Scientists at Germany's Thünen Institute of Agricultural Technology proposed incorporating land preservation costs into the modeling of the levelized cost of energy (LCOE) for agrivoltaic projects
“Agrivoltaics can preserve agricultural land more effectively than standard ground‑mounted PV installations by enabling the simultaneous use of land for electricity generation and farming,” the research's lead author, Jonas Böhm, told pv magazine. “However, our analysis shows that this land‑preservation benefit comes at a substantial cost. These costs must be covered by either the investor, electricity customers, or society.”
He also emphasized that the agricultural output contributes only marginally to the overall economic performance of agrivoltaic systems, as electricity generation remains the dominant source of revenue.
“To quantify the agricultural return to land, we used historical data from the German Farm Accountancy Data Network, which provides long‑term, representative information on agricultural factor incomes in Germany. These data confirm that agricultural value creation is far too small to compensate for the substantially higher system costs of agrivoltaics,” he further explained.
Join us on March 5 for the Dual harvest, double trouble: Tackling EPC barriers in agrivoltaics design pv magazine session in English language at KEY – The Energy Transition Expo in Rimini. Experts will share insights on current agrivoltaic technologies, key design choices and the main barriers to standardized, scalable dual‑use projects in Europe and Italy, including region‑specific EPC issues. The modeling assumed that agrivoltaic systems must comply with German standards, which require that at least 85% of ground-level installations or 90% of high-mounted systems remain in agricultural production. For Capex, the researchers considered costs for solar modules, inverters, mounting systems, internal cabling, installation, fencing, transformers, and potentially a substation, along with expenses for land acquisition, biodiversity measures, approvals, structural engineering and environmental reports, project planning, and construction supervision. Opex calculations included monitoring, reporting, inspections, maintenance, remote control capabilities, security, insurance, commercial administration, legal advice, biodiversity conservation, grassland maintenance, cleaning, inverter repairs, and other miscellaneous costs. Image: Thünen Institute of Farm Economics, Land Use Policy, CC BY 4.0 Electricity yields were estimated using average global solar radiation data from the German Weather Service (DWD) for four soil climate zones between 2014 and 2023. The cost assessment also factored in agricultural income from land under the agrivoltaic systems, which was credited against total system costs. Using real cost data from German project developers, the team found that the levelized cost of electricity (LCOE) for agrivoltaic systems is 4% to 148% higher than for conventional ground-mounted PV plants, with applications like agrivoltaics for apple orchards showing the largest cost differences. “We also found that, when the additional costs of agrivoltaic systems are expressed per hectare of farmland preserved, the societal costs amount to €8,000–26,000 ($9,533–30,982) per hectare per year for medium-height systems and €42,000–75,000 per hectare per year for high-mounted structures,” Böhm said. “These figures are many times higher than the potential agricultural return from the same land.” “Our results therefore cast doubt on the cost-effectiveness of agrivoltaics as a land-management strategy and raise important questions about the justification for public subsidies,” he added. “While specific concepts, such as agrivoltaics for apple orchards, can create notable synergies—like replacing hail-protection nets—they also carry significantly higher system costs. The lowest additional costs occur in agrivoltaic systems requiring only minimal adjustments from the agricultural sector, such as grassland use or animal husbandry.” “Rather than broadly subsidizing today’s costly and non-competitive agrivoltaic systems, policy should prioritize supporting the testing and development of new concepts that have a realistic chance of becoming cost-competitive in the future,” he concluded. The research's findings are available in the study “Preserving agricultural land with agrivoltaic – But at what cost? An economic analysis of different agrivoltaic systems in Germany,” published in Land Use Policy. This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
I suspect the AgriPV community – particularly developers of Vertical AgriPV – will be aghast at this study. For its LCOE comparison of Ground-Mounted PV with the various types of AgriPV all costs are ‘standardised’ to August 2023, when most forms of AgriPV were little more than infants (very limited scale; not far past First-Of-A-Kind). Thereafter, based on the ‘standardised’ numbers of August 2023, the study happily uses present and future tense – the language of today and tomorrow – to shoot down AgriPV.
But I wonder, nearly 3 years on, if the LCOE numbers presented in this study bear much resemblance to the cost profiles of AgriPV projects being built or developed today. What do the costs of battery storage from August 2023 tell us about the costs of BESS in 2026?
Furthermore, the study specifically excludes consideration of ‘actual market revenues’ for the electricity produced by AgriPV, regardless of the fact that ‘revenue’ is our best measure of ‘value’. This is particularly hurtful to bifacial VerticalPV with an east/west orientation, which produces powerfully in the high-value morning and evening peaks and keeps on producing on winter days when Ground-Mounted PV is buried in snow.
The study is stating the obvious: crazy solar structures cost crazy money and are not cost efficient. I think the whole topic is framed wrongly. Instead of subsidizing non-economical solar power plants we should be building efficient AgriPV plants and subsidize the farming within them.