As solar energy expands across farmland and rural landscapes, so do concerns about how it affects nearby property values. A new national study from the Department of Agricultural and Applied Economics reveals that the impact depends on what kind of land you're talking about — and who’s looking at it.
The team analyzed nearly 9 million real estate transactions near 3,699 large-scale solar installations across the U.S. with the goal of quantifying how solar farms influence surrounding property values.
“As the U.S. scales up renewable energy, solar installations are increasingly located near homes and on farmland, often leading to pushback from residents,” said lead author Chenyang (Nate) Hu, a recent Ph.D. graduate. “Until now, much of the discussion has been anecdotal.”
Using a national model of solar visibility and a rigorous econometric approach, the team compared sales data from up to 15 years before solar farm construction through 2020.
The results were mixed. Agricultural and vacant land within two miles of solar farms saw a 19.4 percent increase in value.
“This suggests the market values land with potential for future solar leasing,” said Zhenshan Chen, assistant professor and corresponding author.
Residential property values, however, dropped slightly. Homes within three miles of a solar farm experienced an average 4.8 percent decrease, though that effect shrank with distance and time, and disappeared entirely for homes on lots over five acres.
Surprisingly, just being able to see a solar site had no significant effect on price.
“The negative residential impacts appear to stem more from perception or a stigma effect than from any physical harm,” Hu said.
The effect was also less pronounced — or even reversed — in politically left-leaning counties.
The study, published in Proceedings of the National Academy of Sciences, offers one of the most comprehensive looks yet at the real estate impacts of solar farms.
Chen hopes the findings will help local governments, developers, and communities make more informed decisions.
“We provided a general quantification of the property value impacts, and we anticipate more studies in specific regions,” he said.
Hu added that the research could help improve solar siting and community engagement.
“Ideally, developers and local governments can use this information to minimize disruption and respond to concerns with real data,” he said.