Preserving agricultural land with agrivoltaic – But at what cost? An economic analysis of different agrivoltaic systems in Germany

Agrivoltaic systems have been advocated for their potential to reduce land use conflicts, as they enable the combined production of food and electricity on the same land. This paper determines the additional costs of agrivoltaic systems over conventional ground-mounted photovoltaic facilities on farmland and relates the extra cost to the amount of land saved, yielding an estimate of the costs of preserving farmland with agrivoltaics. The analysis is based upon extensive data collection from project developers as a basis of the cost calculations for various agrivoltaic and ground-mounted photovoltaic systems and system sizes. Net returns from farming under the agrivoltaic systems are credited against the costs of these systems. The levelized costs of electricity generation (LCOE) of agrivoltaic systems are significantly higher than those of ground-mounted photovoltaic systems. Depending on the agrivoltaic system type and scale, the additional costs range from 4 % to 148 % of the LCOE of ground-mounted photovoltaic systems. Agricultural production usually has little impact on overall profitability of the AV systems examined. When relating the additional costs of the agrivoltaic systems to the saved farmland area, the annual costs of preserving one hectare of land range between €8000 and €26,000 per ha and year for medium-sized, low-mounted agrivoltaic systems and between €42,000 and €75,000 per ha and year for high-mounted agrivoltaic systems. This is many times over the potential net returns from agricultural production on the land area saved. Given these findings, the meaningfulness of financial support for agrivoltaics, as offered by the German government, must be called into question.