Do you own land that lies fallow or yields only low returns? Leasing it for solar farms and renewable energy can generate annual income of up to €5,000 per hectare. This guide shows you how to assess the potential of your property and set the course for successful implementation.
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The topic briefly and concisely
Leasing land for solar parks can generate annual revenues of €1,500 to €5,000 per hectare, which is far above traditional agricultural leases.
Eligible plots often have to meet minimum size requirements (approximately 1 hectare) and belong to specific categories such as conversion areas or disadvantaged regions.
The complex approval process, including the development plan and environmental assessment, is typically fully covered by the investor and takes 1-3 years.
Are you wondering how to maximise the value of your property in the era of the energy transition? The answer might be right above your land. Establishing solar parks on private land has become one of the most lucrative options for owners. Driven by the Renewable Energy Sources Act (EEG), investors are actively seeking suitable areas and offering long-term lease contracts that often far exceed traditional agricultural yields. This article guides you through the key factors – from site requirements to the approval process and financial evaluation. You will learn how to position your property for a green energy future and minimise risks from the outset.
Identifying potential: Why now is the right time for solar energy
The expansion of renewable energies in Germany is progressing at a rapid pace, driven by the German government's goals for 2030. This transformation presents a unique opportunity for landowners: converting land into highly profitable solar parks. Demand from project developers is enormous, which is driving lease prices to record levels. While conventional agricultural leases often yield only €300 to €450 per hectare per year, leasing for photovoltaic open-space systems can generate returns of €1,500 to €5,000 per hectare annually. These contracts typically run for 20 to 30 years, thus offering exceptional financial planning security. The legal basis for this is the Renewable Energy Act (EEG), which provides investors with security through guaranteed feed-in tariffs, making the market attractive for you as a landowner. A detailed analysis of the future property values is therefore essential. This development makes it imperative to thoroughly assess the suitability of your own land.
Site Analysis: Which Areas Qualify for a Solar Park
Not every plot is suitable for a solar park. Investors and the EEG 2023 set clear requirements for the land. A minimum size of one hectare (10,000 m²) is usually the lower limit, as smaller projects often do not make financial sense for investors. Crucially, the proximity to a feed-in point into the power grid keeps connection costs low. Ideal plots are unshaded, free from obstacles such as trees, and have a southern orientation to maximise energy yield.
According to the EEG, specific categories of land are particularly eligible for funding:
Conversion areas: Formerly used for military or industrial purposes.
Disadvantaged areas: Agricultural lands with low soil quality (measured in soil points) where arable farming is hardly profitable.
Roadside strips: Areas along motorways and railway tracks up to 500 meters wide.
Agri-PV areas: Here, agriculture is combined with solar power generation, which is eligible on most arable land.
A professional assessment of land factors is the first step to determining the potential of your plot. These criteria determine whether a complex approval process can be initiated at all.
Process Navigation: Successfully Mastering the Approval Marathon
The journey from the idea to the completion of a solar park is complex and subject to approval. As a landowner, you do not have to tackle this process alone; the project developer usually takes care of all the steps and costs. This is a significant advantage, as the bureaucratic effort is considerable and requires specialized knowledge. Collaborating with an experienced partner is, therefore, one of the most important investment strategies.
The typical process involves several phases:
Securing the site: First, a lease agreement is concluded between you and the investor, which regulates all rights and obligations.
Development planning: The municipality must create or amend a development plan (B-Plan) that designates the area as a special zone for photovoltaics.
Approval process: The investor submits the building application and obtains all the necessary reports, including environmental and species protection assessments.
Grid connection review: Simultaneously, the consent of the regional grid operator for connection to the power grid is obtained.
The entire process can take 1 to 3 years before actual construction begins. The financial assessment of offers should consider these timeframes.
Profitability Check: Maximise returns and manage risks
A solar park can generate around 1,000,000 kWh of electricity per hectare per year, which corresponds to revenue of approximately €60,000. Your share of this comes from lease income, promising a stable return over decades. However, alongside the income, the risks must also be carefully considered. A lease agreement binds you for 20 to 40 years – a long period during which markets and laws can change. A key point is the contractual arrangement for the dismantling of the installation at the end of the contract. The costs for this must be secured by a guarantee from the investor.
