By Dan Lemke

One by one, the pickups eased their way up Glen Goblirsch’s rural Springfield, Minn., driveway.

Goblirsch operates an ag supply business selling farm necessities, including seed, fertilizer — even tractor autosteer systems — so visitors aren’t uncommon.

However, on this summer night, Goblirsch’s fellow farmers had their eyes peeled on the new addition to his machine shed roof.

Spanning nearly the entire south-facing roof is an array of solar panels that converts the sun’s rays into electrical energy.

“I wanted to invest in something that doesn’t involve more of my time,” Goblirsch says. “With solar, there’s no chores and no extra work. Two things that I have that pay without involving more work are my field tile and my solar.”

Goblirsch installed the 30-kilowatt system in December 2017. His farm will use most of the energy the array produces, while extra power can be sold back to his rural electric cooperative.

Solar growth
According to the Department of Commerce, Minnesota has about 714 megawatts (MW) of installed solar energy capacity. That number is projected to reach 1 gigawatt (1,000 megawatts) by the end of 2018. While solar energy only provides about 1% of Minnesota’s total electricity generation, solar photovoltaic was the fastest-growing contributor to Minnesota’s renewable energy portfolio in 2017.

Large utility-owned arrays and community solar gardens are the largest contributors to that growth, and on-farm solar arrays are on the increase.

“There is interest in on-farm solar,” says Fritz Ebinger, Clean Energy Resource Teams (CERTs) Rural Energy Development program manager for the University of Minnesota’s Regional Sustainable Development Partnerships and Extension. “But that interest does fluctuate with farm income levels.”

Ebinger says interest in on-farm solar is strongest on livestock farms where energy demand is high. Dairies and hog operations require large amounts of energy, so offsetting electricity costs can provide a boost to the bottom line. Those financial benefits are equally attractive to grain farmers.

“Choosing to install solar is a business decision with great environmental side benefits,” Ebinger says. “Most of the decisions to install solar are based on finances and economics. Farmers want to take control of their input costs for the long term.”

Farm interest
Ralph Kaehler, a farmer from St. Charles, Minn., and business developer for Novel Energy Solutions, says farmers of all types increasingly recognizing solar energy as a business opportunity. NES has installed more than 100 solar systems since it was first established in 2012.

“Ten years ago, if you talked to farmers about solar, they would say it was too expensive and that they weren’t hippies,” Kaehler says. “There’s been a paradigm shift to where they now see it as an economic opportunity while helping the environment, rather than seeing solar as a cost.”

Kaehler says farmers can invest money that would be spent on taxes and utility bills on the installation of a solar array. He says space availability, energy use and tax appetite are primary farm considerations.

“When done properly, it’s zero dollars of new spend,” Kaehler contends. “It’s money that was going to go to the government in taxes and to the utility company. Right now, farmers are renting electricity for life. The price always goes up, and they end up with zero assets. With solar, farmers make the investment. Once the array is paid off, they own the array and don’t have to pay for the electricity anymore.”

Current tax laws are favorable for solar array installation, too. There is a 30% federal investment tax credit on solar equipment. Energy property also qualifies for a five-year accelerated depreciation of 22% under federal tax law.

“Over half the cost of an array is offset with money that would go to taxes,” Kaehler says.

A typical on-farm array is a 40-kilowatt (kW) system that produces about $415 per month at 10 cents per kilowatt-hour (kWh) electric price, Kaehler says. This is the maximum size for net metering with rural electric coops. A 40 kW array costs about $130,000 to install with 100% financing — less if farmers do a cash purchase.

Solar arrays have very few moving parts, so they can last up to 40 years. Kaehler says the systems NES installs typically are immediately cash-flow-positive if systems are 100% financed, or have a payback time of eight to 12 years if farmers pay cash. They are guaranteed to run at 80% of their installed capacity 25 years after installation.

A 40-kW solar system requires about a quarter of an acre. In many cases, arrays are installed along field edges or near barns, he adds.

“It’s a new crop. It’s not taking any land out of production. In fact, around hog barns it’s using non-revenue-generating field edges, generating $5,000 a year on that quarter-acre,” Kaehler says.

Arrays up to 40 kW are eligible for net metering with electric co-ops, while investor-owned utilities allow up to 1 MW for net metering. This means that the excess production that goes onto the grid during the day can be taken back off the grid at the same price per kilowatt-hour, provided systems stay under the size limitations. Kaehler says the vast majority of arrays are sized to meet a farm’s electrical load and aren’t involved with net metering.

Economic and social considerations
In the past, solar was touted as a way to reduce climate impact. Now solar is seen as a good investment that helps farmers do what’s right. Because ground-based arrays must be spaced far enough apart to prevent shadows from covering other panels, there’s enough room to incorporate gardens or pollinator habitat between the rows.

“Social benefits are frosting,” Kaehler adds. “Those benefits used to be what solar was selling, but at a high cost. Now it’s a good financial decision. There’s nothing wrong with doing what’s right and making money.”

Ebinger works with farmers to determine barriers and benefits to installing solar. He says being smart about energy management with efficiency and then sizing a solar array to meet the farm’s load is the most effective route to travel.

“Farmers can sell excess electricity back to their provider at a premium,” Ebinger says, “but they certainly won’t be able to retire on it.”

Goblirsch had pondered investing in a solar system for several years. For him, taking the plunge made sense.

“Energy prices are always going up, so I see this as a good Investment,” he says.

Working with rural electric cooperatives
Farmers who are interested in installing solar photovoltaic systems that will supply more than their own power needs are encouraged to start conversations with their energy provider early.

“The best tip is to communicate early and often with the rural electric cooperative,” says Ebinger .

Excess energy produced by renewable energy systems can be sold back, often at a premium. Ebinger says state law allows rural electric cooperatives to charge a “grid access fee” to avoid cross-subsidization from co-generators to other co-op members to make sure co-generators pay their fair share for the wires, poles, transformers and labor for providing firm power.

State law also requires rural electric cooperatives to purchase all the net excess generation from a qualified facility that’s under 40 kW at the average retail rate applicable for that class of customer to allow for net metering. Accordingly, farmers buy and sell what they produce at the same price.

Beyond that, Ebinger says, there are standard interconnection procedures, a standard state contract and a state electric code that must be considered. Because those requirements can be complicated, early communication with providers can help smooth out the process.

Lemke writes from Eagle Lake, Minn.