Anybody have experience with solar farms? I'm trying to figure out pricing for an existing 20 acre solar farm < 20 years on the lease, and an adjacent 50 acre vacant parcel in Hawaii.
I'm trying to understand a few things: All this assumes contract pricing with a state Elec. Co.
1) What is the market pricing for existing leases >20 years, and <20 years? As in priced like a NNN lease / going in cap rate. Either to buy the land fee outright or just the leasehold for 20-30 years?
2) How do developer's price the land / what yield are they looking for?
I've learned that the developers will tie up the land for 3-5 years with options to setup the solar deal operator, and have option to purchase fee, then flip to a yield buyer.
Anybody have rule of thumb costs for development/acre?
Thanks in advance!
Hi RE Dude, any of these topics helpful:
More suggestions...
Hope that helps.
Need a little more clarity on the request here - are you asking how to value the solar farm (project)? If I’m following your question, you’re looking at this from the wrong angle; acreage isn’t the most useful measure of solar project scale and value - nameplate AC (and DC) capacity in MWs is. A 50 acre solar farm could be anywhere from 2-5 MW - and then one would need to know the PPA pricing. Using those + some other assumptions, one could get an idea of what the project value is.
You’re right about the developer’s approach - if they’re interested in purchasing the land vs. leasing. Some solar developers have a preference, but the optimality of one over the other is situational. If looking to purchase solar, then yes, you’re looking to secure the ground via options while you work towards grid interconnection, local engagement, permitting, etc.
In days past the “pure play” developer was quite common, but these days the major renewable developers develop and own/operate. That said, smaller shops still exist, and often sell shovel-ready projects to larger developers for dev fees on a per MW basis.
My sense is that I didn’t provide much of answer - let me know how else I can help.
Source: development manager at major renewable development co
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