Sheep, sheep, sheep, sheep.
This is what Amanda Stoffels' life as a farmer
in 2023 looks like.
Raising and grazing sheep among a vast field of
solar panels.
It's a new, modern approach to agriculture.
Her growing flock helps to maintain vegetation at Elm
Branch Solar Farm, about an hour south of Dallas,
Texas. The farm is operated by Lightsource
BP, a solar energy developer that's 50% owned
by British oil major BP.
Lightsource is investing in solar developments like
this, which combine energy production with
agricultural activities like sheep grazing,
beekeeping and hopefully someday, crop growing.
These are 6.5oz jars, but they hold 8 ounces of
honey. And so it says on our solar farm, honey, we
just packaged this up just a couple of days ago.
This is all part of an emerging industry called
Agrivoltaics, that oil giants like BP and Shell
are getting into, as they seek to burnish their
green energy portfolios and enter into new
markets.
There are state policies and goals that are driving
a lot of development of utility scale solar
projects all across the nation.
These solar projects need to find somewhere to build
these projects, and in many ways, they are
finding very willing and eager owners
with many agricultural land owners and farmers.
Landowners like Stoffels and Koranek can earn a
guaranteed monthly income by leasing their farmland
to solar developers like Lightsource.
In this case, Lightsource also pays Stoffels for
sheep grazing, as her herd keeps the plants
around the panels in check and pays Koranek for
the honey that he produces at a nearby farm.
But actually growing crops on solar farms is
still a nascent industry, leading to some land use
concerns.
Solar takes some of the best land out of
production because they want land that's 1 to 4%
slope, and that's some of the best land there is.
Still, Agrivoltaic projects are as close to a
win win for farmers and solar developers as we
have right now. And as the solar industry rapidly
expands, experts say that this type of multi-use
land management will become more and more
common.
Meeting the nation's decarbonization goals is
going to involve building out a massive amount of
utility scale solar.
To decarbonize our energy grid, we need about 1000GW
of solar deployment, up from about 150GW today.
That doesn't require a ton of land, about 6
million acres of land, or, you know, only about a
third of a percent of all the land in the contiguous
United States.
Agricultural land comprises a whopping 44%
of the United States total land area, and often
has ideal characteristics for solar energy
production.
We are often looking for areas that are flat, areas
that do not have extensive trees and
vegetation, and that are located close to two
transmission and power lines.
But developers interest in farmland can cause tension
with farmers.
That even though the United States is a very
large country with a lot of available land, every
single square inch of land is either owned,
protected, or cherished by someone or many people.
And many people do not want to see that land
change or transform into something different from
what it has been, and for good reason.
Agrivoltaic projects could be a sort of compromise.
So Agrivoltaics really offers us that opportunity
to continue farming, continue doing these
agricultural activities, while also producing clean
electricity.
Today, the U.S.
has about 5 gigawatts of agrivoltaic projects
encompassing 35,000 acres across over 30 different
states. This only represents about 3% of the
country's entire installed solar capacity,
but it's growing.
For solar developers, I think the attraction of
Agrivoltaics is largely that
it helps with community acceptance and community
excitement about solar projects. Grazing land in
this country is about a third of all of our land
use, and if you're able to make that a dual use
with solar energy production, you have now
opened up a huge potential market space
that wasn't open before.
Lightsource BP operates a combined 615MW of sheep
grazing and solar power projects.
12% of the nation's entire Agrivoltaic
portfolio, and the company plans to add an
additional 1058MW worth of projects next year.
Through its 44% stake in solar developer Silicon
Ranch, Shell is also involved in the space.
Silicon Ranch operates 1300MW of agrivoltaic
projects, a full 26% of the nation's total, with
an additional 900MW planned over the next 2
years. American oil majors like Chevron and
Exxon haven't invested in Agrivoltaics, and while
there are other players in the domestic market,
they're generally much smaller scale than
Lightsource and Silicon Ranch.
Amanda Stoffels and her husband bought 100 acres
of farmland after they got married in 2005.
On top of their 9 to 5 jobs, they raised cattle
on their land for 15 years.
But when the opportunity arose to lease land to
Lightsource BP, the steady monthly payments
allowed Stoffels to quit her other job and farm
full-time. Now, the majority of her land is
devoted to solar, and she's acquired a growing
flock of 350 sheep.
Lightsource pays her to graze her sheep on the
solar farm, so that the surrounding vegetation
doesn't grow so high that it blocks the panels.
When people ask me, well, why do you do it?
It allows me to diversify our income and still be in
the agricultural business, and to be able
to utilize modern life and hold on
to an ancient practice of shepherding sheep.
There are a total of 10 families, including the
stoffels, that partner with Lightsource to graze
sheep amongst the panels, and 2 families that have
beekeeping operations on site.
Lexie Hain, director of Agrivoltaics and land
management at Lightsource, says that the
more direct benefits families like these see,
the easier it is to get solar projects approved
and what can be a notoriously difficult
permitting environment.
It's the farmer partners that.
Are the most important, those community members
who they might be your land owners, they might be
the neighbors. They might be the sheep farmer who
want that grazing opportunity.
But that's the real thing that helps a project
through the through permitting.
Tom Koranek is a landowner with a background in the
crop protection industry, which focuses on products
like herbicides and insecticides. He used to
grow crops on the 168 acres of land that he now
leases to Lightsource.
The solar farm has been a farm for a long time, over
100 years, and we purchased it about 12
years ago. And since then we've grown, rotated their
cotton, corn, sorghum, sunflowers and wheat.
