Purdue University released the results of its Ag Barometer, a monthly survey of farmers in the U.S., and found that farmers are adopting solar leases at double the rate of carbon sequestration contracts.
Farmers are continuing to turn to solar as a source of income, with financial fears brewing in the agricultural sector, said Purdue. The Farm Financial Performance Index has fallen 24% in just one month, as farmers are expecting their input costs to rise much more rapidly in the year ahead than they have over the last decade.
Increasingly, solar is being considered and adopted by farmers to balance the books. Of the 400 surveyed farmers, who run operations larger than $500,000 in annual revenue, nearly one-third are aware of solar leasing opportunities for their farmland, and 29% have engaged in discussions with solar companies about leasing their land.
One in ten of those farmers who engaged in talks moved forward with solar, with 2.9% of total respondents saying they currently have solar lease contracts. This compares to only about one percent of farmers engaged in carbon sequestration plans.
Solar leases currently are offering some financial relief, but the surveyed farmers have witnessed a wide range of per-acre pricing for their contracts. A third of the projects offered less than $500 per acre annually, and about 27% percent said their solar contract offering ran at $1000 per acre or more, with the rest falling in between.
These prices dwarf the $20 per acre value of carbon sequestration plans. Though in carbon sequestration plans, the farmer will still have utility of the cropland and the value therein, they may have to change their practices to achieve the contract’s sequestration goals. Most solar fields do not support farming in the same space, but a rising trend of agrivoltaics may change that.
Carbon sequestration plans will need to make a stronger business case to farmers already feeling pain if wider adoption is to be seen. Such carbon plans are not necessarily in a zero-sum game with solar projects, so creative ideas on this front could generate new value chains.