New report highlights major economic upside of agrivoltaics for farmers, developers & communities

A new analysis by the Institute for Energy Economics and Financial Analysis (IEEFA) underscores the substantial economic benefits of agrivoltaics, the practice of combining solar panels with active farming, for landowners, project developers, and rural communities.

Key Findings: Triple-win for stakeholders

The IEEFA report finds that agrivoltaics can deliver steady revenue streams to farmers without disrupting crop production. At the same time, solar developers can more easily secure permits and access land that would otherwise face opposition. Local economies also benefit via tax revenue and stronger ties to clean-energy investment.

Moreover, in water-stressed regions, agrivoltaics helps reduce water use and boost crop yields, which the report argues can lower operating costs and improve soil health.

IEEFA analyst Asher Salkin states, “Agrivoltaics demonstrates that agricultural production and solar development can be complementary rather than competing options for land use.”

Rising scale & rapid expansion

According to the report, agrivoltaics in the U.S. has grown significantly: installations have nearly doubled, expanding from 27,000 acres (4.5 GW capacity) in 2020 to more than 62,000 acres and 10 GW in 2024. That level of capacity is sufficient to power approximately 1.5 million homes.

The IEEFA report emphasizes that with favorable policies, agrivoltaics could become a robust driver of rural economic development and help meet the nation’s soaring electricity demand.

Challenges & policy considerations

While the benefits are clear, IEEFA also highlights challenges:

• Higher upfront costs: Agrivoltaic systems often require elevated panels or wider spacing, increasing capital expense.
  
• Technical complexity: Designing systems that balance crop needs and solar efficiency requires specialized knowledge and careful planning. (SI2)
  
• Insurance risk & uncertainty: Farmers and developers may struggle with liability or securing financing without more performance data. (SI2)
  

To overcome these challenges, the report argues, supportive policies and flexible financial models, such as grants, tax incentives, and public-private partnerships, will be critical.

Broader implications & future outlook

The IEEFA study reflects a growing recognition that solar and agriculture don’t have to compete; they can coexist sustainably. By adopting agrivoltaics, rural regions may benefit from new income opportunities, reduced water stress, and stronger local economies.

Independent research supports this vision. A survey by the Solar & Storage Industries Institute found agrivoltaic systems can enable job creation in solar installation and maintenance while preserving agricultural employment. Meanwhile, global analyses underscore reduced evaporation and microclimate benefits under solar panels.

Why this matters

With U.S. energy demand rising, driven by electrification, AI, and data centers, agrivoltaics offers a strategic way to scale solar while preserving and improving farm productivity. The report bolsters the case for policy reform, arguing that aligned incentives could help agrivoltaics move from niche deployments to a mainstream solution.

If realized at scale, agrivoltaic projects could play a pivotal role in future rural energy and land‑use planning, potentially reshaping the economic landscape of farming communities across America.

Sources:

• IEEFA report: Agrivoltaics: An economic option for farmers and rural development
  
• IEEFA press release on agrivoltaics benefits (IEEFA)
  
• SI2 research on agrivoltaic employment and community benefits
  
• Global and technical context on agrivoltaics (pv-magazine.com)