How Can I Get Funding for Solar Panels on My Farm?
Did you know that the U.S. Department of Agriculture (USDA) offers financial assistance to fund photovoltaic energy projects on your farm or ranch? Solar panels can increase your operation’s profitability and you may even be eligible for funding from government grant programs for solar panels. One of those grants called the Rural Energy for America Program (REAP).
At FarmRaise, we’re passionate about keeping farms financial solvent. If you’re looking for other ways to generate income check out our guide to maximizing your farm’s capabilities with side hustles.
In this post, our we’ll cover:
- Why solar energy may be a good fit for your farmers and ranchers
- Types of solar panel ownership
- Tips and funding opportunities for solar projects on your farm
But first, what’s this about “photovoltaic” initiatives? A photovoltaic system (PV system) is a more scientific word for the typical solar panel (or PV module) system we think of when we say “solar energy.”
Benefits of Solar Energy for Agricultural Producers
The USDA wants to incentivize farmers to make the upgrade toward more renewable energy systems. That’s apparent by their investment in sustainability climate Smart agriculture projects. But aside from government incentives, which we’ll talk about throughout this article, there are a lot of benefits for rethinking your energy use.
Solar panels can reduce your electric bill and reliance on nonrenewable energy. You can use the energy produced by your solar system in the place of electricity from the grid, and any surplus energy can be sole through solar energy programs.
There’s more you can do with solar panels that generate energy. Ever heard of agrovoltaics? It basically means using your land for both solar panels and for agricultural purposes. Here’s an example: Once you install your panels, you can plant shade crops under them. And studies have shown that it’s an effective way to address drought and water loss since solar panels can reduce the amount of evaporation of your irrigation water.
Tax Credits for Solar Installation
Every year the government decides how much tax credit you might receive for installing solar panels on your commercial farm or ranch. If your farm isn’t a commercial farm (growing at your home for your own sustenance with less than 450,000 per year in sales) then you’ll need to take a look at homeowner’s tax credits.
For commercial farmers and ranchers, you may be eligible for a tax credit on your federal corporate income taxes of 30% of the installation costs. But it’s important to note that you only get that credit for the year you install the PV system. However, you can still write off the cost of depreciation after your installation year.
How to Get Started with Solar Panels on Your Farm
Now that you know how solar might have a positive impact your farm finances, you can start considering how you might go about your clean energy journey. Here’s something to consider, though. You may be reducing your energy costs, but solar panels can be a significant financial investment initially. So how can a rural small business get financial assistance to make the switch possible?
Vertical solar panel installation is one of the newest advents in agrivoltaic farming. Installing the solar panels vertically saves space so it may be a great option for smaller farms or farmers with little farmland available. Vertical solar farming can even save water lost to evaporation and is simpler to install because you don’t need to build elevated platforms to mount your panels on. Usually, solar panels need to be installed facing south but since vertical soar panels are two-sided they can faced in just about any direction and still be efficient.
Space efficiency: High
Energy output: High
Installation difficulty: Moderate
Growing Crops Under Panels and Raising Livestock
Vertical paneling isn’t the only way to maximize your farmland. Growing crops under solar panels is a great way to take advantage of the shade provided by conventional solar panels. This is especially advantageous for farmers who grow salad greens, raspberries, mint and other shade-tolerant produce. Growing crops under panels also helps reduce water use and may increase your yield.
Using land under and around solar panels for grazing is called “solar pasture.” While this may seem simple there are a few considerations to keep in mind. You’ll need to be strategic about what forage mixes can both grow around your panels and nourish your livestock. You should also install your panels in a livestock-friendly way. Got sheep? Make sure any emergency shutdown buttons on the panels mounts are not reachable. Cattle? If your bovine tend to stamped make sure your panels are installed high enough so they don’t knock down and stomp on them.
Space efficiency: High
Energy output: Moderate
Installation difficulty: Moderate
Growing Row Crops
Similar to growing crops under solar panels, growing row crops is both possible and beneficial for your operation. When growing row crops, you can install your solar panels in a rows as well. The lower to the ground, the more shade your panel will provide to your crops. If you need full sun to grow your watermelon, corn or tomatoes, consider installing your panels on a higher mount.
