Can solar energy and ag coexist? August 21 webinar takes up ‘agrivoltaics’

By Drew Viguet
National Agricultural Law Center
U of A System Division of Agriculture

FAYETTEVILLE, Ark. — Does large-scale installation of solar panels on farms make the land unusable for other purposes?

Agrivoltaics, which is agricultural production under or around solar panels, will be discussed during the National Ag Law Center's webinar on Aug. 21, 2024. (U.S. Department of Energy photo by Merrill Smith)

“Solar energy development is increasing rapidly, which commonly involves large-scale solar projects on rural and agricultural lands that can take that land out of agricultural production,” Harrison Pittman, director of the National Agricultural Law Center, said. “Agrivoltaics offers the potential of keeping the land in production while also using it for solar.”

“Agrivoltaics,” as defined by the U.S. Department of Energy, is agricultural production under or adjacent to solar panels. This agricultural production can include crop production, livestock production or pollinator habitats.

In September 2021, the DOE released its Solar Futures Study, which looks at the role of solar in decarbonizing the U.S. electric grid. One finding from the study is that much land for ground-based solar development is needed to accomplish this: approximately 0.5 percent of contiguous U.S. surface area. The report notes that to meet this need, photovoltaic systems, or solar panels, could be installed on farming or grazing areas.

Key principles of agrivoltaics, including the impact of agrivoltaics on agricultural production, is the focus of the Aug. 21 NALC webinar, “Can Agriculture and Solar Co-Exist? Exploring the Promise and Challenge of Agrivoltaics.” The webinar will be presented by Peggy Kirk Hall, director of The Ohio State University Extension Agricultural and Resource Law Program, and Jesse Richardson, professor of law and lead land use attorney at West Virginia University College of Law.

The webinar begins at 11 a.m. Central/Noon Eastern. Registration is free of charge and available online.

“We’ve seen initiatives and mandates across the country geared toward boosting renewable energy to meet energy demands,” Hall said. “Solar energy is often a part of those initiatives, which raises many concerns for producers and communities as well, such as cost, impact on agricultural production, loss of prime and unique soils, and community land use goals. The installation of large-scale solar panels can limit that land’s ability to be used for other agricultural needs, but it doesn’t necessarily have to.”

In 2023, the agrivoltaic market size was valued at $5.5 billion, according to Global Market Insights, and that number is expected to grow at a compound annual growth rate of almost 6 percent from 2024 to 2032.

Richardson said that he and Hall will explore agrivoltaics from a variety of angles, shedding light on its opportunities and challenges.

“As renewable energy is an increasingly popular topic at local, state and federal levels, these conversations will inevitably become more frequent,” Richardson said. “We aim to inform the discussion on agrivoltaics, looking at how things are now and possible impacts for the future.”

All webinars in the NALC Webinar Series are recorded and archived on the NALC website.

For information about the National Agricultural Law Center, visit nationalaglawcenter.org or follow @Nataglaw on X. The National Agricultural Law Center is also on Facebook and LinkedIn.

For updates on agricultural law and policy developments, subscribe free of charge to The Feed, the NALC’s twice-monthly newsletter highlighting recent legal developments facing agriculture.

Going solar on your farm? There’s a web tool for that and funding deadlines are looming

By John Lovett
University of Arkansas System Division of Agriculture
Arkansas Agricultural Experiment Station

FAYETTEVILLE, Ark. — Agricultural producers looking to invest in solar energy for their farms are facing several key deadlines this year.

SOLAR POWER — Solar panels provide power to a poultry house. The Poultry Solar Analysis tool has been updated with information to help agricultural producers make timely decisions about using solar power on the farm. (U of A System Division of Agriculture photo)

First, rural small businesses and agricultural producers who are interested in going solar have until Sept. 30 — with two other deadlines before then — to apply for federal grants to help offset costs. And in Arkansas, Sept. 30 is the deadline to file for “legacy net metering” status to receive one-to-one energy credits for energy supplied to the electrical grid.

