Selling sunlight more profitable than selling cancer
7 February 2018
Most US tobacco farmers would be better off replacing their crops with solar panels, according to new research out of Michigan Technological University.
The research found that tobacco farmers would likely earn much more from generating solar than growing tobacco, with the added benefits of helping to create renewable energy while reducing preventable deaths.
Published in Land Use Policy, the research found that in many circumstances solar PV would provide thousands of dollars to tens of thousands of dollars more per acre per year for land owners, even when using conservative estimates.
“We were interested in what conditions were needed to enable tobacco farmers to begin installing solar energy systems on the same land,” Michigan Tech professor of materials science and electrical engineering Joshua Pearce said.
“We looked at likely trends in all of the major economic factors, but were surprised to find that because the cost of solar has dropped so dramatically it is already economically advantageous for tobacco farmers to replace tobacco with solar in many situations.”
The study noted that there had been criticism of previous efforts to convert cropland to produce energy, such as with ethanol.
“Previous, more modest attempts to offset fossil fuels with biofuels required so much land that food crops were offset, raising food prices and increasing hunger throughout the world,” Dr Pearce said.
The researchers thought a better strategy was to utilise arable land that grew crops with known health hazards and shrinking economic markets. Case in point: tobacco.
The negative health effects of tobacco are now well-known, being responsible for six million deaths a year globally and representing the leading cause of preventable deaths.
In a case study of tobacco-rich North Carolina, the research found 30 gigawatts of PV was economically viable on existing tobacco farms (equivalent to the state’s peak summer load), and that the conversion would stop 2000 premature deaths from pollution reduction alone.
A sensitivity analysis was conducted that looked at different electricity price escalation rates, tobacco crop yield and price, and solar installation cost. The research found that solar panels made sense in a number of scenarios, even those using quite conservative estimates.
The stumbling block, however, is capital costs. Farmers without access to capital or loans would struggle to find the money to cover installation. For example, a 10-megawatt solar farm at an install rate of $1 a watt would cost $10 million.
Dr Pearce said governments in tobacco states should start to explore policies to ease the transition, for example assisting the access to capital for investment. Recommendations included income tax holidays, loan guarantees for construction, partial subsidies for construction or full construction subsidies.
The researchers said government intervention could help transform land from a health risk to a health asset.
“This North Carolina acreage of tobacco farming land, which occupies more than 200,000 acres, is currently considered a threat to global health by the World Health Organization, the US Department of Health and Human Services, the Centers for Disease Control and Prevention, the National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health,” the report said.
“If converted the same land would become an environmental and health related global asset while generating more profit for the land owners.”