Lentis/Expansion of Solar Farms in the Rural United States

Solar energy is poised to play a large role in the transition to a zero-emission electricity sector. Although low emissions used to be the sole benefit of installing new solar capacity, technological advances have made solar projects economical as well. Between new technology and policy, the amount of solar integration is expected to continue. There are many differences between solar and traditional fossil fuels, but one of the most significant is the size of the power plant. Solar farms on average require 43.5 acres / MW, whereas coal plants require 12.21 and natural gas plants require 12.41. If solar is to substantially replace these sources of energy, much more land will be repurposed as solar farms in the future. Most of these farms are constructed in rural areas, where land is cheapest and most abundant. Even though the residents of these areas may not have asked for a solar farm in their vicinity, they are most closely related to the construction, maintenance, and general interaction with solar farms. Understanding the effects that solar farms have on these communities and, perhaps more importantly, how the communities perceive these effects is necessary as rural land continues to turn into solar farms.

Economic Effects

Job Creation

The solar industry has had a profound impact on the US economy, employing 349,725 people as of May 2018. This includes all people involved in the manufacture, distribution, and installation of solar technology as well as those providing professional services (i.e. R&D, sales, project development). Employment declined by nearly 10% from 2017 (373,807) which can be attributed to a similar decline in installations. This speaks to the volatility of the solar job market, the majority of which revolves around the construction and installation of solar projects rather than their long-term operation and maintenance.

Despite this immense job creation, few occupations are held by residents of the rural communities where the majority of projects will be located. Installation and construction workers travel from site to site while professionals tend to live and work in urban areas, leaving only the handful of jobs required to maintain solar facilities for local residents.

Property Tax Revenue

Solar farms can increase appraised land values by 1,000-10,000%. Even with substantial tax credits and incentives to allow solar companies to operate profitably, solar farms bring in a tremendous amount of new revenue for local governments.

In North Carolina, where solar companies enjoy an 80% tax abatement, property tax revenues have increased by over $20,000 per solar farm. Incentive programs are designed to help solar companies break into the firmly-established energy market, but are structured on limited timeframes with expiration dates. When solar power has developed enough to function in a free market without subsidization, their property tax contributions will increase up to five-fold depending on the local legislature.

Solar farm siting is driven by the cost of land which leads to solar farms being installed in the poorest counties of a given region. In this way, solar farms are adding a significant source of revenue to the localities that stand to gain the most.

Land Leasing

Electricity from solar farms is becoming the new cash crop of many traditionally agricultural states. Solar farms can often create more revenue from a plot of land than agriculture. This has led to an increase in land lease rates, and thus landowner incomes, but has also inadvertently harmed tenant farmers who now find themselves struggling to turn profits. Since the agricultural industry is an economy of scale, the displacement of farmland by solar projects could have a domino effect on the entire agricultural infrastructure from fertilizer distributors to food processors and shippers Agriculture plays a vital economic role in many states where solar is rapidly expanding (e.g. California, North Carolina, Texas) so governments responsible for zoning and permitting must take care to ensure that the conversion of farmland to solar farms does not overly stress the local agricultural system.

Government Programs

Rural Electrification Act

Government involvement in the rural electricity sector has a long history in the United States. Federal government subsidies began with the Rural Electrification Act (REA) – a 1930s “New Deal” era reform. At the time, private electric utilities would not expand to rural areas because it was not economical. This approach provided reliable electricity access to only about 10% of rural residents and farmers. The Roosevelt administration saw this as a bottleneck on individual and societal growth. The REA created and subsidized co-ops, which are member-owned electric service providers that continue to provide electricity access to rural areas today. The REA became part of the Rural Utilities Service Act in 1994, and its legacy demonstrates the willingness of the federal government to encourage access to electricity in rural areas.

Rural Energy for America Program (REAP)

Many federal policies exist today that aim to promote solar power in rural areas. The Renewable Energy for America Program (REAP) provides grants for renewable energy and energy efficiency projects for agricultural producers and rural small businesses. The program can provide grants for up to 25% of project costs or loans for up to 75% of project costs and has a 2018 budget of approximately $800 million. Both energy efficiency and renewable energy projects have large upfront capital investments but close to no variable costs throughout their lifespan. If the project can be financed, it can lower electricity costs for customer and provider alike. The reduction of electricity costs is one of the primary rationale given by the US Department of Agriculture (USDA), which administers the program.

Solar Powering America by Recognizing Communities (SPARC)

Another notable federal program is Solar Powering America by Recognizing Communities (SPARC). Solar energy development, especially for large-scale farms, is heavily dependent on local government policy. SPARC gives suggestions to local government zoning and construction policy on encouraging solar expansion and recognizes communities that successfully reduce the “soft costs” of permitting applications.

