Different Resource Leasing Options That Landowners Have
- Craig Kaiser
- Mar 1
- 9 min read
Landowners have a variety of options when it comes to leasing out the resources on their property. Leasing land for renewable energy production, such as solar, wind, carbon, water, minerals, mining, battery storage, or EV charging can provide property owners with an opportunity to make money from their land without having to sell any acreage. In this guide, we will describe some of the options available.
Interested in leasing your land for clean energy production? Get a free property report on LandApp's map to learn just how much your property is worth for various leasing opportunities today. LandApp's free property reports provide you with value indexes that show you your property's highest and best use at a glance:
Different Resource Leasing Options for Landowners
Leasing land for renewable energy production is a popular way to generate long-term, consistent revenue from your land. Different leasing options for landowners include solar leasing, wind leasing, carbon credits, oil and gas, farming, water rights, battery storage, and EV charging.
1) Solar Leasing
Landowners can lease their land to solar energy companies for the installation of solar panels. Typical solar leases are paid on a per-acre per-year basis, but payment amounts and payment terms fluctuate across the country. This can provide landowners with a steady income stream and help them contribute to the growth of renewable energy.
Acreage Required for Solar Farms
Commercial or utility-scale solar projects usually require 40+ acres of buildable land. Meaning, at a minimum, they will be able to construct at least 40 acres of solar panels. Many commercial solar projects can be very large and require several thousand acres of land to be built.
Community solar projects can be as small as 5 acres. These projects do not produce nearly as much energy as a commercial facility. Community solar facilities usually provide power to nearby communities or businesses. These do not require being close to large transmission lines or substations to function.
Typical Span of Solar Lease Contract
Solar energy leases have two main phases: option and development/production phase.
Typical Solar Lease Timeline and Payments
The option phase typically lasts 2-5 years depending on the size and scope of a project. The faster a developer would like to get their project online - the shorter the term. The landowner will get paid a small portion of the agreed-upon “lease” during this period. The developer will not be obstructing the property during this time. During this phase, the landowner can continue whatever agricultural or recreational practices they have traditionally been doing on the property. The developer uses this time to submit applications for the viability and approval of the project. This includes permits, interconnection queues, purchase power agreements, environmental studies, regulatory and administrative tasks, etc.
The development/operation phase typically lasts anywhere from 25-50 years and can include several “options” to be extended. Meaning that if the developer chooses to extend the life of the project, they can choose to do so, but are not required to.
The operation phase is where the landowner gets paid the agreed-upon “lease” rate. This can be based on a dollar-per-acre per year rate, a percentage of the energy production, or a combination of the two. Production or royalty payments are more common in wind leases and rarely if ever seen in solar leases.
There are quite a few ways that landowners can get paid to lease their land for a solar farm, and solar lease contracts vary across the country. Solar lease payment terms are negotiable, but landowners are usually paid between $700-2,000 per acre, per year.
2) Wind Leasing
Similarly, farmers and landowners can lease their land to wind energy companies for the installation of wind turbines. This lease agreement may involve a flat rate or a percentage of the energy produced by the turbines. Wind leasing can be a good option for landowners who have large, open spaces, and are interested in sustainable energy.
Acreage Required for Wind Farms
Commercial wind turbines can be erected on parcels as small as 10 acres. However, wind developers tend to target large tracts of land since entire wind farms can, and often do exceed hundreds of thousands of acres.
Typical Wind Lease Contract Length
Most wind lease agreements start with a 2-10 year option period, with a 30-50 year development/operation phase. Some wind lease extension options may include “re-powering” options. This is where the developer can maintain the right to upgrade an existing turbine to allow for more efficient or larger blades/hubs to be installed. Additionally, most wind lease contracts contain 'option to extend' provisions that give the developer the option to extend the lease by 5 or 10-year increments.
Wind Lease Payment Amounts
There are quite a few ways that landowners can be paid when they lease their land for a wind farm, and wind lease contracts vary across the country. Wind turbine lease payment terms are negotiable. Landowners can be paid per acre, per turbine, and/ or with royalties.
3) Carbon Credit Leasing
Carbon leasing involves selling the carbon credits generated from your land based on the amount of carbon it is removing from the atmosphere. Companies or organizations can purchase these credits to offset their carbon emissions. This can be a good option for landowners who want to contribute to the fight against climate change, and for those who are not interested in making major changes to their land.
Acreage Required to Sell Carbon Credits
Carbon credits can be established on all ranges of parcel sizes. Most carbon credit developers are looking for larger tracts (over 100 acres) of forestland, and over several hundred acres of grassland/farmland. Forestland is generally more valuable for carbon credits because trees sequester more carbon than any other type of plant or vegetation.
Typical Carbon Credit Contract Length
Carbon contracts vary depending on the carbon developer and the type of carbon credit. Timber carbon credit contracts can be as short as 12 months, while agriculture-based carbon credit programs tend to be much longer and range from 5-100 years.
4) Leasing Water Rights
Landowners with access to water resources can lease those resources to companies or organizations that need them for their operations. This can include leasing water rights for irrigation or use in manufacturing processes. Water leasing can be a way for landowners to generate income from resources that they may not have a use for themselves.
Amount of Water Required to Lease Water Rights
The amount of water that you can trade is heavily dependent on the location and regulations on the resource. As with most resources, the larger the amount that you have, the more interest in your listing you'll receive.
Typical Water Rights Lease Length
Water can be leased on a seasonal or long-term basis depending on the regulatory environment in your specific area.
5) Oil & Gas Mineral Leasing
Landowners can lease their minerals to mining and exploration companies for the extraction of minerals such as coal, oil, and gas. Mineral leasing can provide significant income in areas where these valuable resources exist in abundance. The United States is the only country in the world that allows private citizens to own minerals. Mineral ownership can, and often does, differ from surface ownership. Meaning that just because someone owns the surface, it doesn’t mean they own the minerals, and vice versa.