Space efficiency: Moderate
Energy output: Moderate
Installation difficulty: Easy
Greenhouse, Barn or Residence
Much like conventional solar paneling for homes, you can take advantage of extra roof space by installing solar panels on the roof your greenhouse, barn or residence. The energy must be used for agricultural business purposes to qualify for REAP grants.
Space efficiency: Moderate
Energy output: Moderate
Installation difficulty: Easy
Solar Panel Ownership Basics
There are two ways to think about installing panels: Direct ownership or third-party ownership.
If you opt for third-party ownership, you’ll work with a solar company or group of investors to get panels installed on your land. However, the panels aren’t yours so the company or group will get the tax credits or any federal funding and you’ll also pay them for electricity produced by the solar system. Third-party ownership isn’t available in every U.S. state and island, so you’d also need to check if it’s available in your locality. The upside: you probably won’t pay a dime for installation or operation.
With direct ownership, you own the panels outright and the energy that comes from them. Even if you took out a loan to buy the panels, you’ll be able to take advantage of the tax incentives and government funding programs available to solar farmers.
But are there ways to install solar panels without needing a loan from the bank or financing from a solar company?
California state solar tax credits and incentives
Several incentives, credits and rebates are available to all Californians who invest in solar energy systems. Other incentives in this list apply to multiple California counties or to lower-income energy customers.
Property tax exclusion for solar energy systems
California is one of 32 states that provide protection against property tax increases for homeowners who install solar panels. Under California law, all qualifying active solar energy systems will be excluded from the assessment of your property, meaning that installing solar panels will not impact your property taxes one way or another.
This property tax exclusion is currently scheduled to expire on Jan. 1, 2025.
California Self-Generation Incentive Program
Utility customers of the four major investor-owned utilities.- San Diego Gas Electric, SoCalGas, Southern California Edison and Pacific Gas Electric.- are eligible to receive rebates for installing solar batteries using California’s Self-Generation Incentive Program. The California Public Utilities Commission offers a 200 rebate for each kilowatt-hour of your solar storage system.
A fairly midsized battery like the LG Resu 16H Prime, one of the top picks in CNET’s list of best solar batteries, provides 16kWh of storage, which would result in a 3,200 rebate under the current rules in California. The battery itself will cost about 10,000 to 13,000 with installation, per CNET’s sister site SaveOnEnergy.
Disadvantaged Communities – Single-Family Solar Homes program
California’s DAC-SASH program provides solar incentives for low-income customers in disadvantaged communities. Administered by GRID Alternatives, the program offers Californians 8.5 million in incentives annually.
The California Public Utilities Commission says that eligible customers can receive up to 3 per watt in incentives for solar installations. The current cost per watt of solar panels in California is 3.93, so DAC-SASH participants could save about 75% on solar installations.
California net metering incentives
Net metering allows homes with solar installations to receive money back for contributing surplus solar energy to the broader electricity grid. New rules for net metering reduce the amount of money back for excess energy by 75%. While earlier net metering participants earned about 30 cents per kilowatt, new participants will get about 8 cents per kilowatt.
The new net metering plan comes with higher electricity rates for times when demand is high and access to renewable energy is low, making solar batteries more valuable.
PACE financing for solar panels
Property Assessed Clean Energy programs provide financing for solar installations that allows residents to pay back loans for solar panels with their property taxes. While commercial PACE loans are common throughout the US, only three states.- California, Florida and Missouri.- offer residential PACE programs.
Unlike mortgage loans, PACE loans usually require no down payment or monthly payments. Instead, borrowed money is repaid through homeowners’ property tax bills over a term of 10 to 30 years. However, a lien is placed on your home until the loan is fully paid off, which makes selling a home more complicated. Some lenders may not want to provide a mortgage for a home with an attached PACE lien.
Local communities may provide PACE-style financing of their own. The Sonoma County Energy Independence Program functions similarly to state-licensed PACE programs, letting participants pay back solar installations via their property tax bills over 10- or 20-year terms at 7.49% interest.