And then in about 19, we leased it to the solar
farm.
Koranek couldn't disclose the specifics of his
contract with Lightsource, but said that
the money from the lease has allowed him to make
improvements on the remaining 172 acres that
he still operates.
So leasing it for solar, how much do you make per
year?
We sign an agreement not to discuss it.
It's more. It's more than row crop, I'll tell you
that.
As a part of his contract.
He also has a commitment to sell 1500 jars of honey
to Lightsource over a 3 year period, which the
company then gives away as promotional gifts.
We've increased our number of hives, and we will
continue to increase it to meet our commitment to
the solar company.
The Shell backed solar developer Silicon Ranch
has a different model.
While most solar developers lease their
land, Silicon Ranch buys it outright, often
purchasing degraded farmland that's no longer
in production. The company focuses on
regenerative land management, aiming to
improve soil quality by eliminating the use of
pesticides and herbicides and implementing more
intentional grazing methods, among other
things.
We from the beginning said, we want to tell
these communities that we are committed for the long
haul, and we're going to become members of these
communities in meaningful ways.
So our business model of owning real estate was a
function of how we viewed this asset class.
The company operates primarily in the southeast
in states like Tennessee, Georgia and Mississippi,
mostly buying land from large corporate
landholders like Lightsource.
Silicon Ranch pays local ranchers to graze sheep on
their solar farms.
But Farr says that they've actually run up
against a sheep shortage, leading the company to
invest in its own flock.
We started with a flock of about 600.
Today we've grown that flock to 2000, and if all
of our projections pan out, we think we'll have a
flock of over 30,000 sheep by 2030.
But among farmers, solar development is still often
viewed with a certain degree of skepticism, even
if agrivoltaic elements like sheep grazing and
pollinator habitats are involved.
It's kind of a touchy subject with a lot of
farmers because they want to maintain their property
and crop production, and they understand the need
to transition to maybe some more different kinds
of energy production.
But at the same time, their land has been in
production for over 100 years in their family, and
they and they're really tied to the land.
Though many crops like tomatoes and broccoli can
theoretically grow beneath solar panels, the
design of the solar array usually needs to be
altered, often by further elevating the panels to
allow taller crops to grow. But this is costly.
And while the economics can work for small-scale
projects in markets with strong solar incentives,
scaling up is a challenge.
But as we go beyond some of these specialty markets
and get into utility scale solar projects, the
design accommodations one might make to grow crops
underneath and in between solar panels are going to
be more expensive and have a bigger impact on
the overall economic viability of that that
solar project.
Macknick says that given existing costs and energy
markets, he doesn't see crop production happening
at a scale larger than five megawatts, which is
about 30 times smaller than the Lightsource farms
where Stoffels and Koranek work.
And when it comes to grazing, animals, besides,
sheep pose distinct challenges. Goats are
prone to chewing on the panels wires, while cows
and horses are so large that they can damage the
panels and are physically unable to graze beneath
them. But if you're a landowner, Koranek says
that you can definitely stand to benefit from
leasing.
It's a much better financial contribution
than growing crops.
Crops are very risky, so some years you may make a
good return and other years you may not.
And so this is a steady income year every year.
Farr says that for many families, selling the land
outright can be an even more attractive option
than a long-term lease, especially if that land is
no longer in production.
What we see a lot of is there has been a farm in
the family and the parents have either passed
or are done farming, and it's now in multiple
children's hands, and none of them agree on what
to do. Being able to sell the farm for a meaningful
amount of liquid capital on day one is a very
helpful for for families that can agree on how best
to monetize the asset they've inherited from
their parents.
But whether developers are leasing or buying,
everyone agrees that making the value
proposition clear to farmers is integral to
opening up new markets.
We are coming in to help support farmers, to
provide farmers another income stream, in finding
another way to make, you know, our agricultural
system more economically resilient.
So, I think Agrivoltaics has the opportunity to
allow solar projects to be built in these rural
areas that that traditionally have opposed
solar development.
As the U.S. pursues a massive buildout of
utility-scale solar, many are hoping to see more
state and federal incentives for agrivoltaic
projects.
So we've already seen some states take an interest in
agrivoltaics and offer some types of incentives
to support its development. We've seen,
for example, the SMART program in Massachusetts.
New Jersey has a has a program.
Other states like Oregon, California, other states
have been talking about legislation.
Right now, the Department of Energy is funding 6
Agrivoltaic projects with the goal of enabling the
deployment of over 1MW of projects focused on crop
production and over 10MW of projects focused on
grazing and pollinator habitats.
So the five gigawatts of systems that have been
installed today represent more than $5 billion of
investments, somewhere between $5 and $10 billion
of investment.
And we really see the potential for this market
kind of to have no bound.
Lightsource BP says that it's interested in getting
into crop production, hoping that one of its
sites can serve as a test project next year.
While Fara says that Silicon Ranch isn't
pursuing partnerships in this space yet, but
whatever route both companies and their
backers in the oil industry take when it
comes to agrivoltaic development, community
relationships and mutually beneficial land
use arrangements are going to be paramount to
building enough solar for the energy transition.
I think we need to do more than just provide
renewable electrons.
We need to have positive impacts on the ecosystems
where we operate. We need to bring value to the
communities where we site these solar arrays, or
we're going to lose our social license to operate.
And that's going to hurt our ability to meet some
of these very aggressive, renewable energy goals
that we have as a country.