How to Convince Landowners that Solar is the Best Use of Their Land
One of the biggest hurdles project developers sometimes face is convincing landowners that a solar project is a better use of their land than farming. Sometimes solar projects get pushback from the agricultural community that they’re going to take up too much farmland. But in most cases the solar project is the best economic use of the land compared to area crops such as corn, soybeans, cotton, dairy, etc.
At Strategic Economic Research we can produce a land use analysis as part of our economic impact report that will answer the question, “Is solar a good use of agricultural land?” to specifically address the concerns that project developers experience from the ag community.
If landowners continue to use the farmland for agricultural use, they face the uncertainty of yield and price fluctuations. If they choose to lease the land to a solar project for 30 years (this amount of time is typically the expected lease term) then they can be certain of their profit each year.
The methodology I use is to use historical US Department of Agriculture county-level data to run 500 Monte Carlo simulations of expected future profits from farming. I put these results in a format that is easy for the ag community to understand. For example, I show how much the crop prices and yields would have to rise in the next thirty years to match the solar lease. Sometimes prices would have to triple in that time frame, and most farmers would have no expectation of that happening. We put this analysis in tables and graphs to clearly lay out the argument that solar is a much better use of the land from an economic perspective.
What happens to the solar farm after 30 years?
Typically in the permitting agreement project developers are required to include a decommissioning plan to restore the land back to its original condition. The land is out of production for thirty years which can allow the land some time to revitalize. During the life of the solar project, soil can be improved by planting native grasses or pollinators. When the solar project is decommissioned, the land can once again be used for farming.
Farmers ask, “How are we going to feed the world?”
The concern from the ag community regarding a loss of farmland in order to provide food should not be overlooked. However, we must also understand that ag land is already producing energy. 35% of corn in the U.S. becomes ethanol and 30% of soybeans in the U.S. becomes biodiesel. It makes sense to take some of that percentage already going to producing energy and convert it to solar as it is more cost effective.
About the Author
I’m David G. Loomis, Professor of Economics at Illinois State University. I’ve been a professor there since 1996. I was Co-Founder of the Center for Renewable Energy at Illinois State University which focused on education and outreach. Through the center we also created a Bachelor of Science in renewable energy between the Departments of Economics, Technology and Agriculture.
I’ve authored 25 peer-reviewed publications and co-authored numerous renewable energy reports covering economic impacts, supply chains, property values, school district taxation and other topics. I’ve supported over 110 projects through permitting, and filed testimony 6 times at public utility commissions in Illinois, Iowa, Kentucky, Missouri, New Mexico, Ohio, and Wisconsin, and provided in-person testimony in 19 cases at the county level.