Local solar tax credits and incentives in California
Beyond the solar incentives at the state level, many cities, towns and municipalities offer additional incentives for residents who invest in solar energy projects.
Alameda Municipal Power income-qualified solar rebate
Residential customers of Alameda Municipal Power can get a small rebate for installing solar panels. You’ll get 500 back for any qualifying solar installation if you earn less than 106,000 and your home was built before Jan. 1, 2020. This incentive is designed to offset any fees involved with installing solar panels.
CleanPowerSF Solar Inverter Replacement Program
The San Francisco Public Utilities Commission and CleanPowerSF are currently running a program to help customers replace old, damaged solar inverters. The program is only available to existing GoSolarSF customers with a solar installation that’s at least 10 years old and no longer covered by warranty.
If your solar inverter needs replacing and you use a participating installer, you can receive up to 3,000 to cover the cost of the replacement.
While the solar inverter replacement program appears to be still active, the CleanPowerSF fact sheet notes that participating installers are current as of May 2022.
Lancaster Energy Power Choice
Residential customers of Lancaster Energy who can’t afford solar panels or don’t want to pay for them can get them installed for free by Tesla with the electric company’s Power Choice program. Tesla will install rooftop solar panels and a Tesla Powerwall Battery for no money at all, and customers will pay for energy usage and storage via their usual electric bill.
However, customers don’t get the tax incentives from the solar panels and can only leave the program by buying out the solar equipment and battery. Also, if a home in the Power Choice program is sold, the contract transfers to the new owner, which could make selling more complicated.
Los Angeles Department of Water and Power Solar Rooftops Program
LADWP’s Solar Rooftops Program gives its customers another way to contribute to solar power generation without spending anything for solar panels. LADWP installs, connects and maintains the solar panels on a homeowner’s property at no cost, and gives the homeowner an annual payment of 240 to 600 each year for 20 years. Customers’ electric bills are otherwise unaffected.
Sacramento Municipal Utility District solar stipend
Along with 7.4 cents per kW back for your surplus solar energy, SMUD also provides a 150 stipend for solar panel installations. The money is targeted to pay for the production meter and other solar equipment for the interconnection, but you’ll need to act quickly. The solar stipend expires on May 31, 2023.
San Diego Green Building Incentive Program
The city of San Diego will waive building permit fees and plan check fees for the installation of residential solar panels.
Silicon Valley Power Low Income Solar Grant Program
Publicly owned Silicon Valley Power.- which mostly serves the city of Santa Clara.- provides grant money for solar panels to residential customers enrolled in its Financial Rate Assistance Program. Eligible customers who own their own solar installations can get 3.50 per watt for solar systems up to 3 kilowatts of power. Solar systems must produce at least 3,800 kWh annually.
SoCalGas Solar Thermal Water Heating System Rebate
SoCalGas customers in Central and Southern California can get a rebate of 5000,500 to 4,000 on qualifying solar water heaters. Your system must have a Solar Uniform Energy Factor of 1.8 or higher, and you’ll need to install a new Energy Star certified water heater along with your solar installation.
Local solar attic fan rebates in California
Many local energy providers offer rebates for energy-efficient appliances, including solar attic fans. These fans usually connect directly to dedicated solar panels to power themselves and cool down attics. Here are the publicly owned electric utilities that are currently offering rebates for solar attic fans.
Azusa solar fan rebate: Customers of Azusa Light and Water can get up to 150 as a credit on their electric bill with the purchase of a qualified solar fan for their attic or home using this application (PDF).
Glendale Water Power solar attic fan rebate: GWP customers who install solar attic fans can get 100 for each, or 125 if the fans were purchased in Glendale. Customers are limited to two rebates every 10 years at the same residence, and can apply for the rebate online.
Gridley solar attic fan rebate: The City of Gridley Electric Utility gives customers
Federal solar tax credits and incentives for Californians
The federal solar tax credit might be more valuable than any of the state and local incentives currently offered in California. It gives you 30% back in tax credit for expenses related to installing solar panels and batteries.
