Photovoltaic Lease Prices: Up to €5,000 Lease per Hectare per Year
Photovoltaic lease prices in Germany typically range between €3,000 and €5,000 per hectare annually. These prices depend on various factors, including solar radiation, proximity to a grid connection point, and eligibility for EEG funding. In this article, you will learn which aspects influence the lease prices for photovoltaic systems and why this form of land use is becoming increasingly popular.
Photovoltaic Lease Prices: Up to €5,000 Lease per Hectare per Year
Key Points at a Glance
Lease prices for photovoltaic systems can range between €3,000 and €5,000 per hectare annually, depending on factors such as solar radiation and proximity to grid connection points.
Leasing land for photovoltaic systems offers landowners a long-term source of income that can be significantly higher than traditional lease prices for agricultural land.
Key factors for lease price calculation include the size of the area, the approved buildable area, and eligibility for funding under the Renewable Energy Sources Act (EEG).
Photovoltaic lease prices can vary greatly and depend on several factors. The most important factor is the electricity yield of the solar park: the higher the yield, the more lease the lessee can pay. In recent years, leasing farmland for use by photovoltaic systems has gained significant importance. Annual lease income for photovoltaic systems can range between €3,000 and €5,000 per hectare.
These price differences result from various influences such as southern exposure, solar radiation, distance to the grid connection point, approved buildable area, EEG eligibility, as well as current electricity prices and credit interest rates.
The possibility of achieving high lease income makes leasing land for photovoltaic systems particularly attractive. It is a lucrative business for landowners who want to make optimal use of their properties. Let's now delve deeper into the factors that influence the amount of lease prices.
Introduction
Photovoltaics have gained significant importance in recent years, especially as a central pillar of renewable energies. More and more companies and investors recognize the immense potential in using photovoltaic systems for clean energy generation. In Germany, average lease prices for farmland are relatively low, currently around €375 per hectare, while leases for photovoltaic systems can be significantly higher. In fact, leasing land for photovoltaic systems can deliver returns 5 to 10 times higher.
Leasing land for photovoltaic systems not only offers a way to optimize the economic use of land but also contributes to reducing CO2 emissions. This is particularly relevant in times of climate change and the increasing demand for renewable energies. Operators of photovoltaic systems are willing to invest significant sums to secure suitable areas for their projects.
Typically, the prerequisites for using land for photovoltaic systems are clearly defined. These include the size of the area, solar radiation, and distance to grid connection points. However, there are also competing uses, such as agricultural use, that play a role in the decision. Let's now take a detailed look at how lease prices for photovoltaic systems are calculated.
How Are Photovoltaic Lease Prices Calculated?
The calculation of lease prices for photovoltaic systems is a complex process that depends on various factors. These factors include:
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solar radiation
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the slope of the terrain
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the distance to the nearest grid connection point
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the size and approved buildable area
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eligibility for funding under the Renewable Energy Sources Act (EEG)
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current electricity prices
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credit interest rates
These factors play a crucial role in determining the lease prices for photovoltaic systems.
Solar Radiation and Slope
Solar radiation is one of the most important factors for the yield of a photovoltaic system. In southern Germany, solar radiation values are higher than in northern Germany. Bavaria and Baden-Württemberg, for example, achieve values of up to 1100 kWh/kWp/a in annual yield per installed kWp capacity, while in the northern federal states, values of around 900 to 950 kWh/kWp/a are reached. The more optimal the solar radiation, the higher the yield and thus the possible lease prices.
Additionally, the slope of the terrain plays a role. Ideally, the terrain should slope slightly to the south. A maximum north slope of 5% and an east-west slope of a maximum of 10% are acceptable. These conditions maximize electricity yield and allow investors to pay higher lease prices.
Distance to Grid Connection Point
Another crucial factor in calculating lease prices is the distance to the nearest grid connection point. The development costs of a photovoltaic system also include grid connection fees, which vary depending on the distance to the substation. The costs for connecting to the public grid increase with the distance to the nearest substation. An acceptable distance to a substation is roughly 500 meters per hectare.
