Less than 3% of agricultural land could power the Midwest – pv warehouse USA

May 29, 2024 John Fitzgerald Weaver

The Center for Rural Affairs (CFRA) has published an analysis which states that Screening Solar Power: Land Use Concerns on Prime Farmingwhich discussed the potential expansion of solar energy by 2050 on farmland in the Midwest.

The report highlighted that solar projects created 147,000 rural jobs and provided significant land lease payments to farm owners, with Iowa farm owners receiving $73.4 million in 2022 alone.

According to CFRA, the U.S. Department of Energy’s Solar Futures study estimates that 1,600 GW of solar power will be needed by 2050 to meet 40-45% of electricity demand, with 210-420 GW expected to be installed in the Midwest. The analysis further notes that if all of the projected solar capacity in the Midwest were installed solely on agricultural land, totaling 114.8 million acres, it “would occupy only 1.45-2.90%” of agricultural land.

Moreover, much of the land is not considered prime agricultural land nor is it currently used for agriculture at all.

Challenges

CRFA highlights Iowa, which stands out not only for its extensive ethanol production but also for its significant resistance to solar energy development. Changing the use of ethanol producing areas for solar energy theoretically, it could power the entire United States, including all electric vehicles and heating systems.

The analysis identified two technical land designations, “primary agricultural land” and “corn suitability rating” (CSR), as potential barriers to the placement of solar PV installations. These designations may be too restrictive under current policies.

In Minnesota, supporters say the prime farmland classification, established in the 1980s to limit the spread of coal and nuclear facilities, is outdated. Unlike these facilities, photovoltaic installations do not permanently alter the land and can be decommissioned, allowing the land to return to its original agricultural use after being set aside, potentially improving its condition for future agricultural use.

In Iowa, proposed legislation to limit solar installations to land with a CSR of 65 or less was not adopted. If passed, it would be illegal to place solar installations on 65% of the state’s agricultural land, with much of the remaining 35% considered less than viable for solar energy due to various land characteristics.

CFRA’s efforts to address land use issues can be implemented as part of an effective comprehensive educational strategy. Stakeholders need to understand the significant income potential of solar installations combined with the risks that local anti-photovoltaic regulations pose to the financial security of family farms.

Financial benchmarks and community impact

Taking into account attractive photovoltaic lease rates, devoting even a small percentage of agricultural land to solar energy can significantly improve the financial stability of the farm. For example, in 2023, the U.S. Department of Agriculture’s National Agricultural Statistics Service reported that Average cash rent for non-irrigated cropland $269 per acre in Iowa AND $259 in Illinois. High-quality farmland can fetch rents in excess of $400 per acre, while the least profitable farmland fetches as little as $58 per acre.

Let’s compare these numbers to the typical solar panel lease rate in these states, which ranges from $750 per acre for hundreds of acres to as much as $3,000 per acre for up to 20 acres.

Community solar programs, which typically lease fewer acres, offer higher rates, ranging from $1,200 to more than $5,000 per acre, depending on the state. For example, a 400-acre farmer who converts his least productive 15 acres – which is 3.75% of his land – into a 2 MWac community solar farm could see his annual profits increase to $45,000. This amount is approximately 11.5 times the previous earnings of $3,885 on these acres, based on an average cash rent of $259 per acre in Illinois.

Even at its lowest point, solar leasing would at least double cash rents on the most lucrative farmland and could provide a dramatic increase on less profitable land. For example, in Johnson County, Illinois, a land lease at $58 per acre can result in a 13-fold increase in income with a solar panel lease rate of $750 per acre.

To reach 1,600 GW of solar capacity in the U.S., just over 10 million acres are needed, including 1.2 to 2.5 million acres of the Midwest’s nearly 700 million total acres.

With 10,300,000 acres available nationwide for solar installations, projected land lease revenues available to owners will range from $7.725 billion annually to an impressive $30.9 billion, with billions of those lease revenues available in the Midwest.

To further harmonize the development of photovoltaics with agricultural land use, several strategies can be implemented: