CLARK COUNTY— When Max Zimmerman first received pamphlets and postcards urging him to lease some of his farm ground for solar developments, he laughed and threw them in the trash.
“It just didn't make any sense to me,” he said. “I never heard anything about solar. To me, it sounded like some type of scam.”
Fast forward today, and the former Clark County farmer now has 500 to 600 acres contracted with two solar developers for pending projects – and he couldn’t be happier.
Zimmerman will earn far more from those lease payments than what he makes renting the ground to other farmers, he said. It’s also a guaranteed income for the next 30 years.
“When they came to us with leases about four times what we're getting out of cash rent, it made sense,” he said.
Zimmerman is far from alone. More farmers and landowners than ever say they are actively in conversations with solar companies regarding land leases, according to the most recent Purdue University Ag Barometer released earlier this month.
The survey found 20% of U.S. farmers have had those discussions in the last six months, up for just 10% in February. That’s the highest number since the survey started asking the question in 2021.
Jim Mintert, the director of Purdue’s Center for Commercial Agriculture who oversees the ag barometer, said there’s a simple answer for the recent spike in interest: money.
Solar developers are offering higher land-lease rates to lure farmers into contracts as demand for alternative energy grows. In 2021, 27% of farmers said leasing agents offered $1,000 or more per acre. Over the last two months, over 55% of farmers reported receiving the same offer.
That comes as farm profitability is projected to take a 25% nose dive this year, with U.S. growers making $40 billion less than last year, according to the U.S. Department of Agriculture’s latest Farm Income Forecast.
That’s the largest year-to-year dollar decrease on record. The drop is due in part to slumping crop prices combined with inflation-driven cost spikes on fuel, fertilizer, equipment and other farm essentials.
Add it up, and more farmers in Indiana are considering leasing property for solar projects in an attempt to offset what will likely be paltry profits this year, argued Zimmerman.
“They're looking at all this and saying, ‘If I can take 25% of my cropland and put it into something like this and have a steady income for 30 years, my bank would love that and my family would be better off down the road,’” he said.
Andy Tauer, Indiana Farm Bureau’s director of public policy, said Hoosier farmers reported an uptick this spring in activity from solar companies seeking out landowners to lease ground.
He agreed the higher leasing rates are generating more interest in solar, noting top-shelf offers are far higher than the average return on corn and soybeans right now.
“Given the current economic forecast, a lot of it's driven from the financial side of the house,” Tauer said.
But whether Hoosier landowners’ piqued interest is actually translating into more farm ground being contracted for solar is a question mark, explained Mintert with Purdue.
Although long-term land leases must be filed with counties, no one is keeping tabs on those leases across the state, he said. That makes determining the impact of solar companies’ recent push hard to calculate.
“We've thought about trying to collect that data, and it's not an easy thing to get your hands on,” Mintert said.
Zimmerman said in Clark County and the surrounding area, more landowners are talking with solar companies as they become educated about the benefits of the renewable energy source.
Farmers who don’t have children who want to take over the operation can lease the ground for solar projects to ensure it still earns an income far into the future, he noted. That’s a major reason why Zimmerman decided to sign up – to protect the land that’s been in his family for well over 100 years.
“I'm looking at the benefits for my kids and their families,” he said. “We know there'll be some farm ground here in 30 years when the lease is up that may not have been here if it wasn't for solar.”
Whether the historic interest from farmers stays high is unknown, but it seems unlikely it will diminish in the coming years, noted Tauer with Farm Bureau.
Federal regulators continue to issue more mandates to utility companies to diversity their energy portfolios with renewables, while also offering lucrative tax incentives for solar projects.
Meanwhile, companies like Meta, which owns Facebook, have also pledged to use only renewable energy by 2030 for its production and services. The company is building a massive, $800-million data center in Jeffersonville, near where Zimmerman owns land.
All that creates strong demand for more solar – and more farmers willing to lease their land to make those projects a reality, Tauer explained.
“I think there's going to continue to be growing interest both from consumers, landowners and utilities,” he said. “I fully anticipate we're going to continue to have these conversations throughout many of our communities across Indiana.”
