A Cost-Benefit Analysis of Pollinator-Friendly Solar in Minnesota
As utility-scale solar development expands throughout the United States, with an expected land footprint of 3 million acres by 2030,1 there is growing interest across various stakeholder groups in adopting land use best practices for new projects. Pollinator-friendly solar, which incorporates native grasses and wildflowers throughout a solar installation, is one approach to cultivating additional land use benefits from solar projects. The practice is increasingly common, especially in Minnesota, the first state to adopt a voluntary pollinator-friendly solar standard. However, research has yet to produce a comprehensive cost-benefit analysis that assesses both private and social returns from pollinator-friendly solar, as compared to conventional solar or pre-existing agricultural land uses.
To conduct a cost-benefit analysis of these three land uses in Minnesota, we developed a solar project finance model alongside a farm cash flow model. The model incorporates environmental externalities — including carbon emissions, soil erosion, and groundwater recharge — associated with land devoted to conventional solar, pollinator-friendly solar, and farming.
Our analysis reveals that pollinator-friendly solar may generate private benefits to solar developers that justify its adoption without policy intervention. These benefits largely flow from higher energy output, from panel efficiency gains attributed to the cooler microclimate created by perennial plantings. A small added benefit accrues from the lower operations and maintenance (O&M) costs over the project lifetime thanks to the reduced frequency of mowings for native plants as compared to turfgrass. However, we hypothesize that information and behavioral failures are currently preventing developers from adopting the practice. Thus, there may be a role for policy to spur the incorporation of pollinator-friendly practices in future solar development.
That role becomes clearer when we evaluate the social benefits associated with these projects. As with conventional solar, a large social benefit of pollinator-friendly solar stems from the carbon emissions that solar energy production avoids. Pollinator-friendly solar also results in more groundwater recharge and a greater reduction in soil erosion than either conventional solar or farming — two additional ecosystem benefits. Lastly, pollinator-friendly solar contributes another sizable social benefit in the form of increased crop yields when projects are sited near pollinator-dependent farmland. In our model, improved crop yields result from projects co-located with farmland producing soy, but not corn, which is not pollinator-dependent. That benefit could be even greater if the adjacent crop were highly pollinator-dependent, as is the case for most specialty crops.
The added social benefits that pollinator-friendly solar contribute relative to conventional solar and farming warrant policy intervention. Governmental research and development funding could help support studies that are underway with a goal of providing more detail on the localized impacts of this practice. Research is needed to better understand the panel efficiency gains and potential private benefits, as well as the social benefits flowing from the ecosystem services that pollinator-friendly solar projects provide. Additionally, site-specific policies, which would drive maximal benefit from increased crop yields and ecosystem services, merit consideration. These policies could be targeted at either a solar developer or a farmer: states could provide extra incentive for developers to site their pollinator-friendly projects near specialty crop farms, or they could educate farmers and incentivize them to grow specialty crops if their land abuts a pollinator-friendly solar site.
As Minnesota pursues its renewable portfolio standard target of 10% of energy produced from solar by 2030, there is large potential for pollinator-friendly solar development to deliver ecosystem and agricultural benefits for the state, in addition to the zero-carbon electricity generation that a solar project already provides. Our research shows that pollinator-friendly solar yields benefits for a range of stakeholders, from developers to farmers to surrounding communities. In the near term, there are opportunities for research and education to generate a more robust understanding of the practice, and in the long-term, the environmental and social externalities could be monetized and captured by astute policymakers.