Is Solar Energy Right for Your Farm?
5 ‘Plan-Ahead’ Reasons Solar Power Saves Farmers Huge Long-Term Money
Costs of living are soaring. Inflation and other costs of doing business are threatening more farmers than ever before. What can you do? The single best solution for agricultural producers who want to put the brakes on rising costs is to install solar energy for their farms.
This is because, for many farmers, energy is one of your highest expenses. And without solar energy, there’s not a whole lot you can do about it other than try to improve energy efficiency. But that only goes so far, and if the utility just keeps jacking up the rates, your savings will get consumed and you’ll still be paying more.
Solar energy for farms — the answer
This is why governments at all levels continue to offer solar tax incentives like the Investment Tax Credit (ITC) and the REAP grant, from the Department of Agriculture. Your farm or rural small business can take advantage of these incentives and cut the cost of installing solar panels in half, or more.
Solar energy for farms is a better investment than the stock market. It’s the most foolproof way to defeat inflation, because power costs will continue to climb, but your solar system will not cost more each month. So for each passing year, your savings increase from what you would have been paying.
5 reasons solar power is a ‘Yes-brainer’
Agricultural producers have a lot of questions about solar energy because they want to know if it’s right for their farm. Yes, the technical aspects can get complicated, and every farm or rural business has a different set of questions. But before you get into all that, here’s what you need to ask yourself first:
- Am I a planner?
- Do I like to weigh the pros and cons of a problem, and pick the best solution?
- Do I look ahead five, ten, twenty years when making a big decision?
When it comes to deciding about installing solar energy for your farm or rural small business, if you’re the kind of person who answers “Yes” to at least a couple of those questions, you’re going to like what you find in this article. Long term, it’s not just the best way to go. For many farms, it’s the only way to go.
Read on to see the five main reasons to consider solar power for your farm.
1. You pay for power no matter what
If your farm uses 3000 kW per month, then you’re paying for 3000 kW per month. This is true no matter where your farm’s energy comes from, whether solar, wind, coal, natural gas, nuclear, or your teenager out back peddling on a grid-connected bike (you’ll have to feed him more!).
So when you look at the costs of solar energy for your farm, it’s not just a question of what am I paying versus what will I be paying. You are paying for the power either way. The difference is simply in where that power comes from.
Solar investment example
For example, if you invest $45,000 into a solar energy system for your farm that will last for 30 years, that’s $125 per month. You have to compare that to how much you’d pay for the same power the normal way over the same 30 years. Your generated solar energy will replace a portion of your bill, and thus, your bill will be lower — for all 30 years. Get enough solar panels, and it can be zero. Solar power does not cost more over the long term. It costs the same, or less — every single time.
Your only question here is — how long will you operate your agricultural business? If you’re planning to retire in two years, maybe wait on solar until you’ve re-settled. Maybe. But if you’ll own your farm for a long time or intend to keep it in the family, there will never be a better time than now to start saving big money on energy.
2. No more power-renting. You own the power.
Right now, your power company owns your power, and rents it out to you. With solar power, your power is yours.
The value of true ownership cannot be overstated. As your “power landlord,” your power company can pretty much do whatever they want, and your agricultural business has to go along. They can add new fees, raise rates, and make demands, and you have to comply.
You have zero control.
Look at your power bills from five and ten years ago. Look at the ‘per-kilowatt’ charges. Now think ahead five, ten, and twenty years. How much more will they be billing you for? How much control over these guaranteed rate increases do you have? You have none.
But as a farm or rural small business that’s also a solar energy generator, you own every kilowatt you produce. And when you sell your business, you sell your energy generation assets with it. That leads right into reason #3.
3. Your farm’s value will increase
Land and business valuations are impossible to predict, and markets are wacky in some parts of the country. But in general, for a typical 20 kW farm solar energy system, you can expect to add at least $20,000 to the value of your business, depending on how old the solar system is when you sell.
And even if markets flatten, you still get this value. If the farms in your region start selling for less than expected, you can still command at least 20k more than you would have gotten in that depressed market, because of your farm’s solar energy system.
In other words, if you decide to sell your agricultural business five years after installing solar energy in your farm, you’ll recover your unrealized ROI in the sale.
4. Everyone gets their ROI
As long as they used quality solar panels and the installation was done by professionals, we at Ag Solar have never seen a farm or business fail to recover their ROI. Ever.
The only question is when. In the best cases, the break-even point happens in just a couple of years. If you can win a REAP grant and pair it up with the federal solar tax credit, you have a very strong chance of seeing this happen. In other cases, it’s more like 5-10. But it always happens when designed properly.
Ag Solar can help you apply for and win a REAP grant — we’ve saved our customers millions, and counting.
Why ROI from solar is guaranteed
You will eventually save more than you spend installing solar energy in your farm or rural business. Why? Because your power company will keep raising rates — on the same usage of energy.
This is very important to understand. If you’re using 3000 kW per month now, there’s no reason to believe that’s going to change very much unless your farm business changes in a significant way. But in ten years or so, your power company will charge you double what you’re paying now — for the same 3000 kW of energy.
Do you see that? If you’re paying $300 per month now, you’ll likely be paying $600 in ten years. For the same exact thing!
With solar power on your farm, you own your power, and you’ll have already paid for it way back at the moment of installation.
Hypothetical Example
Let’s say 80% of your power bill gets eliminated because of your solar panels and you were paying $300 per month before. With solar power, you’re now only paying $60 per month, and are saving $240.
And hypothetically assuming rates double in ten years, you’ll be paying $120 for that fraction of your power in ten years. But you would have paid $600.
That means in ten years you’ll be saving $480 — every month. What does this mean?
As their costs rise, your savings rise.
Do you see why if you’re a planner who looks ahead five, ten, twenty years, and if you like to weigh the pros and cons, solar power really is the clear answer to beating inflation, saving money, and being a good steward of natural resources at the same time?
5. Every problem has a solution
Solar isn’t right for everyone. For instance, if your rural business is surrounded by 100-foot tall pine trees and the sun never hits your roof, then you probably wouldn’t benefit from solar energy.
But most farms don’t have that problem. Most farms are built on larger, often wide-open, spaces. There are few obstructions relative to the size of the land.
And even if your location does have some complicating features to it, there’s usually a solution. You could cut down the trees blocking the most direct sunlight, for instance. But that’s a pricey solution, and you probably like your trees. Other complications could arise from nearby buildings, the angle of your home, the tilt of the roof, and many more.
Our main message to you about complications is this: Almost every problem has a solution..
Ag Solar’s consultants are here to give you the best and most honest assessment of your options. If solar energy, for some unusual reason, isn’t right for your farm, we will tell you that, straight up.
Solar energy for your farm — Get the facts today
- 20 year cost projections.
- Energy production estimates.
- Solar tax credit information.
- REAP grant and loan information, plus application help.
- Break-even estimate.
When you meet with our solar energy farm experts, you’ll get all the information you need to make an informed decision for your agricultural business.
Power ‘landlords’ aren’t going to quit raising your rates.
The sooner you own it, the sooner you save it. Make an appointment today.
