By Blaine Davis, Contributing Editor
Returning from two back-to-back road trips to the “Third Coast,” I discovered yet another facet of the Lone Star State: its proclivity for solar farms. As I have often remarked about an extensive field of solar collectors adjacent to Anson, Texas, just north of Abilene, I just discovered an even larger installation outside of the small town of Paint Rock in Concha County of west central Texas. Paint Rock, a community of a few hundred has become a favorite stop for me, not for its “green” energy initiative, but the newly restored stone building housing the Paint Rock Coffee Company. Flanking the north side of the courthouse square, they feature several varieties of coffee, lattes, just plain black for me, and then there are the baked goods. To the south of the courthouse is 3 Nail Ironware, a blacksmithing operation featuring hand-forged carbon steel kitchenware, of which one of their campfire comals is now on my Christmas list.
As I previously wrote, the Anson solar installation displaced what appears to be arable, level farm ground, causing me to shudder as I sped past on Highway 83. But with a recent article from Tyne Morgan seen on the AgWeb internet site, companies are offering $1,000 or so per acre cash lease for such installations, I might just be wavering. Without my calculator or a pencil in hand, raising $5.00 per bushel corn with a yield of 200 bushels, I can cipher this to be nothing more than a “wash.” Now, adding in the input costs of fertilizer, herbicides, insecticides, irrigation gas, planting and harvesting, it doesn’t take an advanced degree to realize this is not sustainable. Combining all of these factors it’s in no wonder why many farmers are considering parking their tractors and watching the sun shine. Further south on Highway 83, the Paint Rock installation is placed on approximately 850 acres that would be even questionable for grazing purposes and undoubtably not warranting the higher cash leases, yet does provide acclaimed power to the equivalent needs of 11,000 residences, local economy, jobs, a tax-base for the local governing agencies and yearly income for the landowners.
The push to add solar energy is gaining traction across the United States as the Biden administration has a goal of a net-zero electric grid by 2035. Michael Langemeier, an agricultural economist with Purdue University says, “The Ag Economy Barometer is revealing the sticker shock of solar leasing rates.” The survey of 400 agricultural producers is now asking farmers how many had actively engaged in discussions with any companies about leasing farmland for solar installation, and the response was surprising. “It was 19 percent who said they have engaged in discussions, and so think about that – that’s a huge percentage of the survey respondents have actually engaged in someone about leases. That doesn’t mean they’ve signed a thing, but that means that they’ve actually been approached,” says Langemeier. A bigger surprise from the survey was the high rates solar companies offered; 58 percent of respondents said the rates were over $1,000 per acre, with 30 percent saying they were offered ranges from $1,000 to $1,200 and 28 percent say rates were more than $1,200 per acre.As farmers and landowners are offered high leasing rates for solar installation,
Langemeier further adds, “That’s going to put upward pressure on cash rents, and it’s probably going to put upward pressure on land values, given that it’s local.”
As farmers and landowners are offered high leasing rates for solar installation, Langemeier further adds, “That’s going to put upward pressure on cash rents, and it’s probably going to put upward pressure on land values, given that it’s local. And so it probably impacts a fairly local area, depending on whether your area has solar leasing or not, but it certainly has pretty wide ramifications on what’s going on in agriculture.” David Muth of Peoples Company Capital markets, an investment platform, adds, “That’s a high rate even for the eastern Corn Belt where our cash rates are much higher, but think about what even a $750 rate would mean in the Great Plains where the cash rents are much, much lower. And so what you’re having here is these solar lease rates that are multiples of the current cash rent rates.” For comparison, in checking in with a friend that owns Iowa farmland the cash rent rate ranges from $275 to $325 per acre. Closer to home, my family’s farm of 640 acres of diversified crop production of wheat and corn could realize an increased profit from conversion to a solar installation, but I would say, “My need for electricity to power my toaster would be moot without bread baked from America’s wheat.”
With the Biden administration’s net-zero electric grid agenda by 2035 of pushing solar installations, land is in high demand, thus farmland becomes the sacrifice. The Nature Portfolio places the total global food demand to increase 35 to 56 percent from 2010 to 2050. With world population growth and humanity’s need for sustenance, this removal of agricultural acres from production seems draconian and short-sighted.