Size of the Area and Buildable Area
The size of the available area is another essential factor. Larger areas distribute the costs of project development over a larger system, increasing economic efficiency. For EEG-funded areas, at least 5 hectares are necessary to be considered for development. For areas outside the EEG, at least 10 hectares of contiguous area are required. The building permit specifies which part of the area can actually be built on.
Another important aspect is the building permit, which is only known at the end of the planning phase, about three years after the building permit is granted. Agri-PV systems can be built with about 0.4 MWp capacity per hectare. South-facing areas ideally achieve a capacity of 1.2 MWp per hectare, and east-west-facing areas up to 1.4 MWp per hectare, if permitted.
Eligibility for Funding under the Renewable Energy Sources Act (EEG)
Eligibility for funding under the Renewable Energy Sources Act (EEG) can also influence lease prices. Areas that qualify for EEG funding can achieve higher lease prices. EEG-eligible areas generally have a positive impact on lease prices, as the EEG guarantees the investor a constant remuneration for the electricity generated over a period of 20 years.
The so-called area framework specifies which areas are considered EEG areas. Examples include areas near highways or double-track railway lines, conversion areas, and disadvantaged, i.e., low-yield arable and grassland areas.
We at ENLAPA can help you check the EEG eligibility of your area and thus optimize lease prices.
Electricity Prices and Credit Interest Rates
Electricity prices and credit interest rates are also crucial for calculating lease prices. Professional investors must calculate the solar systems so that they are financially viable from the proceeds of electricity sales and cover all operating costs. Higher electricity prices therefore allow for higher lease prices. The average revenue, the so-called market value of solar, can be viewed daily on the market transparency page. Recently, however, electricity prices have dropped significantly.
The annual market value of solar was highest in 2022 at 22.30 cents per kWh, but in 2023 it has already dropped to 7.20 cents per kWh. In 2024, it was significantly lower again, for example, with a monthly market value of solar of only 3.16 cents per kWh in May 2024. You should not expect rising electricity revenues. The more photovoltaic electricity is available, the cheaper the electricity becomes overall. This can be read on the grid transparency page.
Increased interest rates make financing photovoltaic systems more expensive and, in many cases, unprofitable. ENLAPA therefore recommends choosing lessees very carefully; ideally, you should lease to strategic investors who are also actively involved in electricity trading and have customers who purchase the electricity. Such companies are able to pay your lease punctually for 30 to 40 years. Examine particularly high bait offers very carefully.
Average Lease Prices for Solar Parks in Germany
The average lease prices for solar parks in Germany vary by region and range between €3,000 and €5,000 per hectare.
Here are some specific lease prices by federal state:
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In Bavaria, lease prices for solar parks average €3,800 per hectare.
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In Brandenburg, €3,400 per hectare is paid.
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In Saxony, the lease price is €3,500 per hectare.
The highest lease prices can reach up to €6,000 per hectare, while the lowest lease price is around €3,000 per hectare.
These differences in lease prices reflect the different conditions and yield opportunities in the various regions. Factors such as solar radiation, terrain characteristics, and proximity to grid connection points play a crucial role here.
Lease Prices for Agricultural Land vs. Solar Parks
A comparison of lease prices for agricultural land and solar parks shows significant differences. Lease prices for agricultural land often range between a few hundred and several thousand euros per hectare annually, while lease prices for photovoltaic systems are significantly higher and can be more than ten times higher.
Particularly interesting arable land for leasing to solar parks are disadvantaged or uneconomical arable land. This comparison highlights the economic advantages of leasing land for photovoltaic systems compared to traditional agricultural use.
Advantages of Leasing Land for Photovoltaic Systems
Leasing land for photovoltaic systems offers numerous advantages. It provides a secure source of income over a period of up to 30 years, promotes the economic stability of landowners, and contributes to the reduction of CO2 emissions.
Let's take a closer look at these advantages:
Financial Advantages of Leasing Land for Photovoltaic Systems
The financial advantages of leasing land for photovoltaic systems are significant. Annual lease income can result in a substantial increase in the value of the land. Lease agreements for photovoltaic systems are often concluded over long periods, providing landowners with a stable and long-term source of income.
These contracts not only offer fixed annual payments but also sometimes the possibility of revenue sharing, allowing lessors to participate in the electricity sales of the photovoltaic system. However, you should carefully check that it is a reputable investor.
