The rapid maturity of solar power has brought the technology closer to home. Across Canadian dairy farms, the adoption of solar energy is growing as a financially viable and strategically positive move. Farmers have been harnessing sunlight to grow food and raise livestock for thousands of years, so it’s no surprise solar panels are the next step in agriculture's evolution.

The rise of solar energy on Canada's farms

According to the last Census of Agriculture, more farms across Canada are using renewable energy production, with solar energy use increasing by 66.5% between 2016 and 2021. Ontario, the second-largest dairy-producing province in the country, accounts for more than one-third of solar energy use in Canada, which is a figure that will only continue to rise.

Three key motivators drive farmers to adopt solar:

1. Rising utility costs: Farming is an energy-intensive industry, with dairy farms using 800 to 1,400 kilowatt-hours per cow per year. As utility costs continue to rise, farmers are seeking alternatives to avoid the burden of escalating bills and gain energy independence.
2. Government initiatives and tax credits: Federal, provincial and municipal pressures, coupled with tax credit programs like the Clean Energy Investment Tax Credit (ITC), make solar adoption financially workable for farms. These initiatives aim to not only reduce carbon footprints but also to bolster the financial health and long-term sustainability of farms.
3. The influence of industry groups: Influential industry organizations and processors are urging farmers to embrace clean energy for the sake of sustainability. The Dairy Farmers of Canada has committed to achieving net zero emissions by 2050, and dairy farmers must ensure their products meet the standards of proAction, which includes environmental sustainability. Agropur and Lactalis Canada are also implementing more sustainable practices across their production and transportation lines.

The influence of other farmers is also a critical contributor to solar energy adoption. The social nature of farming ensures success stories of solar energy will spread rapidly among tight-knit communities and fuel more installations.

Dispelling myths about solar energy for farming

While solar energy’s growth is just getting started, barriers remain to slow progress. Three misconceptions about solar energy deserve discussion to keep the momentum going:

1. Canada has too much snow for solar energy. Contrary to common belief, snow doesn't render solar energy impractical. Studies show only 4% to 6% of annual production is lost due to snow on typical roof angles and, for ground-based systems, there are technological advancements to improve the collection of energy. For example, double-sided panels produce electricity on the back in the same way as the front, taking advantage of sunlight reflected off the ground to automatically shed snow on the front.
2. Solar technology is too complicated for farms. Modern solar technology is intended to be easy to install and maintain, even for large farming operations. Modular solar units offer simple installation, including do-it-yourself options. Such solutions are designed to meet the practical needs of farm operations without cumbersome installation and maintenance efforts.
3. Solar panels must go on the roof. Dairy farmers concerned about roof loads and expensive infrastructure changes have no reason to worry: Ground-mounted solar panels are a pragmatic option. Ground-mounted arrays can be installed on locations of the farm not suitable for other purposes and come in a variety of racking and mounting systems.

Making sense of the money

Investing in solar energy should be viewed through a practical lens, considering both costs and benefits.

Stabilizing electricity costs

Solar power provides the opportunity to secure electricity costs for the next three decades at a consistent, predictable rate that’s set at the date of installation. This shields dairy farmers from the volatility associated with traditional utility pricing. Often, farmers can secure their energy from the sun at less than half of what they are currently paying their utility provider today.

Many producers opt for solar power over windmills or biodigesters due to the utility price stability offered by solar and its comparatively lower startup costs.

Leveraging Canada's Input Tax Credit (ITC)

Recognizing the financial constraints many farmers face, the 30% Clean Energy ITC is a valuable mechanism to reduce the capital cost of renewable energy assets. Unlike capital depreciation tax deductions, the ITC is a refundable tax credit and can put the farm in a tax refund situation at year-end. Eligible investments include installing solar panels and wind power, energy storage, electric vehicles and clean hydrogen.

Financing options to preserve cash flow

Agricultural solar financing remains something of a mystery – how does a dairy farmer determine the impact of a new installation on their cash flow? Increasing demand for cash flow-positive solar solutions has driven demand for a new class of financing platforms that preserve operating capital and retain the savings realized through owning electricity production. Innovative financing solutions are available to help farmers maximize their clean energy investment while reducing operational impact.

Integrating solar storage

Beyond cost considerations, integrating solar storage solutions ensures dairy farms have a reliable power supply, contributing to operational self-sufficiency and greater peace of mind. Typical storage options provide farms with backup power when the grid goes out and help offset the cost of peak electricity charges at different times of the day. This is particularly helpful on farms with robots, where any downtime can lead to delayed milking and a long period to get cows caught up.

Owning electricity generation makes sense for dairy farms

The transition toward solar energy on dairy farms is not just an environmental consideration but a practical one with tangible financial implications. Through ongoing dialogue on sustainable and financially sound practices in our farming community, we can capture the growing potential of the sun as a reliable energy source for dairy farms.

References omitted but are available by sending an email to the editor.