German researchers found that the costs of agrivoltaic energy far outweigh the agricultural benefits, raising questions about subsidies and highlighting the need for more cost-competitive system designs.
Scientists from the German Thünen Institute for Agricultural Technology have proposed including the costs of land conservation in the modeling of the levelized energy costs (LCOE) for agricultural voltaic projects
“Agrivoltaic energy can preserve agricultural land more effectively than standard land‑mounted PV installations by enabling the simultaneous use of land for electricity generation and agriculture,” said the lead author of the study. Jonas Bohmtold pv magazine. “However, our analysis shows that this country‑The conservation benefit comes at a significant cost. These costs must be borne by the investor, electricity customers or society.”
He also emphasized that agricultural production contributes only marginally to the overall economic performance of agrivoltaic systems as electricity generation remains the dominant source of income.
“To quantify agricultural yields on land, we used historical data from the German Farm Accountancy Data Network, which provides long-term data‑term, representative information on agricultural factor incomes in Germany. These data confirm that the value creation in agriculture is far too small to compensate for the significantly higher system costs of agrivoltaic energy,” he further explains.
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The modeling assumed that agrivoltaic systems must comply with German standards, which require at least 85% of installations at ground level or 90% of high-mounted systems to remain in agricultural production.
For Capex, the researchers took into account the costs for solar panels, inverters, mounting systems, internal cabling, installation, fencing, transformers and possibly a substation, along with the costs of land acquisition, biodiversity measures, approvals, engineering and environmental reports, project planning and construction supervision. Opex calculations include monitoring, reporting, inspections, maintenance, remote control capabilities, security, insurance, commercial administration, legal advice, biodiversity conservation, grassland maintenance, cleaning, inverter repair and other miscellaneous costs.
Image: Thünen Institute for Agricultural Economics, Land Use Policy, CC BY 4.0
Electricity yields were estimated based on average global solar radiation data from the German Weather Service (DWD) for four soil climate zones between 2014 and 2023. The cost assessment also took into account agricultural income from land under the agrivoltaic systems, which was offset against the total system costs.
Using real cost data from German project developers, the team found that levelized electricity costs (LCOE) for agrivoltaic systems are 4% to 148% higher than for conventional ground-mounted PV installations, with applications such as agrivoltaics for apple orchards showing the largest cost differences.
“We also found that, when the additional costs of agrivoltaic systems are expressed per hectare of preserved agricultural land, the social costs are €8,000–26,000 ($9,533–30,982) per hectare per year for mid-height systems and €42,000–75,000 per hectare per year for high-mounted structures,” Böhm said. “These figures are many times higher than the potential agricultural return of the same land.”
“Our results therefore cast doubt on the cost-effectiveness of agrivoltaic energy as a land management strategy and raise important questions on the justification of government subsidies,” he added. “While specific concepts, such as agrivoltaic systems for apple orchards, can create remarkable synergies – such as replacing hail protection nets – they also entail significantly higher system costs. The lowest additional costs occur in agrivoltaic systems that require only minimal adjustments from the agricultural sector, such as the use of grassland or livestock farming.”
“Rather than broadly subsidizing current expensive and uncompetitive agricultural voltaic systems, policy should prioritize supporting the testing and development of new concepts that have a realistic chance of becoming cost-competitive in the future,” he concluded.
The study findings are available in the study “Preserving agricultural land with agrivoltaic energy – But at what cost? An economic analysis of different agrivoltaic systems in Germany”, published in Land use policy.
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