I know this can be a controversial subject and a source of debate in many of our farming communities… some farm families have capitalized by allowing wind and solar companies to lease their ground to help generate on-farm revenue. While others are greatly against solar and wind companies bidding up the cost of rents and taking some good farm ground out of production. Not to mention, they also hate the way it looks. Bottom line, I know this subject is controversial, and we have readers on all sides of the debate, I’m just trying to share some of the latest information that is floating around…
As President Trump prioritizes boosting the U.S. fossil fuel industry, uncertainties are rising about the future of renewable energy, particularly solar and wind energy production. The shift at the Federal level can also be felt at the state level, where opponents to these projects are finding increasing support. The change in attitudes also comes at an unfortunate time, economically, for U.S. farmers, some of which may be depending on added income from land leases to renewable energy companies to keep them out of the red during leaner times.
Wind provides about 10% of the electricity generated in the United States, making it the nation’s largest source of renewable energy. However, solar is now the most dominant source of new electricity generation being added to the U.S. grid. According to the Energy Information Administration (EIA), over 61% of new capacity added to the grid last year was solar (30 GW) while 18% was battery storage (10.3 GW). Only 5.1 GW of wind was added, the smallest wind capacity addition since 2014.
Among the states looking to curb solar is Texas, which is one of the top solar energy-producing states in the U.S. Since 2019, the state’s power companies have boosted wind generation capacity by +50%, solar capacity by +800%, and battery storage capacity by a whopping +5,500%, according to energy data portal Cleanview, using EIA and state-level data. Those installations have resulted in wind and solar farms generating roughly 30% of the state’s electricity in 2024.
So far this legislative session, Texas state lawmakers have introduced a string of bills that would place restrictions on solar and wind power projects, requiring new permits, assessing fees, adding new regulatory requirements and placing new taxes on the projects. Critics say the bill threatens the development of new projects and interferes with power providers’ ability to keep up with the state’s surging growth.
Other states are attempting to put up similar barriers. Arizona’s House earlier this year approved a bill that would bar wind farm projects within a dozen miles of any property zoned for residential use. Critics say this essential puts about 90% of the states’ land off limits.
A bill proposed in Missouri would raise taxes on farmers who participate in wind or solar energy projects. The legislation calls for reassessing them as commercial properties, which critics say would nearly triple the assessment rate for agricultural land that hosts energy infrastructure.
In Ohio, 26 counties have banned renewable energy projects following passage of a 2021 law that gave county commissioners more authority to restrict where wind and solar projects can be built. This is also part of a wider trend of municipal governments more heavily restricting these projects, often running counter to state policy goals. Nationwide, over 100 counties have banned or severely restricted utility-scale solar development.
Some of the pushback to these renewable energy sources is tied to reliability concerns while others simply see the windmills and solar panel farms as eyesores that are ruining the countryside. There is also ongoing skepticism about climate change and whether a transition to renewable energy is necessary or just a waste of money and effort. Landowners can be found on both sides of the debate.
Troy Rule, a professor of law at Arizona State University, says another set of oppositional stakeholders can be farmers who lease the land. “They are more likely to review solar project developers as competitors whose offers of high solar lease payments drive up agricultural land lease rates and could price tenant farmers out of business,” Rule said.
At the Federal level, experts say one of the most serious risks to the industry is the potential repeal of the Investment Tax Credit (ITC) within the IRA. Solar and energy storage projects of all sizes are offered a tax credit for 30% of the installed system cost. Bonus adders are made available for projects using U.S.-made components or located in certain communities.
Uncertainty over the fate of these tax credits has cast a clouded the outlook for the industry and considerably slowed investment. While most industry insiders think an outright termination of ITC is unlikely, there is political support for phasing it out sometime over the next two years, rather than in the mid-2030s as currently planned. Roth Capital Partners said that ITC cuts may occur as part of the administration’s budget reconciliation bill, which would take place sometime in the fourth quarter of 2025.
Compounding the future viability of solar energy is new U.S. import tariffs. The Commerce Department has proposed rates as stiff as +3,521% on solar cell imports from some Southeast Asia countries. Because the U.S. still largely relies on imports for solar cell components, the industry is expecting a massive slowdown in the rollout of new solar projects. One potential benefit of tariffs is that it could create a more level playing field for U.S. solar manufacturers competing with low-cost global suppliers but it will take time to increase capacity. (Sources: The Wall Street Journal, PV Magazine, Utility Dive, Reuters, EIA)
