One in five U.S. farmers has actively discussed leasing land for a solar project — twice as many as in February, according to a survey released by Purdue University on Tuesday. Developers offered high payments in many cases and, overall, 6 percent of landowners have signed a solar energy lease, according to the monthly Ag Economy Barometer.
“Interest in leasing farmland for solar energy production continues to rise,” said James Mintert and Michael Langemeier, the Purdue agricultural economists who oversee the barometer. Twenty percent of farmers and ranchers taking part in a telephone survey in mid-May said they have discussed leasing farmland for solar production within the past six months. In February, 10 percent reported such discussions.
“Combining results from both the April and May barometer surveys, approximately 30 percent of respondents who have discussed leasing with a company have signed a solar energy lease on farmland they control,” wrote Mintert and Langemeier. Thirty percent of the 20 percent of farmers who have considered a lease equals 6 percent of all farmers.
Solar and wind farms occupy a tiny part of rural America despite the large amounts of controversy they generate. The USDA says the projects had a footprint of 423,974 acres in 2020, or 0.05 percent of the 870 million acres of farmland in the nation. Land in solar farms was 336,000 acres, it said. In a report last month, the USDA said local governments have imposed at least 2,600 restrictions on wind and solar projects, with local opposition seeming to rise with the size of the project.
Among farmers who investigated solar leases, 55 percent said they were offered at least $1,000 an acre annually in rent; 27 percent said they were offered $1,250 an acre or more. A small portion of farmers say energy production is becoming a factor in pushing up land values locally.
Solar farms are most common on the East and West coasts, and wind farms are found most often in the Plains and Midwest. The two forms of renewable energy provided 10.7 percent of U.S. electrical generation in 2020; 8.4 percent from wind and 2.3 percent from solar.
The 2022 climate, health care, and tax law extended investment tax credits for wind and solar projects, and included $40 billion in Energy Department loan guarantees for clean energy. The USDA received funding to help rural electric cooperatives finance renewable energy projects.
A gauge of the health of the agricultural economy, the Ag Economy Barometer had a May reading of 108, compared to 104 a year ago and an increase of nine points from April. “Increases in crop prices provided producers with a somewhat more optimistic financial outlook, which helped boost producer sentiment,” said Purdue.
For the Ag Barometer, Purdue interviews operators with production worth at least $500,000 a year. According to USDA data, 7.4 percent of U.S. farms have annual sales of $500,000 or more. The survey has a margin of error of plus or minus 5 percent. The latest survey was conducted from May 13-17.
The Ag Economy Barometer is available here.