Case Study: Renewables Innovation — Agrivoltaics

The global agrivoltaics market reached approximately $4.5 billion in 2024 and is projected to grow at 10-16% annually through 2030. This dual-use approach—mounting solar panels above or alongside crops—addresses two critical challenges simultaneously: the world needs both more renewable energy and more food production, often competing for the same land. Research from Fraunhofer ISE and other institutions demonstrates that well-designed agrivoltaic systems can improve land use efficiency by up to 200%, generating electricity while maintaining or even increasing agricultural yields.

Why It Matters

Global land scarcity creates a fundamental tension between solar energy expansion and agricultural preservation. The United States alone will need to deploy solar across an estimated 10 million acres by 2050 to meet decarbonization targets. Meanwhile, agricultural land faces pressure from climate change, urbanization, and soil degradation. Agrivoltaics offers a practical resolution: rather than choosing between food and energy, farmers can produce both.

The economic case is compelling. Japanese agrivoltaic farmers report gross returns of approximately ¥18.7 million ($125,000) per hectare annually when combining rice production with electricity sales—fourteen times higher than rice cultivation alone. For farmers facing declining commodity prices and unpredictable weather, solar revenue provides income diversification and climate resilience.

Beyond economics, agrivoltaics creates unexpected synergies. Solar panels provide shade that reduces water evaporation by up to 40%, protecting crops during heat waves. In turn, the cooling effect from vegetation beneath panels increases photovoltaic electricity output by approximately 20% compared to panels over bare ground. These mutual benefits transform what could be a land-use conflict into a regenerative system.

Key Concepts

Types of Agrivoltaic Systems

Elevated systems mount panels 2-5 meters above ground, allowing tractors and farming equipment to operate underneath. Germany's APV-RESOLA project pioneered this approach with 194 kW of capacity at 5-meter height, successfully growing wheat, potatoes, and celery. Elevated systems work best for mechanized row crops but require higher structural investment.

Interrow systems place panels between crop rows rather than directly above them. This configuration suits orchards, vineyards, and berry production where existing row spacing accommodates solar infrastructure. The approach minimizes shading while capturing sunlight between established plantings.

Vertical bifacial systems orient panels vertically facing east-west, capturing morning and evening sun while allowing maximum light to reach crops at midday. Japan has pioneered vertical installations in rice paddies, with some systems using sun-tracking technology to optimize both energy generation and crop exposure.

Stilt-mounted and grazing systems elevate panels just high enough for livestock access, typically 2-3 meters. Sheep grazing beneath solar arrays has become common in the United States, with the animals providing vegetation management while producing wool and meat. A 10 MW installation near Boulder, Colorado uses 12 sheep to manage grass across 55 acres.

Crop Compatibility

Not all crops thrive under partial shade. Research indicates shade-tolerant crops perform best in agrivoltaic systems:

High compatibility: Lettuce, spinach, kale, and other leafy greens often produce higher yields under panels due to reduced heat stress. Berries (especially raspberries and strawberries) and certain herbs also perform well with 20-40% shading.

Moderate compatibility: Potatoes, peppers, and tomatoes show variable results depending on climate. In hot, dry conditions, shading actually increases yields; in cooler or cloudier climates, yields may decrease 10-20%.

Lower compatibility: Corn, soybeans, and other light-demanding grain crops experience yield reductions of 15-25% under typical agrivoltaic shading. However, these losses may be acceptable when electricity revenue compensates.

Rice paddies: Japanese research shows rice yields typically decline 20-25% under agrivoltaic systems, but electricity income more than compensates economically. Regulations require maintaining at least 80% of baseline yields.

What's Working

Microclimate benefits exceed expectations. Fraunhofer ISE's research on apple orchards near Lake Constance found agrivoltaic systems reduced irrigation requirements by 50% and pesticide use by 70%. The panels provided protection against excessive sun, hail, and heavy rain that increasingly damage exposed crops due to climate change. Similar water savings of 20-47% appear across studies in arid and semi-arid regions.

