Solar Energy Expansion in Rural Communities

Betty Resnick

Economist

Arica Hamilton

Public Policy Analyst

Alternative energy sources such as wind, geothermal, hydro and solar have grown increasingly popular as ways to reduce greenhouse gas emissions and strengthen the grid by decentralizing power production. Solar energy, which converts energy from the sun into thermal or electrical power, is rapidly expanding across America and the world. Solar energy can provide numerous benefits but, like most things, also has its share of drawbacks.

Solar's Growth

Over the last decade, solar energy production has grown 25% on average per year and installation costs have dropped more than 40%, according to the Solar Energy Industries Association. Department of Energy research projects solar energy to rise from 4% of our nation's total energy production to 45% by 2050, potentially requiring nearly 10.4 million acres of land in solar production (an area about 30% larger than the state of Maryland). DOE expects 90% of projected solar development to be from utility-scale projects in rural communities.

Solar energy is leading the way, with much of the new development occurring on farmland and in rural communities.

Solar on Farmland

Although solar development will be distributed nationwide, large utility-scale projects will be concentrated in areas with favorable siting and interconnection opportunities. The ideal location for installing a solar power facility is on land that is clear, dry, relatively flat and close to existing grid infrastructure. Farmland typically meets many of these standards and has lower construction costs compared to other types of land. The same traits that make specific plots of land good for farming can also make them a prime candidate for utility-scale solar.

Solar energy leasing can help farmers who own land diversify their income. While these lucrative contracts may help save farms during down agricultural economic times, it can be a double-edged sword for farm operators, as more than half of cropland is rented. As solar development in rural areas grows, it drives up demand for land. And as demand goes up, so do land values and rental prices - representing another increasing input cost for farmers.

The potential for increased land competition and the higher rental rates that come with it aren't the only cause for unease. Concerns over "nonmonetary impacts" of solar energy leases, including land use changes from agricultural to industrial use, arose in 82% of delayed or stopped utility-scale renewable energy projects between 2008 and 2021, according to Massachusetts Institute of Technology analysis.

Advancing Agriculture-Friendly Solar

While there are several concerning issues related to the integration of solar and agriculture, there are some encouraging developments that may provide a pathway to sustainability for both industries. Agrivoltaics is the co-location of agricultural production and solar energy generation on the same land. At the moment, these projects often consist of sheep grazing, but research is being done to incorporate cattle grazing and crop production.

According to the National Renewable Energy Laboratory's agrivoltaics map, 59% of the nation's 567 projects defined as incorporating "agrivoltaics" did not list an agricultural output as an outcome, instead exclusively incorporating pollinator or native grass habitats. A new term, ecovoltaics, better suits solar projects incorporating pollinator habitats and is defined as a combined system of energy production and ecosystem services.

Takeaways

The U.S. energy system is undergoing rapid development with exploding electricity demand and power generation shifting toward low-carbon, renewable sources. Solar energy is leading the way, with much of the new development occurring on farmland and in rural communities. It has the potential to be a financial opportunity for landowners, yet it can also create barriers for farmer renters and the next generation.

Solar energy can be a great tool in the reduction of greenhouse gases, but it risks decommissioning our most productive agricultural lands. As we navigate toward clean energy solutions, it is critical that we prioritize the preservation of agricultural land. America needs renewable energy sources and resilient farms and ranches to continue providing the food, fiber and fuel we all depend on. Ultimately, the issue is not whether we have solar energy production, but where and how we have solar energy production.

Betty Resnick is an economist and Arica Hamilton is a public policy analyst at the American Farm Bureau Federation. This column was adapted from a Market Intel published by AFBF.