Also consider the tax aspects: Lease income is taxable as income from letting and leasing. Additionally, the change of use of the land from agricultural use (Property Tax A) to commercial use (Property Tax B) may lead to higher property tax. A thorough examination of the ecological and legal conditions is essential. These factors determine the long-term profitability of your project.
Strategic Decision: How a Neutral Assessment Creates Security
How do you ensure that the lease offer you have is truly market-appropriate? Given contract durations of over 20 years, a well-founded decision-making basis is not an option but a necessity. Naturally, an investor aims to set the lease as low as possible. Without objective data on your land value and the potential for solar farms and renewable energies, you lack a negotiation basis. This is where data-driven analyses come into play. They allow you to independently assess the profitability of your land.
A neutral, AI-driven valuation provides you with the necessary key figures to thoroughly compare offers from project developers. You will discover the true potential of your land and can enter negotiations with confidence. For initial queries and a quick assessment, you can also use interactive tools like the ImmoGPT chat. Get in touch now, without obligation, to receive a data-based Auctoa valuation. This ensures that you not only sign a contract but also secure the best possible return for the coming decades.
Conclusion: Profitable Energy Transition with Data and Strategy
Leasing land for solar parks offers an outstanding opportunity to achieve stable and high income while contributing to the energy transition. However, success depends on a careful assessment of location factors, a realistic evaluation of financial potentials, and a legally secure contract. The process is complex, but manageable with the right partner by your side. A data-driven, neutral assessment is your most important tool to set the right course. Seize the opportunity, but act informed – as good preparation is the best guarantee for 20 years or more of secure returns.
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Additional useful links
Federal Ministry for Economic Affairs and Climate Action provides information about the Solar Package 1 initiative in Germany.
Federal Environment Agency offers a publication on renewable energies in Germany in 2024.
Federal Network Agency provides statistics on renewable energies.
Federal Statistical Office (Destatis) publishes a press release expected to include statistics on solar energy.
Fraunhofer ISE delivers current facts on photovoltaics (PV) in Germany.
German Solar Industry Association provides market data on solar energy.
Federal Agency for Nature Conservation reports on the relationship between solar parks and biodiversity.
Chamber of Agriculture Rhineland-Palatinate publishes an article shedding light on the stance towards PV installation on agricultural land in Rhineland-Palatinate.
FAQ
What happens to my property after the lease agreement expires?
After the contract term (usually 20-30 years), the investor is obliged to fully dismantle the solar installation and restore the area to its original condition. Ensure that this dismantling obligation is secured by a financial guarantee (e.g., bank guarantee) within the contract.
Do I have to pay tax on income from leasing?
Yes, the lease income from the leasing of land for a solar park is considered as income from letting and leasing and must be taxed as part of your personal income tax return.
Can I lease my farmland for a solar park without losing its status as agricultural land?
This is a critical point. Over the long duration of 20 years or more, there is a risk that the land may lose its arable status. This should be carefully reviewed contractually and potentially addressed through special clauses or by choosing an agrivoltaic concept, where agricultural use occurs simultaneously.
What minimum size should my property have?
Most project developers are looking for areas of at least one hectare (10,000 square meters), as the development of smaller areas is often not economically viable. Larger, contiguous areas are more attractive to investors.
What is the difference between regular solar farms and agri-photovoltaics (Agri-PV)?
In traditional solar parks, the area is used exclusively for electricity generation. In agro-photovoltaic (Agri-PV) systems, the solar modules are elevated to allow for continued agricultural use (e.g., crop cultivation or livestock grazing) underneath or between them. This can help preserve the agricultural character of the land.
Do I need to take care of the permits myself?
No, one of the greatest advantages of the leasing model is that the project developer handles the entire, very complex approval process. This includes communication with authorities, the preparation of reports, and applying for all necessary permits.
