for it to be meaningful or shorten the window.

Parcel, I'd want to know what your operator says before the developer says anything else. Mine farms 900 acres across six landowners and he prices his cash rent bids on being able to run equipment in a block. Pull 60 out of the middle of that and the economics of the remaining 100 change for him, not just his enthusiasm. I've held ground for nineteen years and the single thing that made it easy was one operator who wanted all of it. Losing that costs more than the spreadsheet shows.

Even so, four times cash rent with an escalator is not a number you ignore. If the 60 sits on the road edge and the rest is behind it, the block problem might be smaller than I'm assuming.

Went through this thread a couple of times and I keep coming back to something basic. If the panels come up in thirty five years, is the tile still working underneath? Does anyone actually know how that ground farms afterward, or has nobody got an answer to that yet?

Juniper, that's the honest gap. There isn't a long enough record of decommissioned utility scale sites on tiled midwest cropland to say much with confidence, which is why the bond and the restoration spec in the agreement carry so much weight.

Parcel, the way I'd frame it from a capital standpoint: you're comparing a 2 to 4 percent income yield with land appreciation on top against a contractual escalating stream on 60 acres plus whatever your remaining 100 does. The second one has counterparty risk and the first one has commodity risk. Neither is obviously better. What tips it for me is whether you need the income now or you're compounding land value for someone else to inherit. You mentioned a kid who wants to farm. That's most of the answer and it isn't a financial one.

A common pattern is solar offers land on the cheaper ground first because developers want price, not yield history. Coming for the best 60 first suggests it's about substation distance and nothing about the soil. Worth asking the developer directly why that parcel.

The question that matters most here is whether the lease gets recorded and whether it survives a sale of the farm. If it runs with the land, the decision is not just for the current owner, it is for every future owner of that parcel. That is a bigger question than the rent number and worth resolving before weighing the income comparison.

A memorandum of the lease normally gets recorded and yes it binds successors, though recording practice differs by state and an attorney should confirm how it's handled where the farm sits. Take a cell antenna lease on a roof of a small multifamily property as a comparison. Same shape. Great income, and then a buyer knocks six figures off the price because he wanted to add a floor and couldn't. The lesson isn't that the lease was bad. It's that the income got priced and the optionality given up never did. If the whole farm would sell in fifteen years, the encumbrance is a discount that gets eaten later. If it never sells, it's free money.