The impact of commercial and utility-scale solar energy on high value farmland

Purpose The expected rapid development of solar energy in the United States has raised concerns about its effect on high- value farmland. This study examines how commercial and utility-scale solar energy facilities influence farmland prices across Indiana from 2015 to 2020. Design/methodology/approach We estimate a hedonic price model to capture the relationship between farmland values and distance to the nearest solar facility. Quantile and expectile regressions are employed to measure effects across the conditional price distribution. Findings Our results provide consistent evidence that farmland closer to solar facilities sells at a premium. Traditional OLS results suggest a 1.4% price premium per mile closer to a solar facility, while the premium increases to 1.8% at the upper 90th expectile. Research limitations/implications Our findings support the concern that solar energy development may impact high-value farmland. These findings have significant implications for policymakers, highlighting the need to balance the economic benefits of solar energy expansion with the preservation of agriculturally productive and high-value agricultural lands, ensuring that farmers, tenants and landowners are not disproportionately affected by increasing land costs. Originality/value This paper provides new evidence on how solar energy development shapes farmland values across the price distribution, extending the standard hedonic framework through the integration of quantile and expectile regressions.