Economic Factors

Aerial view of a herd of cows grazing near a solar power plant. Photo Credit: Dzmitry Palubiatka

One new incentive for agricultural producers is USDA’s successful Rural Energy for America Program (REAP), which offers $50 million annually to help farmers incorporate renewable energy and energy efficiency into their farming operations. New York’s Governor Cuomo is investing $1.5 billion in renewable energy projects, and the New York State Energy Plan suggests that by 2030 solar may provide up to 27% of the State’s electricity. Agricultural lands often represent open space attractive for solar development.

Solar projects could potentially generate needed additional revenue for farm and ranch families through increasing landowners’ buying power from new income sources and creating additional employment opportunities in rural communities for landowners from jobs affiliated with solar energy development. Developing solar installations on farm and ranch land in a sustainable manner will contribute to both the environmental and economic sustainability of the U.S. agricultural and food system.

Current net farm income were expected to increase but according to USDA’s Economic Research Service, it has still not recovered to the highs of 2011-13 due to higher crop prices from both increased corn demand and exports. Farmers are also currently experiencing pressures from on-going trade disputes, recent weather events, and effects from the coronavirus pandemic that could depress net farm income. With lower net farm incomes, landowners leasing farmland are seeing lower rental rates. This all adds pressure on landowners to take advantage of benefits from long-term solar energy leasing.

Herd of sheep with one sheep looking into the camera, with a solar panel in the background. Photo Credit: thka