The official name of the federal solar tax credit is the Residential Clean Energy Credit, and though it was expected to expire in 2022, the Inflation Reduction Act extended the tax credit until 2035.
Applying for the federal solar tax credit is simple. Fill out IRS Form 5695 and include it with your tax return for the year in which you installed your solar system, or let the best tax software handle it for you.
The Inflation Reduction Act of 2022 keeps the federal solar tax credit at 30% until 2033, when it will drop to 26%. The credit will further decrease to 22% in 2034 and expire completely in 2035.
The solar tax credit is nonrefundable, meaning the credit you receive cannot be more than the amount you pay in taxes. You can, however, carry over any additional credit beyond your tax burden into future tax years.
.45 per cubic feet per minute back for solar attic fans as a rebate. Fill out the application (PDF) and mail or email it to the electric department.
Imperial Irrigation District solar attic fan rebate: Residential electric customers can get a 125 rebate for solar attic fans using this application (PDF).
Lodi solar attic fan rebate: The Lodi Electric Utility offers a rebate for solar attic fans that’s based on the capacity of your fan.-
Comparing California solar incentives
Values of incentives are based on a national 24,000 solar installation average (5000.99 per watt for a 8kWh system). State property tax is estimated at 1% of home value.
.15 per cubic feet per minute. You’ll need to complete this form (PDF) to apply for the rebate.
Modesto Irrigation District solar attic fan rebate: Residential customers of MID can get some money back (PDF) after purchasing a solar attic fan.- 100 for appliances with 20 watts of power or greater; 50 for fans with 10 to 19 watts. The application form (PDF) must be snail mailed back to the electric company.
Pasadena solar attic fan rebate: If you’re a Pasadena Water Power customer, you can get 80 back on a rebate for solar attic fans, plus another 20 if you purchased the fan in Pasadena. You’ll need to sign into your online account to apply for the rebate.
Riverside solar attic fan rebate: The electric company of Riverside provides a number of rebates for energy-efficient appliances, including solar attic fans. To claim the 100 rebate for a solar attic fan, complete and mail or email this form (PDF).
Ukiah solar attic fan rebate: Ukiah also provides a rebate for solar attic fans based on the capacity of the appliance. The city utility pays
California power purchasing agreements
If you don’t want to install solar panels yourself, a solar power purchasing agreement lets another company install solar on your property then charge you a predetermined amount for that solar energy.
Solar power purchasing agreements are an easy way to get solar power at no cost upfront, but you won’t get any of the tax incentives related to solar panels, and you’ll need to watch out for potential rate hikes over time.
Here are a few of the local public solar power purchasing programs available in California.
Santa Barbara Home Power Program
All Santa Barbara County residents can now get solar power installed in their homes at no cost upfront and without a lien on their property. Instead of paying for solar installations, participants in the Santa Barbara Home Power Program have solar panels installed for free and then pay for the energy generated by them.
The program is only available to residents without existing solar systems. Customers currently pay 24 cents per kWh for the first year of service, with rates increasing 2.9% annually.
Santa Clara Solar Water Heating Program
For homeowners who don’t want to install their own solar water heaters, the city of Santa Clara leases and maintains solar water heating equipment for its residents. Homeowners pay an installation fee and a monthly utility fee for the equipment, and the city takes care of the rest.
.20 per cubic feet per minute. Residential customers can apply for the solar attic fan rebate with this form (PDF).
Community solar programs in California
California has allowed community solar programs by law since 2013. Community solar projects let people use solar energy without installing solar panels on their property. The electricity comes from a large shared solar installation.
California recently passed the Community Renewable Energy Act, a law that aims to make community solar projects more accessible for renters and homeowners who cannot afford solar panels.
The Community Solar Green Tariff program provides a 20% discount on community solar energy for people living in disadvantaged communities. Also, some municipal power companies in California, such as the city of Anaheim, provide community solar discount programs for residential customers.
