USDA Limits Solar Projects on Farmland, Developers Concerned

• USDA tightens solar and wind project rules on farmland, prioritizing agriculture and smaller systems, while clean-energy advocates push for coexistence and innovative designs.

The USDA is tightening rules for solar and wind projects on farmland, reducing eligibility for loan-guarantee and grant programs to protect agricultural land. The new guidance excludes wind and solar from certain Rural Development loan guarantees, imposes stricter criteria for larger ground-mounted arrays, and bans panels from "foreign adversaries" in USDA-funded projects. Agriculture Secretary Brooke Rollins cites rising land costs and local opposition as reasons, aiming to prevent federal funds from favoring utility-scale solar on prime cropland.

Clean-energy advocates argue that renewable projects occupy minimal rural land and can coexist with agriculture, providing stable income for farmers. The updated policy favors smaller, on-farm systems and rooftop projects, increasing paperwork and reducing federal credit support for larger projects. Developers may focus on agrivoltaic designs and siting on marginal land. The policy arrives amid uncertain federal renewable support, prompting farmers to prepare for stricter documentation and early engagement with USDA staff.

How will USDA's new rules impact solar and wind projects on farmland?

• The USDA's new rules are likely to limit the expansion of large-scale solar and wind projects on prime agricultural land, potentially slowing the growth of renewable energy in rural areas.
  
• By reducing eligibility for loan-guarantee and grant programs, the USDA aims to prioritize the preservation of farmland over the development of utility-scale renewable projects.
• The exclusion of wind and solar projects from certain Rural Development loan guarantees may lead to increased financial challenges for developers seeking to establish large renewable installations.
  
• Stricter criteria for larger ground-mounted solar arrays could result in a shift towards smaller, more localized renewable energy systems, such as rooftop solar installations.
  
• The ban on panels from "foreign adversaries" in USDA-funded projects may affect the supply chain and increase costs for developers relying on international solar panel manufacturers.
• The policy may encourage the adoption of agrivoltaic systems, which integrate solar panels with agricultural activities, allowing for dual land use and potentially mitigating some of the restrictions.
• Developers might increasingly target marginal or less productive land for renewable projects to comply with the new guidelines, potentially altering site selection strategies.
  
• The increased paperwork and reduced federal credit support could deter some developers, leading to a potential slowdown in project approvals and implementation.
  
• Farmers interested in renewable energy projects may need to engage with USDA staff earlier in the planning process to navigate the new requirements and ensure compliance.
  
• The policy change reflects broader uncertainties in federal renewable energy support, prompting stakeholders to adapt to a more complex regulatory environment.