For farms & landowners
Land lease or on-site solar — which is right for you?
Two roofs or fields, two very different businesses. Generate and export the power yourself, or hand a parcel of land to a developer for a guaranteed, index-linked rent. Neither is automatically correct. The right answer depends on your capital, your appetite for risk, and what you need the land to keep doing.
Almost every farm or estate with roof space, a spare field, or an idle paddock eventually gets the same phone call. A developer wants to lease your land for a solar farm. Or a supplier wants to sell you a system to run your own operation. They sound like the same conversation.
They aren't.
On-site generation keeps you in the business of using and selling electricity. You carry the capital cost, or you finance it instead. Either way, the roof or field keeps doing whatever it already did, plus generation on top.
Leasing land to a developer removes you from that business almost entirely. There's no capital outlay and no operating risk. But the lease commits the land to one use, at one rent. That arrangement will likely outlast your current plans for the business.
Both can be the right decision. This guide sets out the framework for choosing between them.
The two paths
Path one
Self-supply and export
You install a system sized to your buildings and demand. A funder can do this on your behalf instead, under a PPA or lease-to-own arrangement. Generation offsets your own consumption first — the most valuable electron is the one you don't buy. You sell any surplus back to the grid under the Ofgem-administered Smart Export Guarantee, which covers generators up to 5MW.
- You keep the land or roof in its current use, plus generation on top
- Return depends on your own tariff, load profile and the capex you fund
- You (or your funder) carry performance, maintenance and market risk
Path two
Lease the land to a developer
A developer takes an option, secures planning and a grid connection, then builds and operates a much larger ground-mounted array. That array is commonly tens of megawatts, built on land you no longer farm. You're a landlord, not a generator. You receive a fixed, usually index-linked rent, for a lease term that typically runs 25 to 40 years.
- No capital outlay and no generation, performance or market risk
- Guaranteed rental income, largely protected from inflation by indexation
- The land is out of agricultural use, and largely out of your control, for the lease term
The real trade-offs
Income certainty versus control. A land lease is about as close to risk-free income as farming gets. The rent doesn't move with weather, wholesale power prices, or your own management decisions. Self-supply is a real business instead.
Its return depends on tariffs, your load profile, and how well the system performs. You, or your funder, carry that risk. What you buy back with on-site generation is control. The land keeps doing what you need it to do, and the asset is yours to change, sell, or repurpose.
Land-use loss versus capital risk. A lease surrenders the land — usually the better-connected, flatter, more developable parcels a site finder wants — for a generation. In return, you get only a decommissioning bond and a reinstatement obligation at the end. On-site generation risks capital instead.
That capital is yours if you buy, or a funder's if you take a PPA. Either way, the land stays in your hands, in whatever use you choose.
What the rent is actually worth. Rural surveyors publish industry benchmarks that put ground-mounted solar rents well above typical agricultural rent. That said, the exact figure moves with site quality, grid proximity, and negotiating position.
Savills' research on renting land for renewables cites an industry-quoted return in the region of £2,500 per hectare. That's roughly £1,010 per acre a year for large-scale solar PV leases.
Strutt & Parker's rural advisory team has separately noted many solar rentals settling nearer £950 per acre. That compares with £150–£200 per acre typical of a Farm Business Tenancy. Landlords typically index-link the rent, over a lease term that can run to 40 years.
Treat any of these figures as a starting point to negotiate from, not a fixed price. Better-connected, larger, flatter sites command more, and a good adviser earns their fee in that negotiation alone.
There's a tax dimension too, and it cuts the other way from the headline rent. Land farmed in-hand, or let on a Farm Business Tenancy, typically qualifies for Agricultural Property Relief from inheritance tax. Once it's let for solar, it's no longer agricultural use.
As a result, you generally lose that relief, per Savills' own analysis. That doesn't make leasing the wrong decision. It does make it a decision to model properly, alongside the rent, before you sign.
How agrivoltaics changes the calculus
The starkest version of the choice — hand over the land, or keep farming it — isn't the only option. Agrivoltaics keeps the land in agricultural production alongside the array. Sheep grazing beneath a conventionally mounted scheme is now the established, low-friction version in the UK. It's a large part of why grazing tenancies and solar leases increasingly sit on the same field.
