Estimating the economics and adoption potential of agrivoltaics in Germany using a farm-level bottom-up approach

This article presents the first bottom-up assessment of the economics and adoption potential of agrivoltaics (AV) using national farm accountancy data in Germany. A recently developed framework for the economic assessment of dual land-use systems is applied to estimate a national AV electricity supply curve. The estimation accounts for economies-of-scale, regional variation in solar radiation, and farm-specific agronomic effects. The results demonstrate that solar radiation and investment costs are key determinants. Agronomic costs from crop shading and land losses have a small impact, but differences between farm-type and regions can be observed. Accounting for economies-of-scale favors farms endowed with large arable land area, which are predominantly specialist field crop and other livestock farm types found in Eastern Germany. In absence of economies-of-scale, early adopters are largely specialist milk or other livestock farm types located in Southern Germany. In presence of economies-of-scale and at an electricity price of 8.3 EUR-cents kWh-1, the 10% most cost-efficient farms could meet 8.8% of Germany's total electricity demand on about 1% of arable land. The results show that substantial policy-support is required to make AV competitive with ground-mounted photovoltaics, particularly if economies-of-scale cannot be realized. Adequate policy designs are needed to safeguard AV's land-efficiency advantage, as most farmers would be incentivized to abandon farming beneath the AV system.

Automated summary

This article assesses the economics and adoption potential of agrivoltaics using national farm accountancy data in Germany. The results show that solar radiation and investment costs are key determinants, and economies-of-scale favor farms with large arable land area. Policy support is needed to make agrivoltaics competitive and ensure its land-efficiency advantage.