Hot, dry climates show yield improvements. A 2025 Nature study found that in dryland regions, agrivoltaics mitigated midday photosynthesis depression in crops, reduced water stress, and achieved equal or greater daily carbon assimilation across all studied plants. Temperature reductions of 1-4°C under panels helped offset climate change impacts.

Community solar models enable farmer participation. Jack's Solar Garden in Colorado operates as a 1.2 MW community solar installation where subscribers pay for energy credits while the farm grows tomatoes, peppers, lettuce, and herbs beneath panels. The nonprofit Colorado Agrivoltaic Learning Center now hosts 500+ annual visitors and provides educational programming to schools across the state.

Policy support accelerates adoption. Japan's 2013 regulatory framework allowing farmland conversion for agrivoltaics unlocked an industry now comprising roughly 2,000 farms. The EU has pledged approximately €600 million toward agrivoltaic development, while Italy launched a €323 million tender in 2025. Colorado passed legislation providing $500,000 in demonstration grants plus property tax exemptions for agrivoltaic equipment.

What Isn't Working

High upfront costs limit farmer adoption. Elevated agrivoltaic systems cost significantly more than ground-mount solar due to stronger structural requirements. Typical payback periods of 8-10 years challenge farmers already operating on thin margins. Without subsidies or favorable financing, many installations remain economically marginal.

Regulatory complexity creates barriers. Agricultural land typically receives tax advantages and zoning protections that adding solar infrastructure can jeopardize. In many jurisdictions, farmers must navigate conflicting agricultural and energy regulations, uncertain permitting processes, and unclear land classification rules. German surveys found bureaucracy and legal opacity as primary farmer concerns.

Grid connection bottlenecks constrain growth. Fraunhofer ISE's analysis of German potential found grid infrastructure, not land availability, as the limiting factor for expansion. Rural electrical grids often lack capacity to absorb significant new generation, requiring expensive upgrades that delay projects by years.

Yield reductions exceed tolerance in some contexts. While partial shading benefits many crops, studies show 15-25% yield losses for grain crops like rice, wheat, and corn under typical configurations. For commodity farmers operating at scale, these losses may outweigh electricity income, particularly when grain prices are high.

Maintenance complexity increases. Managing two production systems simultaneously requires different expertise, equipment, and scheduling. Panel cleaning may conflict with crop spraying schedules. Some farmers report that the operational complexity discourages adoption even when economics appear favorable.

Real-World Examples

Japan's Solar Sharing Program

Japan pioneered commercial agrivoltaics after the Ministry of Agriculture authorized farmland solar in 2013. By late 2021, installations reached 200 MW across 182 hectares, growing to approximately 2,000 farms by 2024. The regulatory framework requires maintaining at least 80% of baseline crop yields, with optimal shading rates of 27-39%.

Japanese agrivoltaics spans over 120 plant species, from rice paddies to vegetable plots. The economic case proves compelling: rice farmers report combined crop and electricity returns exceeding ¥18.7 million per hectare—dramatically higher than farming alone. A 20-year guaranteed feed-in tariff plus 50% rebates on initial investment de-risk farmer adoption.

Germany's Fraunhofer Research Projects

Fraunhofer ISE's APV-RESOLA project near Lake Constance (2016-2021) tested agrivoltaics with wheat, potatoes, celery, and clover grass at commercial scale. Results showed celery yields increased 12%, winter wheat rose 3%, while clover grass declined 8%. During the hot, dry 2018 season, even potato yields increased 11% due to reduced heat stress.

The ongoing Model Region Baden-Württemberg now encompasses 30+ partners across 13 pilot locations with 1,700+ kW total capacity. Apple orchard trials demonstrated 50% irrigation reduction and 70% pesticide savings—benefits that may prove more valuable than the electricity generated as climate change intensifies.

Fraunhofer estimates Germany could deploy at least 500 GW of agrivoltaic capacity on suitable agricultural land, though grid infrastructure limits near-term expansion.

Jack's Solar Garden, Colorado

This 1.2 MW installation on a 24-acre family farm in Longmont represents the largest commercially active agrivoltaics research site in the United States. Launched in 2020, the system powers approximately 300 homes while growing tomatoes, peppers, lettuce, onions, strawberries, and raspberries across 5 acres.