Florida State Solar Incentives
As of 2023, Florida offers a sales tax exemption and a property tax exemption for solar energy systems. Solar rebates and grants are not currently available in Florida.
The Solar and CHP Sales Tax Exemption
- Estimated savings: Applies to the Florida sales tax or 6% of solar photovoltaic (PV) system costs
- How to claim: One-time incentive that is automatically applied when you purchase a solar energy system
Florida introduced a sales tax exemption for solar energy and combined heat and power (CHP) systems in July 1997. The incentive was originally slated to only last five years, but the state converted the sales tax exemption into a permanent benefit. The sales tax exemption applies to the following:
- The retail rate of solar panels, solar heaters and combined heat and power systems
- It is available for residential, commercial and agricultural uses
Floridians don’t pay sales tax when purchasing a solar energy system, regardless of the size of your system. However, you must use solar equipment certified by the Florida Solar Energy Center to qualify for the exemption. The solar sales tax exemption does not involve a complex process — you are simply not charged the 6% sales tax when purchasing an eligible solar panel system in Florida.
The following table shows how much you could save with the 6% sales tax exemption when purchasing a home solar system in Florida:
The above figures are based on the state pricing data from Ecowatch of 5000.53 per watt of installed capacity.
Property Tax Abatement for Renewable Energy Property
- Estimated savings: Depends on your county’s property tax rate
- How to claim: Your solar system is automatically excluded from your property tax value
Home improvements can increase the assessed value of your property, which normally means you have to pay higher property taxes. However, Florida has the Property Tax Abatement for Renewable Energy Property. so you are not taxed for any increase in home value after installing solar panels. This exemption works as follows:
- Your property taxes remain unchanged if your home becomes more valuable due to a solar panel installation.
- This incentive was introduced in July 2013 and will remain available through December 2037.
So say you own a 400,000 home in a Florida county with a 1.02% property tax, equivalent to 4,080 per year. Even though your home value increases to 425,000 after installing solar panels, your annual property tax will remain at 4,080. Comparatively, another home upgrade of the same value (25,000) would add 255 to your annual tax burden.
Local Solar Incentives
As of 2023, Florida does not have incentive programs covering specific regions or cities, beyond the statewide programs discussed above. So you will not qualify for additional incentives just for living in Orlando or Tampa, for example. The Jacksonville Electric Authority (JEA) used to offer a 4,000 rebate program for solar battery storage systems, but the incentive has been removed from their official website. However, JEA still offers incentives for energy efficiency and solar water heating.
How To Claim Local Incentives
Solar programs are constantly changing, and governments can introduce new incentives at any time. Before installing a rooftop solar system in Florida, check that you are not missing out on any local incentives. You should check trusted references such as city and county government websites and your local utility company website. You can also ask your solar installer since companies keep track of all available financial incentives.
Florida Net Metering Explained
Florida Power Light (FPL) and Duke Energy are the two largest electric utility companies in the Sunshine State, and both offer net metering programs. These utility companies offer net metering for solar power systems up to 2,000 kW of capacity, which is hundreds of times larger than the typical home installation.
The state classifies homeowners who participate in net metering into three tiers based on their solar system capacity. This determines your application fees and insurance requirements, as shown in the following table:
Since home solar systems are typically below 10 kW, most homeowners can participate in Florida’s net metering programs without an application fee or an insurance requirement.
How To Enroll in Net Metering
To participate in a net metering program, solar owners must meet the following eligibility requirements:
- Florida solar panel systems must meet the National Fire Protection Agency (NFPA) National Electrical Code.
- Your system must have a UL 1741 solar inverter capable of disconnecting from the grid during a power outage or a visible disconnect switch.
- You must have a bidirectional power meter installed by the local utility company.
- You must have approval from a qualified local inspector.
If applicable, solar PV system owners must pay the application fee and show proof of liability insurance to participate in net metering. This requirement does not apply to solar systems below 10 kW, which includes most residential installations.
