Michigan farmers will keep their tax incentives if they build commercial solar panels on land set aside for agricultural use.
Gov. Gretchen Whitmer and Michigan Department of Agriculture and Rural Development Director Gary McDowell announced Monday that participants in the state’s Farmland and Open Space Preservation Program can add solar panels to their land. The MDARD program provides tax incentives to property that block non-agricultural development for a minimum of 10 years.
There are 3.4 million acres of farmland enrolled in the MDARD program, making land scarce for developers searching for farmland to build large solar array projects, according to a Monday release.
Wind turbines and cell phone towers were allowed to be placed on land in the program, but farmers had to end their contracts with the state before enter commercial solar leases. Ending the agreement early meant repaying the last seven years of tax credits with 6% interest.
The administrative decision will not result in a loss of useable farmland, McDowell said in a statement. Instead, it ensures Michigan farmland is preserved “so we can continue to feed our communities while also balancing the need to develop renewable energy sources," he said.
Whitmer expressed a commitment to meet a growing demand for clean renewable energy sources. She said investments in renewable energy protect the state’s environment while providing Michigan farmers with a new way to make money and boost economic development.
The Michigan Energy Innovation Business Council, Michigan Agri-Business Association and Michigan Conservative Energy Forum celebrated the new revenue stream for farmers. They said rural communities will benefit from jobs and economic boosts that come with solar installations.
“Solar energy provides farmers, agribusinesses and farm communities with a steady source of tax revenue while preserving farmland for future generations,” said MABA President Jim Byrum.
Michigan League of Conservation Voters Executive Director Lisa Wozniak said the new rules will remove barriers for solar development in rural communities.
“At a time when big utility companies like DTE and Consumers Energy are laying out their long-term energy plans, this order will remove barriers to solar energy and provide opportunities to aggressively follow through on their own clean energy goals,” Wozniak said.
The decision is a result of a process Whitmer began by convening a task force of agricultural and conservation partners. The group was charged with determining how renewable energy could be a part of the larger farmland preservation effort.
“This is an exciting new opportunity for Michigan’s farmers to diversify while they continue to face challenging circumstances,” McDowell said in a statement.
The policy also puts in place conditions to ensure the land is returned to a condition that allows for agriculture production after solar panels are removed. The landowners must sign an amended agreement that guarantees these conditions are met.
Sites that add solar panels must also meet pollinator habitat standards designed by researchers at Michigan State University. Michigan Environmental Council Agricultural Policy Director Tom Zimnicki said the protection for pollinators reduces threats to food production for crops like apples, blueberries and cherries.
The executive decision is an "all around win for Michigan,” Zimnicki said.
"The pollinator habitat requirement of this executive decision is an important step for ensuring food production, and hopefully serves as a model to other states for how renewable energy, pollinator habitat, and agriculture can coexist for the betterment of everyone,” Zimnicki said.
MDARD has added 212,691 acres to the farmland preservation program since 2014. An estimated $53 million in tax credits were issued in 2018.