Long-term Income Security
Lease agreements for solar parks can run for up to 30 years, ensuring long-term income security. These contracts allow for consistently high lease payments for the first 20 years, with the option to extend the contract term.
In addition, they offer the possibility of profit sharing in the solar power revenues after 20 years, which reduces risks for investors and increases the security of returns for owners.
Environmentally Friendly Energy Generation
The use of photovoltaic systems contributes significantly to environmental protection by generating clean and renewable energy. Photovoltaic systems support the reduction of CO2 emissions by efficiently using renewable energies and thus reducing dependence on fossil fuels.
Through the sustainable use of land, photovoltaic systems can be installed on unused or marginal land, contributing to the regeneration of these areas and promoting biodiversity. This combined use of photovoltaic systems and sustainable land management leads to a balanced solution in the field of renewable energies.
Land Regeneration and Biodiversity
The sustainable use of land for photovoltaic systems can improve soil quality by reducing soil erosion and increasing nutrient content. By creating natural habitats and cultivating diverse plant species, biodiversity can be promoted, supporting local flora and fauna.
The use of land for photovoltaics can regenerate unused land and promote biodiversity. This provides an ecological added value that goes beyond pure energy generation and contributes to the preservation and promotion of biodiversity.
Prerequisites for Leasing Land for Photovoltaic Systems
To lease your land for photovoltaic systems, certain prerequisites must be met. The land should be at least 50,000 m² in size to be considered for leasing.
When assessing the potential of an area for a solar park, the following aspects are considered:
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Size
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Location
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Proximity to inhabited settlements
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Power lines
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Nature conservation aspects
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Spatial planning considerations
The land assessment determines the specific usage possibilities and legal restrictions for solar projects.
Minimum Size and Solar Radiation
The minimum size for areas to install an economically viable photovoltaic system should be over 50,000 m². A photovoltaic system requires an area that is exposed to the sun all day to be economically viable.
Unshaded areas are essential for the profitability of solar parks, as they require continuous solar radiation.
Nature Conservation
The area must be approved for development. Areas located in a nature reserve such as Natura2000 cannot be developed.
Step-by-Step Guide to Leasing Your Land
Leasing your land for photovoltaic systems can be a rewarding and transparent process. The leasing process provides a clear overview of all possibilities and steps for landowners. Here is a step-by-step guide to facilitate the process for you.
Contact and Consultation
Interested parties can request a lease offer by listing their area with ENLAPA. The consultation for owners who want to lease their land is free of charge and non-binding. The land assessment after contact usually takes 4-5 working days.
Land Assessment and Offers
In the land assessment for solar parks, various aspects are analyzed to determine the suitability of the area. Implementation possibilities and possible restrictions such as nature conservation and landscape protection are checked.
Contract Conclusion and First Lease Income
The basic term of lease agreements for farmland is 20 years. The lease agreement can be extended for a maximum of up to 40 years. The entire process from contact to commissioning of the solar park usually takes 12 to 18 months. This time span includes various steps of planning and implementation.
Summary: Factors Influencing Lease Price
The amount of lease prices for photovoltaic systems is influenced by various factors, including:
solar radiation and slope
distance to the grid connection point
size of the area and buildable area
eligibility for funding under the Renewable Energy Sources Act (EEG)
electricity prices and credit interest rates
These factors should be carefully examined to achieve the optimal lease price.
Leasing land for photovoltaic systems offers numerous advantages, including high lease income, long-term income security, and a positive contribution to the environment through the use of renewable energies. Lease prices are influenced by various factors, including solar radiation, slope, distance to the grid connection point, size of the area, buildable area, EEG eligibility, as well as current electricity prices and credit interest rates.
In conclusion, leasing land for photovoltaic systems is an attractive option for landowners. By meeting the necessary prerequisites and carefully examining the influencing factors, landowners can benefit from high lease income and the ecological advantages of this renewable energy source.
Frequently Asked Questions
Contact Us
If you are interested in leasing your land for photovoltaic systems, please feel free to contact us. We will be happy to check if your area is suitable for leasing and obtain offers from investors for you. Visit our website for more information: Request a free land assessment.
