Rising Solar Lease Rates Impact Farmland Values in West Lafayette, Indiana

As indicated by a decrease in the April reading of the Ag Economy Barometer, farmers in West Lafayette, Indiana are showing concern for the financial performance and value of farmland. The barometer dropped 15 points to its lowest reading since June 2022.

A growing interest among farmers in using farmland for solar energy production is contributing to this concern. Solar lease rates are on the rise, as evidenced by a recent report. Despite expectations of weaker financial performance compared to a year ago, some farmers remain optimistic about farmland values in the coming year.

According to a survey of farmers, 8% of those who expect farmland values to rise in the next year pointed to energy production on farmland as a contributing factor. However, only 19% have discussed leasing their farmland for solar energy production with a company.

Discussions around solar leasing indicate that there is increasing demand for solar leases, with 58% of farmers reporting lease rate offers exceeding $1,000 per acre. This is an increase from 54% in March, suggesting that rising lease rates for energy production could be impacting farmland values in certain areas.

For more information on this topic and to read the complete report, visit https://tinyurl.com/ykmj9x5w.