Developers are also trialling other designs. Panels raised higher off the ground, mounted vertically, or spaced further apart let light and machinery through. These designs aim to keep some arable or horticultural use viable too. That said, it's a less mature, more site-specific approach than grazing.
Where it works, agrivoltaics doesn't just soften the "land-use loss" side of the trade-off. It can also strengthen your negotiating position on the lease itself. A scheme designed to keep grazing viable is easier to defend at planning, against best-and-most-versatile agricultural land policy. Raise it explicitly with any developer at the heads-of-terms stage, not as a concession they volunteer unprompted.
Grid connection: the same constraint, a different scale
The same thing gates both routes — headroom on the local electricity network — but at very different scales. An on-site system sized to a farm's own demand is usually a small-to-medium connection. It falls under the Energy Networks Association's G98 or G99 frameworks. Because the capacity involved is modest, this is a shorter, more predictable path to a connection offer.
A leased site built for tens of megawatts sits at the other end of the same process. It needs the fuller G99 technical assessment and a formal application to the DNO. In areas where the network is already busy, there's a real possibility of reinforcement costs. You might also face a place in a connection queue that can run to years rather than months.
That's precisely why a serious developer secures the grid position early. It's also why a landowner should treat "we have a connection offer" as a substantive fact to verify. Don't take it on trust before signing an exclusivity agreement or heads of terms.
Making the decision well
Neither path is right by default. A developer's option letter or an installer's sales survey is not an independent second opinion.
We help farms and landowners test both routes properly before you sign anything. That means a feasibility study that reads the site — capacity, yield, grid headroom — on its own merits. It also means independent advice on the financing and lease structures, whichever direction the numbers point.
Feasibility Studies
An independent, site-by-site read on whether commercial solar stacks up — technically and financially. You get the answer before spending a penny on kit.
Learn more →PPA & Financing Advice
Independent guidance on how to fund solar: outright purchase, lease or a power purchase agreement (PPA). We show the numbers behind each.
Learn more →Sources & further reading
- Savills Research — Renting and renewables (land-lease rent benchmark, lease terms, Agricultural Property Relief)
- Strutt & Parker Rural Hub — Solar farm offers to landowners need careful thought
- Ofgem — Smart Export Guarantee (SEG)
- ENA — G99 connection guide for Type B–D generation (commercial, industry, developers, farms)
Land lease vs on-site solar: frequently asked questions
Can we do both — lease some land and self-supply from a roof?
Yes, and for many farms that's the right answer rather than an either/or. Barn and shed roofs can cover the operation's own consumption. Meanwhile, you can lease a separate parcel of land to a developer for a larger array. The two decisions don't have to happen together, and often shouldn't.
Do we lose Agricultural Property Relief if we lease land for solar?
Often, yes, and it's a real part of the decision. Land farmed in-hand, or let on a Farm Business Tenancy, typically qualifies for Agricultural Property Relief from inheritance tax. Once it's let for solar, it's no longer in agricultural use. As a result, you generally lose that relief, as Savills' own research on renewables leases sets out. It's a question for your own tax adviser alongside the rental figures, not an afterthought.
What happens to the land at the end of a solar lease?
A properly drawn lease obliges the developer to decommission the array and restore the land to agricultural condition. The developer usually backs this with a decommissioning bond, funded over the lease term or set aside upfront. That obligation, and who holds the bond, matters. It's exactly the kind of clause you should have reviewed before signing heads of terms.
Does a leased solar farm still need planning permission?
Yes, ground-mounted schemes above a certain capacity go through full planning permission. Above 100MW in England — raised from 50MW by the Infrastructure Planning (Onshore Wind and Solar Generation) Order 2025, in force 31 December 2025 — that means the Nationally Significant Infrastructure Project regime instead. Either way, the process covers landscape and visual impact, best-and-most-versatile agricultural land policy, and grid connection. The developer normally leads and funds this process. But the outcome — and any conditions attached — is still the landowner's problem for the length of the lease.
Weighing up a land lease or an on-site system?
Tell us about your farm or estate and what the developer or installer has offered. We'll give you an independent read on whether it stacks up — before you sign anything.