Need and financial feasibility of cooperatives to coordinate sheep grazing under solar arrays in the Northeast United States
Agricultural Economics & Community Development
Roberta Severson
Cooperative Development Spec
Ithaca
Abstract
The United States has experienced a significant policy shift towards solar energy as states aim to reduce carbon emissions. Agrivoltatics is a system to pair grazing sheep to control shading of solar arrays to maximize energy production, benefiting both farmers and array operators. Grazing sheep under solar arrays increases farm income through vegetative management services and drives a need for more sheep. The increase in supply calls for a coordinated and collaborative response to maximize farm returns. Negotiating individual contracts at scale is highly inefficient. A cooperative approach can provide significant transaction cost savings. A Qualtrics survey was conducted with useful information collected from 603 farmers from 46 states with primary analysis of 392 farmers in 12 Northeastern states to quantify the need for contract negotiation, insurance, mobilization, and shepherding services. Those already participating in solar grazing demonstrate consistently strong and higher support for cooperative solar grazing services driven by concerns of travel distance to monitor sheep and time and equipment for supplemental mowing. Interest in becoming a member-owner of the cooperative was highest among active solar graziers (65%) and new/beginning farmers to sheep farming (68%). Ten-year financial modeling assumes a base set of input parameters that allows for a detailed analysis of costs of a cooperative to provide such services and identifies minimum lease payment rates required from solar array for financial success. Under the baseline scenario, the minimum lease payment required by the cooperative to provide these services to farmers is $590/acre. Assuming the same lease payment, the individual scenario does not project a positive cash balance until the end of year 6. Results of this work were shared through 3 in-person focus groups and 2 webinars sponsored by the American Solar Grazing Association attended by 120 persons. Survey summary information and guide to organizing a cooperative were shared with trade associations and a database of 900 sheep farmers in 12 states. Farmers suggest the cooperative prioritize contract negotiations and insurance to build trust and confidence of the organization to provide other services in the future.
Authors: Roberta Severson, Todd M. Schmit
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Roberta Severson Cooperative Development Specialist, Cornell University, New York, 14853-7801
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Todd M. Schmit Professor, Cornell University, New York, 14853