A new study led by Virginia Tech reveals that solar farms can significantly increase the value of nearby agricultural land while causing a slight dip in residential property values. The research aims to guide better community planning and dispel common misconceptions about solar energy.
As the adoption of solar energy accelerates across the United States, a crucial question has emerged: How do solar farms impact nearby property values? A recent study by a team of researchers at Virginia Tech and the University of Rhode Island reveals that the impact varies depending on the type of property.
Led by Zhenshan Chen, an assistant professor in Virginia Tech’s Department of Agricultural and Applied Economics in the College of Agriculture and Life Sciences and the study’s corresponding author, the research team conducted an extensive analysis involving nearly 9 million property transactions near 3,699 large-scale solar photovoltaic sites.
This allowed them to assess property values from 15 years prior to the construction of solar installations through to 2020.
“As the U.S. scales up renewable energy, solar installations are increasingly being sited near homes and on farmland, and this often leads to push back from residents worried about aesthetics or property value loss,” lead author Chenyang (Nate) Hu, a doctoral graduate in economics from the Department of Agricultural and Applied Economics, said in a news release. “Until now, much of this discussion has been based on anecdotal evidence.”
The study, published in the Proceedings of the National Academy of Sciences, found varied results for different types of properties.
Agricultural and vacant land within two miles of a solar site saw a substantial 19.4% increase in value, which indicates a rising value for land with high potential for future solar leasing.
Conversely, residential properties within three miles of a solar installation experienced a slight decrease in value, averaging a 4.8% drop.
“This negative impact also decreased with distance from the site, time since the installation was built, and did not affect residential homes on lots larger than five acres,” added Chen. “Site visibility from the property didn’t significantly impact the cost.”
The data suggests that the slight decline in residential property values could be more related to perception than actual physical harm.
“The negative residential impacts appear to stem more from perception or a stigma effect than from any physical harm,” Hu added. “Interestingly, these effects are much smaller or even reversed entirely in counties that are politically left-leaning.”
The findings are significant as they address one of the most commonly cited drawbacks of large-scale solar adoption. They also offer crucial data for policymakers, developers and local communities to foster better decision-making around solar development.
“In this study, we provided a very general quantification of the property value impacts, and we anticipate more similar works in specific contexts,” Chen added. “Ideally, policymakers, developers and local communities could absorb such information and organize meaningful discussions on how such problems could be addressed.”
The researchers hope this study will lead to smarter community planning and give residents a greater voice in how nearby solar installations are built.
“I hope this work helps improve how solar projects are planned and approved by providing data that shows where and how local impacts are most likely to occur,” Hu added. “Ideally, developers and local governments can use this information to make siting decisions that minimize disruption and to respond more directly to community concerns.”
Co-authors of the study include Wei Zhang, Xi He and Darrell Bosch from the Department of Agricultural and Applied Economics and Pengfei Liu from the University of Rhode Island.
Source: Virginia Tech