No Green Thumb? Try "Solar" Farming

Your life’s ambition has always been to quit your job, buy 10 acres of land in the boonies and start a farm. Congratulations! You share that ideal with 52 percent of Americans! As population increases, land becomes more expensive. Barring another recession, or a second Great Depression, it will continue to rise in price. If you manage to buy 10 acres (or more), good on you! You must be doing something right. The Standard Farm: Not Always Possible On the other hand, what you buy (at the price you can afford) may be rocky, hardpan clay, hilly, or generally unsuitable for that hobby farm you had in mind. Even worse, you may not know this until you have personally inspected the entire plot and even dug a few experimental shovelfuls. Your land may also contain rare species of plants or animals, which means getting a farming permit is impossible. Or, as in the case of California and some Western states, enduring drought may make raising anything very problematic, given the cost of installing an irrigation system and the general unavailability of water. In some cases, it may even be “brownfield” land; land cleaned up by the federal government after industrial processes have tainted the soil and groundwater, and then moved on. The buyer is required to tell you this, if he or she knows. However, the law of “caveat emptor” – let the buyer beware – is always the best assumption. The Solar Farm What do you do with 10 acres that can’t reasonably be farmed? You could sell it to a developer for housing, but what is the point of buying only to sell for about the same price, plus all the hassle of legal consultations and fees? Instead, consider starting a solar farm. It may not be as aesthetically pleasing as a field of bright yellow flowering canola, or a sea of golden wheat, but a solar farm can make you feel very “green”, knowing you are providing power for about 330 homes, including your own. Profiting from a Solar Farm Lease Yes, by all means, build your dream home in the country, on a comfortable 1.5 acres. Then lease the remaining 8.5 acres for solar energy. In California, PG&E recently offered to lease land at $0.10 and $0.12 cents per kilowatt-hour (kWh). This averages about $2,500 per acre, or $21,250, but rumor has it that some solar developers are offering as much as $5,000 per acre, or $42,500! This is way more than you could reasonably expect to get out of 8.5 acres of canola ($475), but not quite as much as 8.5 acres of organic strawberries ($28,900)! Assuming you could even raise organic berries. Typically, the lease payment for a solar farm is once a year, at the beginning of the lease period. There are, however, several catches. First, the land has to be relatively level (i.e., less than 6 percent slope). Second, most lessors require 40 or 50 acres, minimum. Third, you can’t lease land in a known flood plain or a designated wetlands area, or one that provides endangered species habitat. Finally, you essentially sign away all rights to your land for the 20-30 year lease period, including most water and any mineral rights. The upside? The lessor – not you – pays the property taxes on the land (though not, of course, on the land around your home). The downside? You don’t get the tax exemption. The lessor also insures against hazards, and you can even sell your property providing the new owner agrees to continue the solar land lease as written. Starting Your Own Solar Farm You could even start your own solar farm, if you could find the financing, but it is a lot harder and there are a lot of loopholes that require a lawyer. The biggest one is that the government requires you to earn five percent of your annual income via growing something besides solar power, and that can be tough on the single acre you have left. In addition, you would be unlikely to meet the deadline: the Solar Investment Tax Credit, or ITC, expires in 2016. Before you sign on the dotted line for a solar lease, however, consider two factors. Your neighbors may protest a solar farm and, if there are enough of them, they could sway county government into refusing a permit. Secondly, with the failure of California crops due to drought (and an equal, if less advertised, lack of water in other Western farming states), the price of food may rise even further, making some crops more valuable than $5,000 per acre. Consult your state university’s agricultural extension division, or the U.S. Department of Agriculture (USDA) and its farm loan and grant program for excellent advice and assistance.