Acreage Required to Lease Oil & Gas Rights
Minerals down to fractions of an acre can be leased.
Typical Oil & Gas Lease Length
Most oil and gas leases are paid upfront with a primary term of 3-5 years. This commonly includes a 2-year extension as well. That means that an exploration company has 3-5 years to drill for and produce an oil and gas well, or the lease expires. The lease can be held in perpetuity as long as the production continues based on the terms of the lease.
6) Leasing Mineral Rights for Mining
Landowners can lease their minerals to mining companies to explore important minerals such as gold, silver, copper, coal, uranium, sand/gravel, and others. Landowners must own mineral rights to take advantage of leasing their property for mineral exploration. The United States is the only country in the world that allows private citizens to own minerals. Mineral ownership can, and often does, differ from surface ownership. Meaning that, just because someone owns the surface, it doesn’t mean they own the minerals, and vice versa. Mineral exploration can involve subsurface and surface extraction, where the mineral and surface owner will need to be common.
Acreage Required to Lease for Mining
Minerals down to fractions of an acre can be leased for mining operations. Precious mineral leases are common down to a few acres, while less valuable minerals such as sand/gravel require larger amounts for economic purposes
Typical Mining Lease Length
Mineral lease length is typically determined by the presumed amount of resources to be extracted. Lease terms can be in 5 or 10-year phases with the option for the developer to renew at the end of each phase.
7) Leasing Land for EV Charging and Battery Storage
Landowners can lease their property for the installation of electric vehicle charging stations and battery storage facilities. This can be a good option for landowners who are interested in sustainable energy and want to contribute to the growth of the electric vehicle industry. Any site that has nearby access to transmission/distribution and a substation may be good for battery storage, while the same criteria in addition to major highway or road access, can be ideal for EV charging.
Acreage Required for Energy Storage & EV Charging
EV charging stations can be placed on as small as ½ an acre, while battery storage tends to be on parcels with at least 2+ buildable acres. Large battery storage sites can lease parcels up to 40 acres in some instances.
Typical Battery Storage & EV Charging Station Lease Lengths
EV charging and battery storage leases are typically 20-30 years with options to extend and/or allow periodic facility upgrades.
Which Lease Option is Best for My Land?
Understanding which resource is the best for you to lease as a property owner comes down to a couple of qualifications: viewing the developed site, timeline of the lease, how much property you own, what type of property you own, and proximity to electrical infrastructure.
LandApp has created a fun 5-question quiz to help you determine which type of leased resource best fits you and your property. Each question has 4 possible answers, so keep track of your answers to identify the best resource for you.
1) Do you live on your property or do you ever plan to live on the property?
A. Yes, I currently live on the property
B. I don’t live on the property but my farm animals do
C. No, and I don’t plan on living on the property ever
D. No, but I plan to within the next decade
2) What view do you have when you look at the property?
A. Water features like a pond, river, or lake
B. Wide open pasture
C. Hilly
D. Forested
3) Do you plan on keeping this property in the family?
A. Yes, but it will not be occupied by my family
B. No, I plan on selling the property during my lifetime
C. No, my family will sell the property after my lifetime
D. Yes, my family will occupy the land
4) How large is your property?
A. Smaller than 10 acres
B. Between 10 and 50 acres
C. Between 50 and 150 acres
D. Larger than 150 acres
5) Do you currently lease your property?
A. No
B. Yes, for agricultural purposes
C. Yes, for ranching purposes
D. No, I just sell my timber
Majority of A answers:
Your property could be a good option for battery storage development. On smaller properties, battery storage facilities can thrive as they don’t take up a lot of space and can be hidden by shrubbery. The qualifications developers look for, for a battery storage site is proximity to electrical infrastructure like transmission lines, substations, or solar/wind farms.
Majority of B answers:
Your property could be a good option for solar farm development. Solar projects can range in size depending on their functionality (40+ acres for commercial solar or 5+ acres for community solar), but solar is a great option if you also plan to keep animals on the property or if you want to continue farming operations. Agrivoltaics has become a hot topic among landowners looking to combine solar energy with agricultural needs.
These solar leases can last between 25 to 50 depending on the size and goal of the project. However, property owners who enter one of these leases can sell their lease payments for a lump sum upfront so they can get paid out immediately and not worry about inflation.
Majority of C answers:
Depending on whether you live on your property or not, your property could be great for wind development! The great thing about wind turbines is that they don’t take up much space on the property. So if you have hilly terrain or animals present on the property, you can still qualify for a wind lease if your property is large enough or if you are already near a wind farm.
Wind developers like to choose large tracts of land since that’s the best way to get energy generated from the turbines and make it easier to build on if it is all owned by the same owner. These leases last between 30 to 50 years depending on the lease contract details and the property owner can also sell these lease payments for a lump sum upfront as well.
Majority of D answers:
If you have a large, forested property you could be eligible for a carbon credit lease. There are many different carbon credit programs available depending on what your property is like. If you have a large property that could be reforested there is a carbon program to support that! These leases depending on the program can range from 5 to 100 years.
How to Lease Land to Generate Income
Overall, the leasing options available to landowners depend on the resources that they have available, the type of land that they own, and the location of their land. From tapping into the renewable energy sector with solar and wind leasing to exploring traditional industries like mining and oil and gas production, there is potential for substantial financial gain. It's important for landowners to carefully consider all of their options to make the best decision for their property.
To start receiving offers to make money on your land through renewable energy lease opportunities, you can list your property for lease at no cost on LandApp's marketplace, which is actively used by hundreds of renewable energy developers nationwide to connect with property owners: