Gov. Gretchen Whitmer this month reversed a policy from the Snyder administration that blocked commercial solar energy projects on property enrolled in the state’s farmland preservation program.
The Whitmer administration says the move is meant to boost renewable energy as the state transitions from coal-fired power plants while also allowing farmers to diversify their income amid strained commodity prices.
Clean energy advocates praised Whitmer’s action, which was the result of a task force’s two-month process to address whether solar energy is compatible with farming operations. Across the U.S., states are grappling with concerns over whether the shift to renewables — particularly solar, which has a larger footprint than wind turbines — takes out productive farmland. In Michigan, energy developers and utilities are planning a solar buildout that could occupy thousands of acres.
Whitmer’s policy opens 3.4 million acres in the state’s Farmland and Open Space Preservation Program to solar, but only a small fraction of that is likely to be developed. The policy also requires several conditions to be met if farmland preservation landowners sign solar leases, such as planting pollinator-friendly plant species and maintaining existing drainage.
The administration of former Gov. Rick Snyder issued a policy in 2017 that commercial solar was not compatible with the farmland preservation program.
“Until now, it was a very firm deal breaker” for building solar on preservation land, said Ken Zebarah, sales manager with Jackson-based solar installer Harvest Energy Solutions LLC. “I’m glad they made this change.”
The task force included clean energy and agricultural interest groups and met a few times over the past two months.
Property owners who are enrolled in the farmland preservation program — created in 1974 under Public Act 116 — receive tax credits based on total farm income by agreeing to keep the land from being developed. They are able to get out of these contracts, but must pay back the previous seven years of tax credits plus 6 percent interest. Under the new policy, farmers can stay in the preservation program but they no longer receive a tax credit. They may also forgo local tax exemptions if local assessors say the land is no longer qualified as agricultural.
Still, supporters say the income from a solar lease would most often make up for the loss in tax credits.
“The per-acre per-year land rental rate can be significant and may be much more than the tax credit,” said Jennifer Holton, spokesperson for the Michigan Department of Agriculture & Rural Development. “All of this will have to be weighted by the farmer and depend on their current operation.”
MDARD, which administers the farmland preservation program, says the policy change will not result in a loss of usable farmland since owners must ensure the land is returned to agricultural use after the life of the panels, typically around 25 years.
Solar projects also would have to be at the construction stage when landowners enter the deferment period. This protects them from deferring tax credits during the early stages of a planned project that might not end up getting built.
“You don’t want a farmer who just signs a lease to instantly lose the tax credit,” said Laura Sherman, president of the Michigan Energy Innovation Business Council. “The development period can take a couple of years.”
Sherman said revenue from a solar lease is “enough to fully compensate them for the lost crop, the tax credit, and quite a bit more. They can actually sustain themselves a lot more easily with this type of farming — sun farming.”
The policy change was praised by environmental groups and the Michigan Agri-Business Association. The Michigan Farm Bureau isn’t taking a position.
“The Michigan Farm Bureau has a strong history of supporting renewable energy including solar energy. We also have a strong history of supporting farmland preservation,” said Matthew Kapp, land stewardship specialist at the Michigan Farm Bureau, which was part of the task force. “We took part just to make sure farmers’ concerns were represented.”
Given the conditions in the program such as the mandate to plant pollinator-friendly species, Sherman said the solar panels can enhance the surrounding farmland and make it more productive.
Zebarah said Harvest Energy Solutions has pollinator habitat at an 8-acre solar project in Lenawee County. Working with the Michigan State University Extension, the company is testing “a few different types of clover,” Zebarah said.
“We’re very open to the fact that we don’t know a whole lot about it,” he said. “The whole idea of pollinator species around solar farms is kind of new.”
Michigan appears to be one of the only states that requires pollinator habitat alongside solar, albeit in limited cases involving farmland preservation property.
Sarah Mills, senior project manager at the University of Michigan’s Center for Local, State, and Urban Policy (CLOSUP), has been researching how states’ farmland preservation programs treat wind and solar. She said only 13 states — including Michigan — have formal policies, with most of those saying solar is not compatible. Michigan was in that group until last week.
“Most states haven’t yet grappled with how to reconcile renewable energy and farmland preservation programs,” Mills said. She called the new policy “middle of the road” because farmers can remain enrolled in the program but have to give up the tax credit.
Still, “I don’t think (losing the tax credit) is going to stop farmers from leasing to solar developers at all. Solar provides a really great economic opportunity for farmers,” Mills said.
She added that the new policy will likely help local governments that also are struggling with zoning regulations related to solar on agricultural land.
A new tool
Overall, Mills has “mixed feelings” about developing solar on farmland, particularly because of the uncertainty around the effects of the long-term land use. She said developers should be targeting brownfields and marginal farmland first.
“The reason we have these farmland preservation programs in the first place is because farmland is always the cheapest to develop,” Mills said.
Despite concerns about taking out productive farmland for solar, supporters say — if done right — it can enhance agricultural property. Developers also will target farmland when it makes sense for the scale of the project.
“This (policy) doesn’t make it easy or extra desirable to go to this farmland (for solar projects),” Sherman said. “It just creates a tool, simply removing a barrier. We’re not going to be blanketing all of this farmland with solar panels.”
Additionally, they say farms are also used for wind energy production and for growing corn for ethanol.
“You’re talking about using farmland for some kind of fuel,” Zebarah said. “Why is solar energy any different? We shouldn’t dictate what fuel you’re allowed to make with your farmland.”