Unsplash

Market ramp-up

Economic Viability & Business Models

The integration of photovoltaics into agriculture, known as agrivoltaics, offers innovative ways to generate renewable energy while producing agricultural crops on the same ground. This page is dedicated to the economics and different business models of agrivoltaics projects to provide a comprehensive overview for farmers, investors and stakeholders.

Economic Viability

The costs of agrivoltaic systems vary and depend, among other things, on the installed capacity and agricultural management.

The effects on the costs and income of agriculture are also highly dependent on location and system design. The investment costs of agrivoltaic systems tend to be higher compared to interspace PV systems. This is mainly due to the more complex substructure, the use of special modules and the soil-friendly installation. The operating costs, on the other hand, can be reduced as the lease costs are shared and the agricultural business is responsible for maintaining the land. Agrivoltaic systems are particularly economically suitable in areas of agriculture where high costs are incurred for protective devices, which can be replaced by an agrivoltaic system.

Agrivoltaics is thus not only sustainable, but also economical. Discover business models that show how agrivoltaics can be made financially viable:

Agri-photovoltaics: an opportunity for agriculture and the energy transition
A guide for Germany
Cover_Guideline_2022

Business Models

Various business models exist to provide financially viable agrivoltaic systems:

Own operation by farmers: Here, farmers invest in the system themselves and use the electricity generated for their own use or sell it. This model maximizes control, but requires high initial capital.

Lease model: An investor or energy company leases agricultural land to install and operate an agrivoltaic system. The farmer receives a lease payment and may benefit from cheaper electricity.

Cooperative model: Farmers or communities set up a cooperative to jointly invest in agrivoltaics. This model promotes local development and allows members to share costs and revenues.

Public-private partnership (PPP): Public and private actors cooperate to realize agrivoltaics projects. This can facilitate the implementation of large projects and share risks.

Direct marketing model: The energy generated is sold directly to consumers or companies, often via long-term purchase agreements. This model can generate higher revenues, but requires a stable customer base.

Research and demonstration projects: Research institutions and companies test new technologies or cultivation methods. These projects are often publicly funded and contribute to the further development of agrivoltaics.

The different business models are also illustrated in the opposite info graphic.

Business models_Fraunhofer ISE
© Fraunhofer ISE