1 Risk and Returns: Economic Drivers of Agrivoltaics Adoption in the U.S. Midwest

Utility-scale solar expansion across U.S. croplands is intensifying food–energy land-use conflicts, particularly in the Midwest. Agrivoltaics (AV), the co-location of photovoltaic systems with agricultural production, offers a potential land-use solution, but its scalability depends on farmer adoption. This study examines how financial incentives, operational requirements, and behavioral factors shape AV adoption decisions using a discrete choice experiment with 177 farmers across 12 Midwestern states (708 choice observations). The experiment evaluates attributes that directly affect farm profitability, risk exposure, and management complexity, including lease payments, income variability, land share under panels, and requirements for new equipment or crop switching. We model adoption as a joint discrete–continuous decision, capturing both the likelihood of adoption and the extent of land allocation to AV. Results show that higher lease payments significantly increase both the probability of adoption and land allocation, highlighting the importance of stable and attractive compensation. In contrast, operational complexity, particularly requirements for new equipment, reduces adoption and generates substantial implicit costs in willingness-to-accept (WTA) estimates. Behavioral characteristics also matter: farmers with higher discount rates are less likely to adopt, whereas risk-tolerant farmers are more willing to participate. Latent class analysis further reveals substantial heterogeneity, distinguishing a majority of low-propensity farmers with little likelihood of adoption from a smaller AV-responsive segment whose adoption is more sensitive to lease compensation. Overall, the findings suggest that financially attractive and operationally simple AV contracts will be critical for scaling adoption while preserving agricultural production.