Solar farms and farmers have historically had a love-hate relationship but that is changing rapidly as farmers embrace the stable income that solar brings. Many states have enacted laws that limit the use of farmland for solar farms after being pushed by conservationists. Michigan, however, just recently had over 5,000 square miles opened up to solar farm development by a new government ruling. Farmers are actually in favor of it because it gives them a new income stream they can rely on.
It isn’t surprising that farmers across the country are now becoming not only accepting of solar farms on their lands, but even evangelical about it. When one considers that farmers have been hit hard over Trump’s trade tariffs it is no wonder they are looking for stable income and solar provides it. In addition to giving them stable energy costs and saving them a ton of money they are actually earning by leasing their land to larger solar farm developers.
This policy to allow commercial solar panel development in Michigan by the Department of Agriculture and Rural Development may set an important precedent that other states can follow. The policy which enrolls 5,300 square miles into the Farmland and Open Space Preservation Program also provides tax incentives that encourages farmers to keep their land for agriculture.
The amount of land involved in this initial enrollment accounts for nearly 10% of the land in Michigan with most of it in the area known as “The Thumb” and the rest in the central part of the state.
Both farmers and solar developers are encouraged to read and fully understand the caveats of the program as outlined below directly from the government PDF of the program:
Pursuant to the Farmland and Open Space Preservation Act, MCL 324.36101 et seq. (the Act) and Paragraph 2 of the Farmland Development Rights Agreement with the Landowner, MDARD, subject to appropriate permitting by the local governing body, may permit structures to be built on property enrolled in the program if the structures are consistent with farm operations. MDARD will work with the local governing body to determine appropriate bonding requirements.
- MDARD has determined that the placement of structures for commercial solar energy generation on property enrolled in the Farmland Development Rights Program is consistent with farming operations and is consistent with the purposes of the statute (MCL 324.36101; 324.36104 and 324.36104(a)) if the following conditions are met:
- An Amended Agreement is entered into by the Landowner for the land where the solar facility is to be located. The Amended Agreement shall extend the existing Farmland Development Rights Agreement for a period of time that is equivalent to the amount of time the land is used to generate solar power combined with the remaining term of the Farmland Development Rights Agreement. This will result in no net change in the length of the Farmland Development Rights Agreement.
- Tax credits are not claimed during the deferment period. The deferment period begins at the time of solar facility’s construction and extends until all commercial solar panels and appurtenant structures are removed. The past seven years of tax credits are calculated at the time the Amended Farmland Development Rights Agreement is recorded and held until the land is returned to agricultural production at the end of the Commercial Solar Agreement. If a landowner chooses to leave the Farmland Development Rights Program at any time during the Commercial Solar Agreement, the calculated seven years tax credits would be payable.
- The site should be designed and planted to achieve a score of at least 76 on the Michigan Pollinator Habitat Planning Scorecard for Solar Sites. The pollinator habitat area must allow for replanting when the usable life of the pollinator habitat expires. The ground cover is to be established and maintained. MDARD expects this will be the Solar Project Company’s responsibility under the Commercial Solar Agreement.
- Any portion of the site not included in pollinator plantings must maintain United States Department of Agriculture -Natural Resource Conservation Service Conservation Cover Standard 327.
Planting standards can be found at: https://efotg.sc.egov.usda.gov/references/public/mi/sow327.pdf and https://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1263169.pdf
- A bond or irrevocable letter of credit as a surety tool is obtained and maintained in an amount sufficient enough to decommission the solar array and return the property to agricultural purposes. The financial surety must be in place for the entire deferment period. The amount of the financial surety shall be calculated by a licensed engineer and approved by MDARD. The surety must be payable to the State of Michigan. MDARD expects this will be the Solar Project Company’s responsibility under the Commercial Solar Agreement.
- Both the establishment and maintenance of the site assures the land can be returned to agricultural uses at the end of the deferment period. Consistent with NRCS policy, an NRCS Certified Prior Converted (PC) exemption for agricultural land will not change if, for some reason, the land under a long-term Commercial Solar Agreement begins to exhibit wetland characteristics. But for those fields that are currently exempt under Parts 303 and 301 of the Michigan Natural Resources and Environmental Protection Act, the drainage infrastructure must be maintained during the deferment period. MDARD expects drainage infrastructure maintenance will be the Solar Project Company’s responsibility under the Commercial Solar Agreement.
- The land is returned to agricultural use at the end of the deferment period and continues to be subject to the requirements of the Farmland Development Rights Agreement. Decommissioning the site must be completed in time for normal agricultural operations for the following growing season.
In all cases, conditions for exiting Farmland and Open Space Preservation Act, MCL 324.36111(a)) shall apply throughout the solar agreement and deferment period.
A Q&A on the use of solar under the program can be found on the MDARD website.
ClearWorld applauds the move by the State of Michigan to encourage solar development as well as provide a way for farmers to add an additional stream of stable income. ClearWorld is a leading provider of patented solar LED lighting systems across the country and expanding globally. Contact us to discuss your commercial solar lighting needs.