According to Professor of Agricultural Economics and Agribusiness Michael Popp with the Arkansas Agricultural Experiment Station, meeting both deadlines can have impacts on an agricultural producer’s return on investment for a solar project.

To help producers evaluate their options, Popp and his colleagues with the University of Arkansas System Division of Agriculture updated the Poultry Solar Analysis tool. This tool models the economic implications of solar energy with user input about their farm-specifics. Entered are the last 12 months of electricity cost and use to estimate equipment and installation costs, electricity rates, and financing options.

The updated decision aid tool also allows the user to specify a Rural Energy for America Program, or REAP, grant. Further, it offers a model showing how using two loans to finance a solar project can minimize the after-tax cashflow requirements of investing in solar, Popp explained.

 “If you have a REAP grant and income tax credits paying for 55 percent of your project costs, you can break even at 3 cents per kilowatt hour even at the higher interest rates” Popp said.

That’s about 7 cents a kilowatt hour of risk wiggle room. Across 35 farms analyzed, Dr. Popp’s tool estimated average variable electricity rates of 10 cents per kilowatt hour in 2022. If a solar investor can lock in net-metering, cashflows are more attractive than future, avoided cost rates, Popp said.

‘Legacy net metering’

Last year, the Arkansas state legislature passed the Cost-Shifting Prevention Act of 2023. It overhauled the net metering policy in Arkansas and set a deadline of Sept. 30 to apply for “legacy net metering” status and to be “grandfathered” into the rate structure in effect before Dec. 31, 2022. If the customer qualifies, their rates would be grandfathered through June 1, 2040.

Legacy net metering allows a utility customer with an electricity generating system to receive credit from their utility provider if the customer produces excess energy. Any net excess generation credits older than 24 months can be sold back to the electric utility at the utility’s “avoided cost,” if it is at least $100, according to the Arkansas Public Service Commission’s latest Net-Metering Rules.

All costs need to be paid for constructing facilities necessary to connect a net metering facility by Sept. 30, the new rules state. The facilities could also include those that produce energy from wind, water and geothermal.

Those who do not apply for legacy net metering will fall under the next compensation policy called “net energy billing,” which will allow sale of power to the utility grid, but the utilities will no longer be mandated to reimburse at the rates they charge.

Another critical component of solar investment analysis is application for the U.S. Department of Agriculture’s REAP program, said Yi Liang, Associate Professor with the Cooperative Extension Service. The REAP program offers loans and grants for rural small businesses and agricultural producers. The application deadlines for the REAP programs are March 31, June 30 and Sept. 30. However, Liang noted that it takes between three and six months to score and rank the REAP applications.

“For anyone to meet the state’s Sept. 30 deadline for legacy net metering, the March 31 REAP grant deadline would be the one to shoot for,” Liang said.

Two loans better than one

Popp revisited the analysis tool with Liang and other colleagues to assess the finance and risk management considerations of investing in solar panels for agricultural uses.

A portion of their report, currently under review with the USDA Economic Research Service, explains how economic modeling suggests that two loans were superior to a single 10- or 20-year loan.

Using the updated Poultry Solar Analysis tool, Popp noted the break-even cost of electricity is lower with two loans than one because “better cashflow matching leads to more timely loan repayment, which saves on interest expenses.”

Running the same model for 35 farms with different electricity rate structures, Popp and his team found that choosing 10-year or 20-year equipment loans — with or without a secondary income tax credit loan repaid upon income tax realization — revealed a best-case scenario with two loans. The 10-year equipment loans optimally sized in conjunction with either a one-year or five-year income tax credit loan led to the highest “net present value” of 30-year, after-tax cashflows.

TIMELY UPDATE — Michael Popp, professor of agricultural economics and agribusiness, explains the Poultry Solar Analysis tool. (U of A System Division of Agriculture photo)

“That financing arrangement also led to the lowest break-even cost of electricity for solar investors,” Popp said. “At the same time, that financing solution led to much fewer incidences of having larger annual cash outflows with solar investment than not investing in solar.”

