100+ Acres and Utility Scale Solar Farm

[Trey Bonner]

Hi BP family. I am wondering if anyone in the community has insights on utility scale solar farms developments. My family owns 100+ acres in TN and we are in the early stages of exploring our options. I am currently reading Solar Farms by Susan Neill, Geoff Stapleton, et al. to gain a baseline understanding of the industry and whether our property is ideal for a solar farm. Based on the book, a key component that impacts whether the project will be successful is to identify an experienced EPC company/group and a broker to help on the financial side. 

I am reaching out to the community to ask if anyone knows of resources (books, articles, examples, contacts) that could help layout the entire process from land assessment, leasing our land versus purchasing and operating the farm on our own, finances, timeline, etc. 

Thanks in advance for your thoughts. 

[Mason Moreland]

What downsides are you thinking of avoiding RE: leasing vs. developing it yourself?

So I think it is doable to develop and operate one yourself. The main drawbacks to this are that it is very much not passive as this would likely be a full-time job for 3-5+ years to get it stood up, your new entity would be responsible for upkeep and repairs for the next 20+ years, and once the Power Purchase Agreement (PPA) is up you'd be responsible for disposing of the aging equipment if they don't want to re-up. Main plusses would be you control the property in full, you learn some valuable skills and potentially create your own business in the field, and you could realize higher annual CoC returns by cutting out the developer/operator. There are several main hurdles to overcome for you to realize the higher returns of ownership over leasing:

- Get all the variables needed to accurately underwrite the deal

- Permitting for the facility (this will likely be a large portion of non-CapEx budget and the timeline)

- Get a PPA with a power company

- Get financing for the deal

- Find and secure a contractor that will correctly build the facility

Edit: One other thing to note, most of the developers in that area are looking for facilities in the 1,000 acre range, so you may have some size/economies of scale disadvantages but that's to be expected vs. large national and multi-nationals. You could consider leasing neighboring land for your installation if it made sense.