Lease terms 8 parts
What does a solar farm lease involve?
The parts of a solar farm lease offer to understand before you sign, and the questions to ask.
Sources: Energy Infrastructure Commissioner, Queensland Farmers' Federation, NSW Farmers Updated 12 Oct 2026 Sources and methods
01 · Option
Offers often start with an option, then a lease
An option gives the developer the right to lease your land later, while it studies the site and seeks approval. The lease starts only if the developer takes up the option. The developer usually pays an option fee for this period.
Questions to ask
- How long is the option period, and can the developer extend it?
- What is the option fee, and when is it paid?
- What can you do with the land while the option runs?
02 · Term and increases
Leases often run as long as the farm: 20 to 30 years
Solar farms are usually planned to last 20 to 30 years, and leases often match that, sometimes with an option to extend. Rent can rise each year by a fixed percentage, with inflation (CPI), or be linked to the energy the farm produces.
Questions to ask
- How long is the term, and who can extend it?
- How does the rent rise each year: a fixed percentage, CPI, or production?
- When does rent start, and can it be paused or stopped?
03 · Rent
Rent is often a dollar amount per hectare a year
Rent differs by region and project, and we have no published solar rent to compare with. The lease offer check adds up an offer over its term and shows what it is worth in today’s money.
Questions to ask
- Is the rent per hectare, per megawatt, or a fixed amount?
- Is the rent per hectare of the whole lease area, or only the land under panels?
- Is any rent paid for land the farm doesn't use?
04 · Decommissioning and the bond
Removing a solar farm and restoring the land can be expensive
The Australian Energy Infrastructure Commissioner's guide for landholders recommends agreeing the decommissioning plan, getting a detailed estimate of its cost, and securing the obligation with a bank guarantee, bond or trust fund. The Queensland Farmers' Federation suggests keeping a good record of the site's condition before construction starts.
Questions to ask
- Who pays to remove the farm, and how is that money guaranteed?
- What is removed: panels, foundations, cabling, hardstands and tracks?
- What condition must the land be returned in, and how is its condition before construction recorded?
05 · Insurance and access
The lease sets who is insured and who can come onto the land
A solar farm brings contractors, vehicles and equipment onto a working property: many during construction, fewer for maintenance over the term.
Questions to ask
- Whose insurance covers injury or damage on the site, and are you named on it?
- Who can enter the land, when, and by which tracks and gates?
- Who manages fences, weeds, fire breaks and biosecurity on the lease area?
06 · Keeping grazing
Some solar farms keep stock or crops on the land
At least 10 of Australia's 190 operating solar farms of 5 MW or more have a public source saying sheep, cattle or crops are on site.
Questions to ask
- Can you keep grazing under and between the panels?
- Who manages the stock, and does anyone pay for the grazing?
07 · Tax and rates
A lease can change what you pay
Rent from a lease is income, and a lease can affect council rates, land tax and how a sale of the land is treated.
Questions to ask
- How is the rent taxed, and does the lease change how a sale of the land is taxed?
- Who pays any change in council rates or land tax?
08 · Independent legal advice
Independent legal advice is recommended before signing
Agreements are binding, and are often passed to a new owner if the project is sold. The Australian Energy Infrastructure Commissioner warns that landholders may not have the legal support to be protected in the long term. In Queensland, the Queensland Farmers' Federation's Energy Information Service for Landholders gives free information on 07 3329 7500.
Questions to ask
- Will the developer pay for your own lawyer to review the agreement?
- What happens to the agreement if the project or your land is sold?
Sources
- Considerations for landholders before entering commercial agreements, Australian Energy Infrastructure Commissioner, January 2023
- Position statement: treatment of renewable energy assets at end of life, Australian Energy Infrastructure Commissioner, October 2025
- Thinking long term: how to factor in decommissioning, Queensland Farmers' Federation, June 2025
- NSW Renewable Energy and Transmission Landholder Guide, NSW Farmers, February 2025
General information, not legal, tax or financial advice.