Estimated Solar Savings in Florida
The state of Florida sees abundant sunshine, as you can see in the World Bank Global Solar Atlas. If you click on locations throughout the state, the Atlas shows that each kilowatt of solar capacity generates 1,500 to 1,700 kWh of energy per year. Based on this range, you can expect a 5 kW home solar system to produce between 7,500 and 8,500 kWh of energy, depending on the exact location in Florida.
The U.S. Energy Information Administration reports monthly electricity by state. and the latest data shows an average price of 14 cents per kWh for residential consumers in Florida. Based on this value, a solar output of 7,500 to 8,500 kWh per year could result in power bill savings ranging from 450,050 to 450,190.
Florida residents can expect to pay around 15,180 for a 6 kW home solar system. However, you could get back 4,554 within a year thanks to the 30% solar federal tax credit, reducing your net system cost to 10,626. You can expect a payback period of nine to 10 years, which might seem long at first, but consider that quality residential solar panels have a life expectancy of 25 to 30 years. In other words, the service life of your panels is three times longer than your payback period, after which you’ll see a direct return on your investment.
Georgia’s Solar Energy
The potential for solar energy use in Georgia is dependent upon the amount of sun shining on the earth’s surface called solar insolation. Several factors such as weather patterns, humidity and haze can affect local insolation levels.
As can be seen on this solar map, insolation values in Georgia are significant enough to support solar energy systems in our state, with the southern two-thirds of Georgia having solar insolation values equivalent to most of the state of Florida.
Calculate Your Solar Power
Get an estimate of the amount of energy your solar panels will produce in an annual period.
An uncapped 26% federal income tax credit is available to homeowners for solar equipment placed in service before December 31, 2020. Find information about tax incentives at the Database of State Incentives for Renewable Energy. Please consult your tax advisor to determine how this federal incentive may apply to your particular circumstances.
Georgians may qualify to be eligible for the Federal Solar Tax Credit.
Government agencies and utilities offer a variety of tax credits and rebates. See if you qualify for nationally available rebates or find savings that may be available to you at Energy.gov Tax Credits, Rebates, and Savings.
Georgia Solar Potential
The potential for solar energy use in Georgia is dependent upon the amount of sun shining on the earth’s surface called solar insolation. Several factors such as weather patterns, humidity and haze can affect local insolation levels. However, insolation values in Georgia are significant enough to support solar energy systems in our state, with the southern two-thirds of Georgia having solar insolation values equivalent to most of the state of Florida.
Solar Basics: Learn more about the basics of how solar works from the U.S. Department of Energy.
Solar Research: The National Renewable Energy Lab (NREL) offers research data and information for photovoltaics for homes and solar water heating for homes.
Solar Electric Power Association: The Solar Electric Power Association provides solar info from the utility company perspective.
Cost and Production
PVWatts Georgia: Use the NREL PV watts calculator to estimate the amount of energy your solar panels will produce in an annual period.
Georgia Incentives Rebates
An uncapped 30% federal income tax credit is available to homeowners for solar equipment placed in service before December 31, 2019. Find information about tax incentives at the Database of State Incentives for Renewable Energy. Please consult your tax advisor to determine how this federal incentive may apply to your particular circumstances.
Energy.gov Tax Credits, Rebates, and Savings
Solar Demonstration Project
Housed on the roof of our Georgia Power‘s headquarters, the energy generated by the PV panels is partially offsetting the electricity needs of our corporate headquarters.
REC Disclaimer: A Renewable Energy Certificate (REC), sometimes called a renewable energy credit, represents the renewable attributes of energy produced from a renewable energy facility. RECs are considered a commodity and can be sold or traded separately from the actual energy. Georgia Power purchases only the null energy output from the renewable generating facilities that have contracted to sell energy from their solar facilities through the Large Scale Solar (LSS) program and the initial (2013/2014) Advance Solar Initiative (ASI). The sole ownership of RECs belongs to each generating facility, as specifically stated in each respective power purchase agreement (PPA). The original intent of these programs was to grow renewable resources in Georgia, while allowing the generating facilities to retain the benefits of the RECs. Georgia Power does not report emission reductions from the null energy purchased through PPAs that do not bundle the RECs for sale to Georgia Power.