Publicly traded real estate investment trust (REIT), Farmland Partners Inc. has recently received a notice entailing plans of a renewable energy tenant to commence new solar power project construction in Clark County, Illinois, by the end of the month.

The project, which spans across six FPI properties sitting on 1,542 acres of land, will increase the company's rental income and boost its expanding portfolio of renewable energy sources.

After the construction is completed, the tenant will pay rents 50% higher than the rents paid by existing farms and over the 12-month period of construction, the tenant will make payments above the higher levels. 

It is imperative to note that FPI's current renewable power portfolio holds the capacity to produce 110+ megawatts of power across five solar projects and three operational wind projects.

According to the Solar Energy Industries Association's approach, the current energy capacity is enough to power 20,900 U.S. homes. The development envisioned for Clark County will be a major boost to its energy generation capacity.

FPI Chairman and CEO Paul Pittman stated that working with farmers and supporting their attempt to feed the world responsibly remains the firm's primary objective.

The firm has also identified that investing in renewable energy benefits the environment and delivers better returns to shareholders.

Pittman further claims that including the Clark County project, energy tenants are responsible for $1.5 million in revenue annually.

Since solar and wind leases often last between 15 and 40 years, these projects minimize the company's risk and offer long-term inflation protection.

Even though solar projects put back farm rents completely, wind projects amplify the existing farm rents, given that agricultural production can continue around wind turbines.

Furthermore, FPI has additional 13,700 acres of renewable energy projects at various stages of development and planning or under option. The option payments produce $45 per acre on average in added annual income apart from farm rents.

Source Credit - https://www.businesswire.com/news/home/20220824005204/en/New-Solar-Project-to-Expand-Farmland-Partners%E2%80%99-Renewable-Energy-Portfolio-Increase-Revenue