Utility-scale solar expansion has little impact on U.S. crop prices

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Expanding utility-scale solar in the United States is unlikely to compromise food security, according to new research.

Researchers Jerome Dumortier and Rafael M. Almeida, from Indiana University, used a county-level agricultural model to explore how replacing cropland with utility-scale solar farms could affect land allocation, crop prices, agricultural production and farm revenue for major crops across the United States.

A baseline solar expansion scenario found that if 40% of future solar development is placed on cropland, a rate the research paper says is consistent with historical patterns, prices for maize, soybeans and wheat would increase by less than 5.6%. This figure is around a third compared to long-term estimates associated with biofuel production.

Under a large solar expansion scenario which considered the impact if 80% of new solar development occurs on cropland, price increases were calculated at 9.6% and 8.8% for maize and soybeans, increasing to 18.4% for wheat. The differentiation is explained by wheat being located in areas with higher solar potential, the research paper says.

The paper explains that the effects on commodity prices are moderate due to total area of land being substantially larger than the area required for solar farms. “Notably, the scenarios modeled in this analysis are also unlikely since they rely on high shares of cropland replacement to meet future PV deployment targets, and they do not consider siting on pasture, grassland, or marginal cropland,” it adds.

Dumortier told pv magazine that a central goal of the research was to replace speculation with data as debates over where to build solar projects become more heated.

“Much of the public debate around solar development on farmland has been driven by incomplete comparisons. Some estimates reported in the media are comparing the solar land requirements to states the size of New Jersey, Maryland, or even West Virginia, which naturally triggers worries. Although the comparison to states is correct, it needs to be put in relation to the total amount of land available,” Dumortier explained.

“The United States has an enormous agricultural land base, and total cropland area has been declining for decades as productivity gains allow farmers to produce more from less land. Those market effects are leading to a decline crop prices trend in the absence of shifts in either demand or supply.”

Dumortier also said that meeting rising electricity demand with domestically-produced energy, rather than remaining exposed to price swings that come with globally-traded fossil fuels and the geopolitical instability that impacts them, is a matter of both economic and national security interest. 

“Solar installations are domestic infrastructure and use fuel that is free and never subject to sanctions. Farmers understand this arithmetic well,” Dumortier said. “For generations, they have supported ethanol policy precisely because converting surplus crop production into fuel creates an additional source of domestic energy demand and supports crop prices in the process. Solar leasing offers a complementary opportunity on the supply side: land that market forces are already pulling out of crop production can generate stable, long-term lease income, diversifying farm revenue without compromising the broader agricultural system.

“The data should give policymakers and the public alike reason to take a more measured view of a debate that has, until now, had more heat than light,” he added.

The research findings are presented in the research paper “Limited impact of solar energy expansion on agricultural production and crop prices in the United States,” available in the journal Land Use Policy.

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