Zoning and Permitting Policy

As SPARC indicates, local government policy and standards have the power to inhibit or support the expansion of solar farms. A significant portion of the costs of a solar farm often goes to “soft costs,” or costs that are not directly related to construction and are often incurred before construction begins. Solar developers must receive permits from a number of local and state agencies to ensure that their site will meet health, safety, and environmental regulations. Although necessary, the process of permitting can be cumbersome and costly for solar farms. There are often no land-use or zoning laws regarding solar farms, which can slow or inhibit their construction. In these cases, developers are forced to follow complicated permitting laws that do not directly pertain to their project – if they can obtain permits at all.

Implementation of solar-specific zoning laws gives more control to local government and can lower costs for developers. These zoning laws define solar farms and outline what is necessary for them to develop within the town’s limits. Walton County, GA, for example, developed a new land-use category for solar farms: agribusiness. Developing this policy quickly enabled the construction of a proposed 30MW solar farm in Walton, where “people see solar farms as not a bad neighbor to have,” according to County Planning Director Mike Martin.

Community Relations / Public Perception

Polling

A majority of the United States would like to see the expansion of renewable energy to contribute to the mitigation of negative environmental impacts caused by carbon-based energy sources. According to a Gallup poll, a company dedicated to helping leaders and organizations solve problems, 73% of people think the U.S. should emphasize the development of alternative energy sources and 79% believe more emphasis should be placed on producing domestic energy from solar specifically. Solar farms will be most controversial in the rural United States, where most of the development will take place. Rural residents are primarily concerned with the impacts solar farms could have on their land. The Nebraska Rural Poll, the largest annual poll for Nebraskans' perceptions on quality of life and policy issues, found 91% of Nebraskans agreed more should be done to develop alternative energy sources, yet 57% agreed that the environment should be protected even if it requires limiting energy supplies. This may demonstrate concerns about solar farms negatively impacting land that was traditionally farmed. Other factors related to opinions on solar development include the belief of developers receiving too many incentives, trust in project developers, and adverse effects on property values.

Micro-Climate Change

It is argued that maintaining solar panels can damage future land productivity and inhibit traditional farming. Herbicides, mulches, rock, or plastic used to maintain weeds that intercept solar radiation could be damaging. Solar farms can also create micro-climate changes under the panels. Lancaster University found areas under the panels up to 5.2°C cooler than open areas, which can reduce the diurnal variation in temperature and humidity. Photosynthesis and net ecosystem exchange are also measurably lower under the panels There is sufficient evidence that solar farms can impact the surrounding environment, but farmers are researching how to utilize land under solar panels, such as planting shade-friendly crops or grazing sheep, to counter the costs from any micro-climate change.

Decommissioning

Landowners are worried about enduring the high costs of decommissioning solar farms. The solar panels expected lifespan is about 20 years, and some leases hold the property owners responsible for properly recycling, which could be very difficult and expensive. Given the bullish state of the solar industry, fueled by massive government subsidization, it is quite likely that companies could go bankrupt within the lifespan of a project if there is a downturn in solar which could void installers of any previously agreed-upon obligation to oversee decommissioning.

Alternative Development

Government officials of rural areas where the solar farms are operated believe their development on the open land is better than an alternative: housing and businesses. Union County, North Carolina is home to one of the largest solar farms in the state, with 684,000 solar panels. Rick Becker, the mayor of a nearby town called Mineral Springs, likes seeing the productive use of the land in place of roughly 400 houses. He notes that it can still function like its neighboring land with livestock grazing on the grass under and around the panels.

Conclusions

Solar energy has been growing at an exponential rate over the past two decades, and large-scale solar installations require three times as much land as conventional power plants. This has made rural America a popular destination for such projects. These solar farms affect the economy through employment opportunities, leasing revenues, and property taxes. Environmental impacts include habitat destruction, micro-climate changes, and diminishing land productivity. Generally, the public supports solar energy expansion, however, rural Americans are often skeptical due to the potential economic and environmental ramifications. While the severity of these repercussions is unclear, the perception that solar farms are unwanted neighbors among rural residents is very real. Solar companies and local governments tasked with permitting solar projects must consider the sentiments of local residents while planning projects in order to keep the overall public perception of solar energy positive. Methods to counteract potential negative impacts include shade-friendly crops, grazing animals, building solar farms on properties that already contain unappealing structures, or simply comparing solar farms to other industrial developments.