Solar farms are often located in rural areas due to their relatively large footprint. For instance, a typical five megawatt solar farm requires 25 acres or more. The rapid expansion of solar farms in rural areas has led to conflict as stakeholders in rural counties raise concerns about the loss of farmland to solar development, as well as the potential effects of solar installations on the productivity of the land once the farm is converted back to agricultural service at the end of the solar farm’s life. Another concern cited by opponents to solar development is that solar farms may negatively impact the value of land nearby. In this research, we test this last assertion and examine how solar development impacts nearby agricultural land values in North Carolina, which ranks in the top five nationally in terms of installed solar farm capacity.
Our results show that utility-scale solar farms have no direct impacts on nearby agricultural land values (positive or negative). However, our results do suggest that solar farm construction may indirectly affect nearby agricultural land values by creating a signal effect of the land’s suitability for future solar development. Specifically, the proximity of agricultural land to electric transmission lines is positively valued only after a solar farm is constructed near an agricultural parcel. This finding is also of interest because siting of transmission lines also faces significant opposition. Our results suggest one instance where proximity to transmission infrastructure may result in positive monetary benefits for landowners.
From the abstract:
Property value models are used to examine how utility-scale, ground-mount solar farms impact nearby agricultural land values. Results indicate that solar farms do not have direct positive or negative spillover effects on nearby agricultural land values. However, results also suggest that solar farm construction may indirectly affect agricultural land values by signaling the land’s suitability for future solar development. Specifically, results indicate that proximity of agricultural land to electric transmission lines may be positively valued after a solar farm is constructed nearby.