A closer look at how renewable energy lease payments compare to traditional crop returns
What would it mean for your operation to have one revenue stream that doesn’t depend on rainfall, commodity prices or input costs?
As farm income projections soften and volatility remains high, some landowners are taking a closer look at how renewable energy leases stack up against traditional crop returns.
In many cases, the comparison is striking. Solar and wind leases can pay three to eight times more per acre than traditional crop farming returns.
That’s the short answer. The longer answer depends on your land, your costs and your long-term plans.
The Current Farm Income Picture
Recent university research on crop budgets paints a challenging picture. According to the University of Illinois crop budgets for 2025, corn is projected to lose between $70 and $73 per acre across all regions and productivity levels. Soybeans fare somewhat better, but still show losses of $43 to $71 per acre. Purdue’s recent crop cost guide shows similar pressure, including an $80 per acre loss on high-productivity corn acres and up to $345 per acre losses on low-productivity ground.
Even cash rent numbers provide context. USDA data places the national average cropland rent around $161 per acre, with non-irrigated land averaging $147 per acre and irrigated land averaging $244 per acre. For many landowners, that rent benchmark becomes the baseline comparison when a developer makes an offer.
Renewable Energy Leases
Lease compensation for renewable energy projects varies significantly based on location, project type, market conditions and individual negotiations. Solar leases are typically structured as per-acre annual payments, while wind leases often compensate on a per-turbine or per-megawatt basis. Batter storage agreements may use capacity-based pricing. Regional factors, including land values, proximity to transmission infrastructure, local energy markets and developer competition, all influence what landowners receive.
Because market conditions change and offers differ substantially even within the same county, REFA encourages landowners to research current rate data before entering negotiations. Useful resources include the Purdue University Ag Economy Barometer (May 2024), Iowa State University’s Center for Agricultural and Rural Development (Winter 2022), Kansas Farm Bureau Legal Foundation (May 2025), and in The Conversation.
Lease terms commonly run 20 to 35 years, often including construction and operating periods. Many agreements include annual escalation clauses and decommissioning provisions requiring the developer to restore the land at the end of the project’s life.
A Middle Ground: Agrivoltaics
Some projects are experimenting with agrivoltaics, which integrates agriculture and solar panels on the same land. Research and field examples suggest certain crops and livestock grazing systems may coexist with solar under the right conditions.
Results vary by region and crop type. In some cases, yields decrease. In others, shading effects have improved outcomes or reduced irrigation needs. The takeaway is not that agrivoltaics guarantees higher production, but that dual use is actively studied and implemented in certain settings.
Understanding the Trade-Offs
Higher per-acre income does not automatically make an energy lease the right decision.
Solar and wind agreements are long-term commitments. When option periods, construction timelines and extensions are included, these agreements often become multi-generational commitments. For landowners planning to pass land to the next generation or maintain flexibility, long-term leases require careful thought about family goals and succession plans.
Regional economics also matter. A lease offer that looks attractive in a lower-rent county may feel less compelling where cropland rents are significantly higher.
That said, the payment rate is only one part of the equation. Escalation clauses, surface use provisions, decommissioning requirements and restoration obligations affect long-term value.
Before making a decision, landowners should run their own numbers. What does that specific field generate after all expenses? How does a lease compare over time? And how does it fit within broader family and operational goals?
Making a Decision That Fits Your Operation
Energy lease decisions are business decisions. They deserve the same level of analysis that you would apply to purchasing land, upgrading equipment or restructuring debt.
At REFA, we help landowners evaluate renewable energy opportunities with clear, practical information. Through education, peer-to-peer networking and non-legal lease review services, members gain insight into both the financial and long-term implications of these agreements.
If you’re weighing an offer and want to better understand how it compares to your current returns, REFA is here to help you think it through. Learn more about REFA membership and how we can help you evaluate your options.
