A new Policy Study from The Heartland Institute details the major problems caused by the construction of industrial solar facilities and offers legislators solutions they should consider to prevent large scale solar development in their states.
In “How States Can Push Back Against the Destructive Expansion of Industrial Solar Power,” the authors relay how industrial solar has seen a dramatic increase in development in recent years, mostly due to “government regulations, subsidies, and other incentives.” Installation of industrial solar increased by 33 percent alone between 2023 and 2024. However, the problems stemming from these installations are myriad, and the study lists five separate areas of major concern.
The first is the substantial land use requirements of industrial solar facilities and their destruction of productive farmland. “A conservative estimate for the footprint of industrial solar is approximately 10 acres for every megawatt of electricity produced,” the study notes. “To meet the renewable electricity goals established by global, national, and state-level authorities, a comprehensive study by the U.S. Department of Energy (DOE) estimated that industrial solar is projected to require 5.7 million acres of land by 2035, and 10 million acres by 2050—covering approximately 0.5 percent of the contiguous United States.”
Half a percent might not seem like much, but in reality, it is approximately 15,600 square miles, which is roughly the size of Connecticut, Delaware, and New Jersey combined.
Most of this solar development—70 percent of all industrial solar installations between 2009 and 2022—was installed on agricultural land, and there are estimates that 83 percent of future development will also be installed on crop or range land. “Solar installations effectively remove land from agricultural use for decades, as solar panels typically last only 25 to 30 years,” the study states. “As more productive farmland is converted for this purpose, local farming communities could be devastated, and overall food production and security could be threatened.”
The authors also point out that “industrial solar development is tremendously damaging to the environment and ecological habitats. Repurposing the vast amount of land industrial solar facilities require often destroys entire wildlands and wildlife habitat, disrupts migration patterns, and compromises animal and plant populations… In addition to these problems, industrial solar panels and batteries create a substantial amount of highly toxic waste, which carries its own set of environmental impacts.”
What’s more, much of the mining of the raw materials used in solar panel production involves child labor in the Democratic Republic of the Congo and Madagascar, while the production of the panels themselves involves slave labor from communist China. “Nearly half the world’s polysilicon—the most common material used to construct solar panels— comes from Xinjiang, China, where systemic forced labor is prevalent,” the report notes. “In Xinjiang, Uyghur Muslims and other ethnic minorities are coerced by the Chinese government to manufacture myriad products, including polysilicon. According to the Center for Strategic and International Studies, ‘between 2010 and 2020, China’s share of global polysilicon production increased from 26 percent to 82 percent.’ Today, nearly every solar panel made from silicon is likely to have been sourced from Xinjiang.”
The study also details how solar’s intermittent nature can lead to the instability of electrical grids. Utilities are trying to achieve “net zero” emissions by transitioning away from reliable, “dispatchable” power sources to unreliable “non-dispatchable” green power sources. “Dispatchable” power sources are those that can adjust to the electric grid on demand, such as a natural gas turbine, a coal plant, a hydroelectric dam, or a nuclear plant. Non-dispatchable power sources, such as solar and wind, cannot be turned on or off to meet demand and are highly intermittent. They are not continuously available 24 hours a day because of factors that cannot be controlled—such as cloud cover, daylight, wind speed, air density, and other variables—and are therefore unreliable.
While replacing a megawatt of electricity generation from, say, a coal plant with a megawatt of generation from a wind or solar source may appear to be an apple-to-apple swap, that is not the case. This is due to capacity factor, the measure of how often a power plant runs for a specific period of time, expressed as a percentage and calculated by dividing the actual unit of electricity output by the maximum possible output.
According to the U.S. Energy Information Administration, solar had a capacity factor of just 22 percent in 2023, while wind’s capacity factor was just 33 percent. Comparatively, the capacity factor for nuclear was 93 percent in 2023, while natural gas had a capacity factor of 58 percent, and coal 42 percent. So, a megawatt-to-megawatt swap from a dispatchable power source to these non-dispatchable sources results in a decrease in overall capacity. As more dispatchable sources of the grid are swapped for non-dispatchable sources, the grid becomes less reliable.
