A Christian County poultry farm weighs a solar lease against its own array

Illustrative scenario: a composite built to show our method. Names, places and figures are hypothetical.

The Pruitt family farms in Christian County: eight broiler houses under an integrator contract and about 1,400 acres of corn, soybeans and wheat. A utility-scale solar developer offered to lease 180 of their acres. Separately, they wondered whether solar could cut the power bill for the houses and the grain dryer. This farm solar lease vs own example compares the lease income with the crop income it replaces, then sizes a small array against the farm’s own load. We compared commercial and financial terms only. We don’t give legal advice; the questions at the end went to the family’s attorney and CPA.

The offer, in hypothetical numbers

• Option period: up to 3 years at $45 per acre per year ($8,100 a year) while the family keeps farming.
• Operating rent: $950 per acre per year from year 4, rising 2% a year. This figure is hypothetical, chosen to show the arithmetic. It is not a market rate, and real offers vary widely; see 14 terms to compare.
• Term: 25 operating years, plus two 5-year extensions at the developer’s option.
• Decommissioning: a plan and bond under Kentucky’s siting rules for merchant generating facilities.

The developer holds both extensions. Count the option period and the lease could run 38 years, long enough to pass to the next generation.

What the farm gives up

The hypothetical net crop return is $230 per acre after direct and overhead costs, before land costs, rising 1.5% a year. That’s $41,400 a year on the 180 acres now and $43,291 in year 4, when rent would be $171,000, about four times as much.

Path, 30 years	Cumulative income from the 180 acres
Keep farming	$1,554,101
Lease, project built	$6,194,252
Lease, option expires unbuilt	$1,578,401

Farm solar lease vs own: how likely is the rent?

If the project is built, the lease dominates. The question is whether it will be. Berkeley Lab’s 2026 interconnection queue report found that about 19% of projects requesting grid interconnection from 2000 through 2020 had reached commercial operation by the end of 2025. A signed lease is one step of many; interconnection, permits and a buyer for the power come later. The family decided to budget around the option payments and treat rent as possible, not promised.

On-farm solar for the houses and the dryer

The farm uses about 310,000 kWh a year: roughly 248,000 for the houses, where tunnel fans peak on summer afternoons, 38,000 for dryer and bin fans from September to November, and 24,000 for the shop and office.

The concept is a 120 kW DC ground mount beside the houses, outside the lease area, making about 156,000 kWh a year, half the farm’s use. Two facts shaped the model:

• Exports are worth little. The farm’s co-op buys its power from TVA, and Kentucky’s net-metering statute doesn’t apply to TVA distributors. Export terms come from TVA and co-op programs, so we modeled a hypothetical 3.5¢ per kWh for exports against 10.5¢ for energy used on site, with 75% used on site. We left out demand charges: summer sun helps, but one cloudy afternoon can set the month’s peak.
• An array only offsets the meter it’s connected to. Eight houses may sit on several services, so the wiring plan decides the savings.

Using our payback estimator method with a hypothetical $2.30 per watt ($276,000), $1,800 a year for upkeep and 2.5% annual rate increases, year-one savings come to $13,650. Payback arrives in year 20, with $205,519 net over 30 years. At 60% on-site use, payback slips to year 23.

If their CPA confirms the farm qualifies for a federal commercial credit, and the array is placed in service by the end of 2027, an illustrative 30% credit would bring payback to year 15. USDA’s REAP program changed significantly in 2026, so the model assumes no grant; the family will check with USDA Rural Development.

Questions they prepared for their attorney and CPA

For the attorney:

• Can we end the lease if construction hasn’t started by a set date, and who controls the extensions?
• Does the lease limit our own solar, other easements or how we farm the remaining land?
• Kentucky’s siting statute names landowners as co-beneficiaries of the decommissioning bond for leased land. Are we named, and how do the lease’s removal terms compare with the statute’s?
• Who repairs drainage tile, fences and field roads damaged during construction?
• What happens if the developer sells the project or fails?
• How does the lease bind our heirs and fit our estate plan?

For the CPA:

• How is lease rent taxed compared with farm income?
• How could leasing affect our USDA farm program enrollment and base acres?
• How will the leased acres be assessed for property tax after construction, and who pays any increase?
• Would an on-farm array qualify for a federal credit and depreciation, and what sourcing records would we need?

For the integrator and the co-op: Do you need to approve an array near the houses, and what are the current interconnection and export terms?

Our Land Lease Offer Review organizes these comparisons for real offers.