A new study from a Virginia Tech-led team of researchers explores how large-scale solar power plants affect the value of agricultural and residential properties.
Researchers analyzed millions of real estate transactions around thousands of utility-scale solar facilities nationwide.
They found that the construction of a solar facility increased the value of nearby agricultural and vacant land by 19% on average, while the value of nearby residential properties saw an approximately 5% temporary decrease.
The study joins a growing body of research that has yielded mixed findings about solar facilities’ impact on property values. And as a nationwide study, the research wasn’t designed to uncover trends specific to Virginia.
Further, in an interview, a researcher from the Virginia Tech team offered possible reasons for the findings but cautioned that the study doesn’t necessarily point to definitive conclusions.
Nonetheless, the work puts another set of data behind an assertion that often comes up in discussions about siting utility-scale solar: that it does, indeed, impact nearby property values.
“We cannot just dismiss those impacts,” said Zhenshan Chen, assistant professor of agricultural and applied economics at Virginia Tech. “Instead we need to actively manage it. Policymakers, solar developers and communities, arguably they all have some interest in this message.”
For example, Chen said, a community should be aware that an increase in agricultural land value could lead to an increase in rent for farmers who work that land but don’t own it.
Chenyang (Nate) Hu, who recently earned his Ph.D. in economics from Virginia Tech and was the study paper’s lead author, noted that while many people associate large solar facilities with rural areas, often such facilities are built on high-value farmland not far from metropolitan areas.
Hu said that policymakers could focus on legislation and incentives to encourage development in areas other than on prime farmland — for example, on brownfields, which are parcels of previously developed, abandoned land that often require expensive cleanup and rehabilitation before they can be used.
The U.S. Environmental Protection Agency has a program providing financial assistance for brownfields cleanup, but siting a solar facility on a brownfield would still be expensive for a developer, Hu said.
“EPA should really think about how to promote clean energy and provide more tax credits for cleaning up brownfields,” he said.
Large-scale solar has been a contentious topic across Virginia, particularly since the 2020 passage of a law that mandates that Dominion Energy and Appalachian Power, the state’s two largest electric utilities, achieve carbon-free generation portfolios by 2045 and 2050, respectively. The law includes targets for new solar power.
[Disclosure: Dominion is one of our donors, but donors have no say in news decisions; see our policy.]
Supporters of solar say it can help meet demand with zero-carbon renewable energy while providing revenue to local governments and income to landowners who sell or lease their property to solar developers.
Opponents of solar often cite concerns over rural aesthetics, the availability of agricultural land, the environment — and the impact on property values. Local governments in recent years have increasingly resisted new solar, whether by denying individual proposals or by enacting restrictive regulations.
Researchers analyzed millions of real estate sales to assess solar sites’ impact
The study began about two years ago. The team consisted of Chen; Hu; Virginia Tech faculty members Wei Zhang, Xi He and Darrell Bosch; and University of Rhode Island associate professor Pengfei Liu.
The researchers used government data to identify 3,699 solar facilities with at least 1 megawatt of generation capacity. These are not home rooftop solar installations but rather are the larger solar power plants, typically consisting of thousands of ground-mounted panels in a field.
Then, they analyzed about 8.8 million real estate transactions near those sites, going back years before the solar facilities were built, to see how agricultural and residential property values changed over time, including after the facilities were built.
They built a model that included geographic data about terrain elevation to determine whether the solar plants would be visible from nearby properties.
Researchers found that the value of agricultural land and vacant parcels within 2 miles of a solar site rose about 19% on average after the solar facility was built.
Chen said this could be because farmland and vacant land near a solar site have a greater potential for future use in solar power generation.
“If you wish to have new solar generating capacity, a new solar site, it might be much cheaper to expand an existing one,” Chen said. “So if farmland or vacant land is very close to a solar site, it’s more likely for it to have a future solar lease.”
That idea is also supported by research that shows proximity to electric substations and transmission lines increases value, he said.
Meanwhile, residential homes within three miles of a large solar site lost about 4.8% of their value, on average, shortly after a solar facility’s installation. The impact lessened with time, and home prices returned to normal after about 10 years.
The study also found that proximity to a solar site didn’t affect homes on lots larger than 5 acres, and visibility of the solar site from the residential property made no significant difference.
Chen said the reduction in residential property value could be primarily due to a negative perception about solar facilities — perhaps some homeowners want to sell their property soon after a solar facility is built nearby, but by 10 years later, the property has been purchased by a buyer unconcerned with the facility’s proximity.
“We cannot say that definitely, but we think that might be an explanation,” Chen said.
Chen said that more research is needed to continue exploring the connections between utility-scale solar facilities and property values.
“We need to have further studies focusing on specific cases or specific contexts,” he said.
Study joins others evaluating impacts of utility-scale solar
The Virginia Tech-led research, published in June in the Proceedings of the National Academy of Sciences, is the latest among several studies examining how utility-scale solar impacts property values.
Other studies have examined the question in one region or a handful of states.
A Loyola University researcher’s study published last year found that homes near solar power plants in the Midwest saw a slight uptick in value, from 0.5% to 2%.
A 2023 study of six states by researchers at the Lawrence Berkeley National Laboratory and the University of Connecticut found that homes near solar facilities saw a 1.5% drop in value.
Other studies have shown varying results.
Meanwhile, a March study from Virginia Commonwealth University explored a related topic: how much Virginia land has been used for utility-scale solar.
It concluded that large solar facilities take up just over 30,000 acres in Virginia. Buffer zones such as grass and bushes around solar panels are not included in that figure.
The VCU study found that cropland has been disproportionately impacted by solar development. While only about 5% of Virginia’s land is cropland, about 28% of land used for utility-scale solar arrays has been cropland.
On the other hand, forest land in Virginia has been impacted more or less proportionately. About 50% of the land for large solar arrays formerly was forest, while forests overall make up 54% of Virginia land.