It wasn’t very long ago that profiting from a solar photovoltaic (PV) system seemed far from reach. In the past decade, however, solar PV technology has advanced substantially and also become significantly cheaper. These factors have turned solar into a serious consideration for commercial poultry farms looking to decrease their production costs. Subsequently, farm managers may want to learn more about using solar for broiler production so that they can better advise growers in this area.
What Drives Return on investment?
A recent study titled “Factors Affecting Solar Profitability for Southeastern Broiler Growers” looks at how solar PV system size, availability of sunlight and compensation from utility companies affect solar PV system profitability for a typical southeastern poultry farm. The study, which was authored by Dennis L. Brothers, Joshua M. Duke, Adam Rabinowitz and Jose Garcia Gamez, appears in the 2022 Journal of the ASFMRA alongside six other articles that cover topics of interest to farm managers and agricultural consultants.
According to the authors, the amount of available sunlight is not as important as other factors when determining the profitability of a solar PV system. The results indicate that profitability instead depends more on the size of the system in relation to the farm and how the local utility company structures its buyback rate for excess energy generated by a solar PV system
For example, when the energy buyback rate is low, a solar PV system that is located in a high-sunlight area and is sized to offset 100% of a broiler producer’s energy costs will often result in more profit lost than a system located in a low-sunlight area that is sized to cover 30% of energy costs.
It’s all local
When considering whether solar is a good fit for a poultry operation, farm managers and broiler growers should first learn about the local utility’s compensation rates. From there, determine what the appropriate solar PV system size would be to meet profit goals. The objective when sizing a system should be to minimize the amount of excess solar energy sold at a low buyback rate to the utility and maximize the offset of retail energy costs.
Additional considerations
To complicate matters, federal tax incentives and competitive grants for solar projects can dramatically improve the profitability of an investment by reducing system cost, assuming the grower is able to take advantage of these programs. Taking these factors into account can again change the calculus on which size of system would be most beneficial for a poultry operation.
Finally, the authors highlight one more thing for farm managers and growers to consider–the increasing pressure in the U.S. to adopt more renewable energy.
