Long term benefits make solar an option for farmers
As energy costs rise, more farms, especially those in the Arkansas poultry industry, are turning to solar power as a cost-effective solution to reduce energy bills. While installing solar photovoltaic (PV) systems requires an upfront investment, the long-term benefits make it an attractive option for farmers looking to manage rising energy costs.
Over the past decade, the cost of solar PV systems has dropped significantly. The price of solar modules and inverters has fallen by more than 60%, making solar power more accessible to farmers. By 2020, the National Renewable Energy Laboratory (NREL) reported solar energy costs just a fraction of what it did in 2000, with some systems now generating power at a rate as low as $0.03 per kWh compared to the national average of $0.1074 per kWh.
Farms can significantly reduce their electricity bills by switching to solar. Although the retail price of electricity in Arkansas is relatively low, solar power still offers savings, especially given the increasing cost of energy. Solar-generated electricity is often cheaper to produce, providing long-term financial stability.
Arkansas specifically has a legacy net metering policy that allows farm owners to send excess solar power back to the grid for credits. However, after September 30, 2024, NREL stated this policy will be replaced by a new net energy billing system, which compensates solar producers at a lower rate. Understanding these changes is crucial for farmers considering solar investments.
A 2024 study by Liang and Pop, Financial Analysis Example for Photovoltaics on a Broiler Farm, reported a model farm using four 40 × 400-foot broiler houses consumes about 150,000 kWh annually. Installing a 100-kW solar system could generate around 145,000 kWh in its first year, dramatically reducing energy costs. Analysis shows that the system’s payback period ranges from 7 to 11 years, depending on system cost and utility rates. Federal incentives, such as the 30% Investment Tax Credit (ITC), can further shorten the payback period.
Farmers can also take advantage of grants and low-interest loans through programs like the Rural Energy for America Program (REAP) to offset the initial cost of solar installations. These financial incentives make solar power an even more appealing investment for farm owners.
Solar PV systems provide farmers with a sustainable and cost-effective way to manage energy costs. With lower installation costs, tax incentives, and the potential for significant savings on electricity bills, solar power is an increasingly viable option for agricultural operations. Farmers looking to reduce their environmental footprint and energy expenses should consider solar as a wise investment for the future.