Research partnerships with NREL, Colorado State University, and University of Arizona generate data on crop performance, soil health, and pollinator habitat. The Audubon Rockies established Colorado's largest Habitat Hero pollinator area on the site. A nonprofit farming partner donated over 1,500 pounds of produce to local food assistance programs.

The project catalyzed Colorado's agrivoltaics policy development, with Governor Jared Polis signing legislation at the farm to fund research and provide tax incentives. It demonstrates how a single high-visibility project can accelerate an entire sector's development.

Action Checklist

• Assess land suitability by evaluating sun exposure, slope, soil type, and existing crop patterns to identify areas where panels could provide beneficial shading without compromising primary agricultural operations
• Research local regulations including agricultural zoning, solar permitting, grid interconnection requirements, and any agrivoltaic-specific incentive programs in your jurisdiction
• Model economics by calculating expected electricity revenue, potential yield changes for your specific crops, installation costs, and payback period under various scenarios
• Consult with agronomists familiar with shade-tolerant crop varieties to identify which plants in your rotation would benefit from or tolerate partial shading
• Engage grid operators early to understand interconnection timelines, capacity constraints, and any upgrade requirements that could affect project feasibility
• Visit operating installations to observe management practices, understand operational challenges, and learn from farmers already combining solar and crop production
• Explore financing options including agricultural loans, solar incentives, community solar models, and emerging agrivoltaic-specific grant programs

FAQ

Q: How much do crop yields change under agrivoltaic systems? A: Yield impacts vary widely by crop type and climate, ranging from 20% reductions to 12% increases. Shade-tolerant crops like lettuce and berries often maintain or improve yields. Light-demanding grains typically decline 15-25%. Hot, dry conditions favor agrivoltaics as panels reduce heat and water stress.

Q: What is the typical payback period for agrivoltaic installations? A: Most projects achieve payback in 8-10 years, depending on electricity prices, incentives, and system costs. Elevated systems cost more than standard ground-mount solar due to structural requirements, but dual income from crops plus electricity can accelerate returns compared to either use alone.

Q: Can agrivoltaics work with livestock instead of crops? A: Yes, sheep grazing beneath solar panels is increasingly common, particularly in the United States. The animals provide vegetation management while producing wool and meat. Chickens, cattle, and bees are also integrated at various sites. Livestock often requires less precise panel placement than crop production.

Q: What are the main challenges preventing wider adoption? A: High upfront costs, regulatory complexity, grid connection delays, and operational complexity limit growth. Many farmers lack access to capital for elevated systems, while unclear land use rules and slow permitting create uncertainty. Grid infrastructure often cannot absorb new rural generation without expensive upgrades.

Sources

• Fraunhofer ISE. (2024). "Agrivoltaics: Opportunities for Agriculture and the Energy Transition." https://www.ise.fraunhofer.de/en/publications/studies/agrivoltaics-opportunities-for-agriculture-and-the-energy-transition.html
• Weselek, A. et al. (2021). "Agrivoltaic system impacts on microclimate and yield of different crops within an organic crop rotation in a temperate climate." Agronomy for Sustainable Development.
• Japan Ministry of Agriculture, Forestry and Fisheries. (2021). "Guidelines for Solar Sharing." https://www.maff.go.jp
• National Renewable Energy Laboratory. (2024). "The Potential of Agrivoltaics for the U.S. Solar Industry, Farmers, and Communities." https://www.nrel.gov/solar/market-research-analysis/agrivoltaics
• Barron-Gafford, G.A. et al. (2019). "Agrivoltaics provide mutual benefits across the food-energy-water nexus in drylands." Nature Sustainability.
• pv magazine. (2024). "Research on agrivoltaics in Germany demonstrates strong synergies." https://www.pv-magazine.com/2024/10/16/research-on-agrivoltaics-in-germany-demonstrates-strong-synergies/
• AgriSolar Clearinghouse. (2024). "Case Study: Jack's Solar Garden." https://www.agrisolarclearinghouse.org/case-study-jacks-solar-garden/