Solar has become increasingly popular in recent years. But is it a good fit for agriculture? At Sunworks, we pride ourselves on being forthright with potential customers, so we’ll honestly answer this question with, “It depends.” While solar is a great fit for many agriculture operations, here are a few things to know as you explore this option.
Why solar and ag can be a great match
Going solar has the potential to bring financial and operational benefits to your organization. From tax incentives to market differentiation, there are many ways solar can be a positive business decision.
One of the main general incentives for going solar is to reduce uncertainty around rising energy costs. This applies to all kinds of domestic and commercial circumstances – and agriculture is no exception.
There are additional incentives for agricultural operations that are considering switching, in part or in full, to solar energy. Since the late 90s, The Carl Moyer Memorial Air Quality Standards Attainment Program has offered funding to help reduce air pollution. The Moyer Program, in association with California’s Clean Air Resources Board, has granted almost $1 billion to owners of toxic emission-producing equipment (such as engines) and other sources of air pollution.
Coastal authorities between Santa Barbara County and Santa Cruz County established Central Coast Community Energy (CCCE) to help keep renewable electricity rates affordable and fair, and stimulate the clean energy economy. One of their initiatives – The Ag Electrification Program – provides rebates to CCCE customers who replace fossil fuel-run agricultural equipment with electric equipment. Technologies eligible for the program include utility vehicles, irrigation pumps, and other agricultural tools.
The Ag Electrification Program is helping small and medium-sized farms throughout the central coast. And because there are no investors or shareholders, revenue generated by the program remains local.
How sustainable energy fosters positive public perceptions
Despite the clear marketing and PR benefits for businesses switching to sustainable energy, many companies are slow to capitalize. A report from Wharton indicates a disconnect between consumers and retail executives with regard to sustainability as a factor in purchasing decisions.
The survey showed that consumers’ willingness to pay more for sustainable products increased by as much as 42% over two years. It found that 90% of Gen X consumers said they would be willing to spend an extra 10% or more for sustainable products. Unsurprisingly, Gen Z is particularly invested in driving sustainable purchasing.
And yet only half of senior retail executives surveyed believed that sustainability was an important consideration for consumers. Close to 100% believed that brand recognition was more important to consumers than sustainability, while only 56% of consumers prioritized their purchasing decisions based on brand name.
This stark mismatch represents a major opportunity for businesses to enhance their public reputation while increasing retention rates and boosting profits.
Determining solar suitability
Renewable energy sources like solar are not appropriate for every agricultural enterprise. Farms with little to no roof space, or with roof space that is not conducive to solar, will have to make a cost-benefit analysis of using ground mounts. Dual-use agrivoltaics provide a good solution for certain crops but are by no means a panacea, so it’s important to weigh the profitability of existing farmland against the potential savings offered by a solar installation.
Land that is already highly profitable and has low energy needs may not be a good contender for solar. The upfront investment can be substantial, so it’s important to look at how long it will take before that initial investment begins paying off. Backup power systems will increase the cost of the initial investment. The need for sunlight may also narrow installation options.
For agricultural operations that are well-suited to solar power, the benefits can be enormous. Aside from the investment in long-term sustainability, tax benefits, increased profitability, and a reduction in operating costs, a solar installation can increase the overall value of land. While it’s not suitable for every farm, those that can benefit from going solar stand to make a solid investment – both in the future of their business and the future of the environment.