To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu. Follow on Twitter at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on Twitter at @AgInArk. To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu.

EIA: Solar to lead U.S. electricity generation growth through 2025

by Jeff Della Rosa (JDellaRosa@nwabj.com)

Solar electric generation is expected to account for 7% of total U.S. electricity generation in 2025, up from 4% in 2023, according to the U.S. Energy Information Administration (EIA).

On Tuesday (Jan. 9), the EIA released its January Short-Term Energy Outlook that shows almost 80 gigawatts of solar power will start operating in the next two years, increasing U.S. solar generating capacity by 84% and making solar the leading source of growth in U.S. electricity generation through 2025.

“We are experiencing a significant shift in U.S. electric generation, as solar generation grows rapidly, taking market share from coal and tempering the growth in natural gas usage,” said EIA Administrator Joe DeCarolis. “Coal and natural gas remain important to the U.S. electric grid, even as variable renewable resources such as solar and wind grow.”

EIA: Solar to lead U.S. electricity generation growth through 2025

4 US solar manufacturers join American Made initiative

by Paul Gatling (pgatling@nwabj.com)

Little Rock-based solar power developer Scenic Hill Solar announced Thursday (Dec. 14) that four U.S-based solar equipment manufacturers have joined an initiative to encourage the manufacturing of American-made array components.

The American Made, Arkansas Built initiative now includes Array Technologies, Shoals Technologies Group, OMCO Solar and APA Solar Racking. In 2022, Scenic Hill Solar launched the initiative with First Solar, Yaskawa Solectria Solar, Nextracker, Zekelman Industries and KORE Power Inc.

“With our nine premier partners in the American Made, Arkansas Built Initiative, we are pushing for a restoration of American leadership in renewable energy,” said Bill Halter, CEO of Scenic Hill Solar. “The solar industry began in the United States, but then manufacturing shifted overseas. Our partnership with these leading American companies will help bring the industry back home to America by focusing on innovation and collaboration among the premier American manufacturers of solar equipment and batteries.

4 US solar manufacturers join American Made initiative

Producers Rice Mill to erect largest solar storage microgrid in the state

by George Jared (gjared@talkbusiness.net)

Producers Rice Mill will have a new solar storage microgrid developed by Scenic Hill Solar and it will be a record-breaking.

The groups announced the project on Tuesday (March 21), but a timetable to complete the microgrid and price tag were not released.

The Producers’ project is the largest commercial and industrial solar project in Arkansas history and one of the largest microgrid projects in the U.S., the companies said. Since 1943, the Producers Rice Mill cooperative’s members – now including more than 2,000 U.S. farmers — have relied on the Producers’ facility in Stuttgart, to process, store, and ship their harvest around the world. The facility mills more than 40 million bushels of rice every year.

https://talkbusiness.net/2023/03/producers-rice-mill-to-erect-largest-solar-storage-microgrid-in-the-state/

Environmental, advanced energy execs talk solar, regulatory issues

by Jeff Della Rosa (JDellaRosa@nwabj.com)

Conservation and advanced energy executives recently highlighted industry-related concerns, economic drivers and focus areas during the 7th annual Arkansas Environmental Policy Summit in Little Rock, hosted by Audubon Delta and multiple Arkansas environmental organizations.

Ted Thomas, former chairman of the Arkansas Public Service Commission, spoke about the high price of natural gas and how solar can be an economic driver. He cited Entergy Arkansas’ 250-megawatt solar farm that’s expected to provide electricity for the U.S. Steel Corp. plant in Mississippi County.

Thomas, who recently established a consulting company and started to collaborate with utility software firm Recurve, also noted the challenges the commission has faced to establish policies when some electric utilities and cooperatives pack the commission’s agenda with items that take precedence. As a result, the decisions on whether to approve new policies go to the back burner, such as demand response.

https://talkbusiness.net/2022/11/environmental-advanced-energy-execs-talk-solar-regulatory-issues/