Farmers across the United States are eyeing a new crop. Unlike corn or wheat, this commodity requires no fertilizer and little irrigation (though some weeding is required). And, while trade tariffs are slowing some efforts to grow this market faster, their impact has been significantly less than what, say, soybean producers have felt.
The harvest, in this case, is electricity produced by solar panels that could double in number in just the next four years. As the industry expands, flat, accessible farmland is fetching annual lease prices that range from $300 to more than $2,000 per acre. However, while farmers who host solar installations can benefit from dependable monthly lease checks, their neighbors increasingly view those rows of panels as an invasive species.
Two major drivers are pushing solar developers into more rural areas. First, many states are doubling down on their renewable energy goals by boosting the percentage of electricity utilities must purchase from renewable sources. Hawaii, California and New Jersey have committed to 100 percent carbon-free electricity production by 2045 or 2050.
A second major contributor to this expansion is the rapid drop in costs for photovoltaic (PV) panels and other equipment. In November, the investment firm Lazard noted that installed utility-scale solar costs had dropped 88 percent since 2009. This trend puts solar generation at near cost-parity with natural gas plants today, and at a possible economic advantage over a standard 25- to 30-year utility planning period. As a result, solar is becoming an increasingly attractive option for utilities eyeing new generation or power-purchase decisions. For example, the Midwestern utility MidAmerican Energy—a star presence in Warren Buffett’s Berkshire Hathaway portfolio—is moving to 100 percent renewable energy by 2020.
This growing demand is forcing solar developers to seek sites farther away from metropolitan areas. Farmland, especially if it’s located within a mile or two of an existing utility substation, could be seen as ideal; it usually is flat and unobstructed and has plentiful exposure to sunlight. In addition, many farmers welcome the idea of guaranteed income to balance the wide fluctuations they can face in agricultural commodities markets. In some cases, though, those farmers’ neighbors aren’t as pleased.
Lawsuits over proposed projects are cropping up over proposed projects from coast to coast. The County Council of Baltimore, Md., is debating a temporary moratorium on both new and previously approved community solar projects. Maryland recently established a three-year pilot effort to encourage these subscription-based installations, which are smaller than utility-scale arrays, and a dozen or so projects were already at some stage of approval. In Wisconsin, a 300-megawatt array that would include 1.2 million solar panels across 2,700 acres is drawing fire from neighbors of the 12 farms where land would be leased. In Oregon, state land conservation regulators have restricted the kinds of farmland on which solar projects can be installed.
The arguments against these projects, at both community- and utility-scale, are partially about aesthetics. Neighbors used to driving past acres of corn, wheat and soybean fields can view their solar panel replacements as an industrial intrusion into their rural lifestyle. But there is also a significant economic conflict. Many large landholdings are leased out in whole or in parcels to farmers who can’t afford their own acreage at rates that can be a lot lower than what solar developers now offer. So, a contract with a solar company could take that property out of the rental market for 20–30 years, which could, in turn, drive up rental rates in the surrounding area.
Neighbors also argue that, despite developers’ promises to return land to its original state at a lease’s end, that land likely will be lost to farming forever. Soil might be compacted and covered with weed-barrier fabric and gravel. After a few decades of that treatment, it could be nutritionally dead for agriculture. There also is no guarantee the current developer will still own the project 25 years later, so questions could arise as to who is responsible for any eventual restoration work.
A new approach to solar development, called “agrivoltaics,” could address at least the last of these concerns. The idea is taking hold in Massachusetts. Instead of hugging the ground, panels are raised high enough for people and, possibly, livestock to walk underneath. They are also spaced to allow sunlight to reach plant life below. University of Massachusetts researchers found grass and forage production for grazing cows hit 90 percent of the volume of wide-open pasture, while some vegetables—including peppers, broccoli and Swiss chard—reached 60 percent of the volume grown in traditional fields. The state now is incentivizing such dual-use developments as it stretches to reach a total of 3,600 MW of wind and solar capacity by the end of 2020.