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Solar option agreements: what landowners sign first

Updated September 26, 2026 · About 6 minutes

The first thing a solar developer asks you to sign is usually not a lease. It is an option: the company's right to lease your land later, if the project works out. What you agree to in the option shapes everything that follows.

What is a solar option?

An option gives the developer the exclusive right, but not the obligation, to lease your property later if the project moves forward. In exchange, you receive option payments, which may be yearly payments, a lump sum, or both (Sands Anderson).

How long does the option last?

Option periods commonly run three to five years from signing (Phelps; ReisingerGooch). The company uses that time to study whether the project is feasible, and to secure an interconnection agreement with the grid and a buyer for the power (Phelps). Ask whether the company can extend the option, for how long, and at what price.

What can the company do on your land during the option?

Expect the developer to have access to survey the land and run feasibility studies (ReisingerGooch). The option is almost always exclusive, meaning you cannot sign another solar lease, and perhaps no other energy agreement, on that land during the option (RMWBH). You may also be restricted from using the property in ways that could interfere with the project (Sands Anderson).

What does the option pay?

Because the project may never be built, it is worth requiring rent during the option period (National Agricultural Law Center). Development-phase payments are usually lower than operating rent, so AgriLife advises keeping that phase as short as possible (Texas A&M AgriLife). For reported Texas figures, see what Texas solar leases pay.

What if the project never happens?

Signing does not guarantee a project. Companies often sign options with many landowners and then pick the sites that fit best. If construction has not started by the end of the option, the agreement typically expires, you keep the payments already made, and you are free to sign with someone else (National Agricultural Law Center).

You can see how far a developer's project has gotten: ERCOT publishes every project in its interconnection process, and we list them on each Texas county page. See how to check whether a project is real.

Terms to push back on

Texas A&M AgriLife flags several clauses that often favor the company (Texas A&M AgriLife):

Confidentiality: clauses that keep you from discussing terms with neighbors. AgriLife suggests rejecting them.
Forum clauses: requiring disputes to be heard far from where the land is.
One-sided attorney fees: letting the company, but not you, recover legal fees if it wins.
Title guarantees: making you warrant title, when the company is better placed to check deed records.
Limits on your other land: for example, bans on building anything that shades the panels, or on crop dusting nearby.

Developers also usually seek broad rights to assign the agreement to another company without your consent (Sands Anderson). Ask who could end up holding your option.

Check a spot

Click your land on the map to get its free land report: flood zone, wetlands, nearest power line, soils, survey location, and the half-mile, 500-acre standout test. In Texas, parcel acreage fills in automatically.

Questions to ask before you sign

How long is the option, can it be extended, and what does each extension pay?
What will you do on my land during the option, and who repairs damage from testing?
Can I keep grazing or farming until construction starts?
Does exclusivity cover only solar, or all energy agreements?
Can you assign the option without my consent?
What are the full lease terms that apply if you exercise the option?

The sources above include law firms and the National Agricultural Law Center writing about practices in several states; Texas-specific rules can differ. General information, not legal advice. Have a Texas attorney review any option before you sign.