Among the primary policy solutions the study puts forward for state lawmakers is an appeal for them to—if they live in a state that has one—seek a repeal of renewable portfolio standards, also known as renewable energy mandates, which “require electric utilities to source a specified percentage of their electricity from renewable sources such as solar, at rates often far higher than the competitive market rate. These costs are ultimately passed on to ratepayers.”
The study also urges lawmakers to repeal any special financial incentives for solar development in their states, such as grants, loans, production-based payments, property tax abatements, rebates, direct subsidies, and tax credits.
Beyond this, state legislators should also consider taxing farmland being used to house industrial solar facilities at the industrial rate rather than the agricultural rate.
“Some states have ‘current use taxation’ policies in place that incentivize landowners to keep their land underdeveloped and used for a beneficial purpose, such as agriculture or forestry,” the study states. “Under such policies, landowners are subject to exit tax penalties and higher tax rates if they convert their land from beneficial use. However, many other states have no such laws in place, potentially allowing landowners to reap the benefits of lower tax rates while simultaneously receiving rent from solar companies that erect industrial facilities on their former farmland.”
Ensuring that this now-industrial land is taxed at the appropriate rate would “likely reduce the appeal of converting farmland for industrial solar use, thereby minimizing the negative environmental and economic effects of additional solar development.”
State legislators should also look to reform their state’s net-metering policies. Under current law in most states, households with their own electricity generation source, also called “distributed generation,” can sell the excess, unused electricity they generate back to their utility company’s grid. The utility company can then re-sell this electricity to other customers. Distributed generation usually comes in the form of rooftop solar panels. Net metering is the billing mechanism that measures this excess electricity. Often, this excess electricity is sold back at the retail-price rate.
Currently, because utilities must pay the retail price for electricity instead of the wholesale price, it means distributed generation customers are getting reimbursed not only for the electricity they provide but also for the costs associated with building and maintaining the electric grid. As a December 2013 paper from the Harvard Business Law Review Online noted, “net metering causes a re-allocation of transmission, distribution, and reliability costs to those customers who do not own distributed generation.”
Such cost-shifting impedes social equity, because rooftop solar owners have generally higher incomes than others, so lower-income ratepayers end up paying extra to subsidize higher-income customers. Thus, net metering is just another welfare program for the upper-middle class.
The study also recommends requiring homeowners and businesses that install rooftop solar systems to “pay for the costs associated with the installation, maintenance, and regulation of their two-way systems,” which would “ensure that all electric power users pay their fair share to maintain and operate the grid, without socializing the burden of additional costs to other ratepayers.”
Finally, state lawmakers should ensure their state has strong anti-environmental, social, and governance (ESG) scoring system policies on the books to prevent coercion from private sector global asset management companies that force utilities and state pension funds to invest in and adopt industrial solar.
This can be accomplished by restricting “state pension funds from investing in ESG funds or using ESG criteria in their risk assessments. Second, they can prohibit state or local government contracts with companies that boycott hydrocarbon-based energy sources or pressure utilities to pursue solar energy sources. Third, they can prevent financial institutions from discriminating against customers based on political considerations, thereby ensuring fair access to financial services.”
“The extensive problems associated with the expansion of industrial solar power have incited growing resistance from the American people at local levels of government,” the study concludes. “Local policymakers cannot solve the problem on their own, however, and often do not possess the authority to do so, as opposed to state policymakers. Though the rapid growth of industrial solar power in the United States has been driven in part by federal regulations and incentives, state-level policies often play an equal or even more critical role in sustaining and expanding the solar industry. State policymakers interested in leveling the energy playing field, curbing industrial solar development, or eradicating the solar industry from their state altogether have several options they can consider.”
Heartland Impact can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact Cameron Sholty, at csholty@heartlandimpact.org or 312/377- 4000.
