Solar Farms Raise Nearby Farmland Prices in New York

By Blake Jackson

A Cornell study reveals that New York state’s legislative support for solar energy has influenced farmland values, producing both benefits and challenges for stakeholders.

The research indicates that following the 2015 legislation promoting large-scale community solar farms, farmland within two miles of energy infrastructure increased in value by 15% to 18% compared to more distant parcels. This rise reflects the potential of such land for solar development but may discourage traditional farming uses.

“Landowners could see the higher prices as a positive, but there may be cascading negative effects on tenants and communities,” said Wendong Zhang, associate professor in the Charles H. Dyson School of Applied Economics and Management at Cornell SC Johnson College of Business.

“It’s important to think about balancing the development to achieve the state’s energy and emissions reduction goals with potential impacts of the loss of agricultural land to solar.”

Agricultural land near substations or transmission lines is often ideal for solar projects, offering farmers steady income through leases. However, this shift can disadvantage renters, farm workers, and prospective farmers, potentially reducing food security and productivity.

“More expensive farmland is bad news if you are trying to buy land for agricultural purposes, but good news if you are the seller,” said Ariel Ortiz-Bobea, associate professor in the Dyson School.

Analyzing nearly 12,000 land transactions from 2007 to 2021, researchers found that prices rose after the Shared Renewable Program in 2015 and subsequent solar-supportive policies.

“We argue that an increase in land value is not necessarily about whether you have a solar farm nearby. What matters is whether you are in the corridor for transmission lines or within areas very close to electricity substations,” Zhang said.

The study also found higher electricity prices correlated with larger increases in land values, particularly near substations, where prices rose 20% to 22%. Zhang noted that the fast expansion of large-scale solar projects in New York could further amplify these effects.

“As our energy system transitions toward renewables, states can proactively design policies to manage the unintended consequences emerging from rapid renewable deployment and legacy infrastructure,” Ortiz-Bobea said.

“State policy is probably the most important driver of solar placement, so this provides an understanding of the impacts for policymakers,” Zhang added. Researchers plan to examine how similar legislation affects solar development in other regions.

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