Is the Appropriate Color of Solar – Green or Yellow? Week 2

Question Number 1:

What is the financial strength of the company that wants to develop a solar farm on your land?

This is critical information if you are entertaining leasing your land to a solar farm company. It is just as important if you are anticipating selling your land to the company. In both cases, they are operating in a subsidized market and those subsidies could be withdrawn abruptly leaving anyone involved that has not gotten all the way through the process in jeopardy.

If you are considering leasing your land to a solar company, please keep in mind that the economic landscape is full of big companies that went bankrupt. “Enron” should make your knees quiver.

So, before you go very far with a company that has approached you about developing a solar farm on your land, ask for a copy of their balance sheet and their income statement. Verify their financial ability to perform on their promises in all circumstances.

It is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long term the best investment is land.