Agricultural Land: Crop Production or Photovoltaic Power Plants

Abstract

Mitigation of climate change requires a decrease in greenhouse gas emissions. It motivates an increase in renewable electricity generation. Farmers can develop renewable energy and increase their profitability by allocating agricultural land to PV power plants. This transition from crop production to electricity generation needs ecological and economic assessment from alternative land utilization. The novelty of this study is an integrated assessment that links economic and environmental (carbon dioxide emissions) indicators. They were calculated for crop production and solar power generation in a semi-arid zone. The results showed that gross income (crop production) ranges from USD 508/ha to USD 1389/ha. PV plants can generate up to 794 MWh/ha. Their market cost is EUR 82,000, and their production costs are less than wholesale prices in Ukrainian. The profitability index of a PV project ranges from 1.26 (a discount range is 10%) to 3.24 (a discount rate is 0). The sensitivity analysis was carried out for six variables. For each chosen variable, we found its switching value. It was revealed that the most sensitive variable is a feed-in tariff. Operational expenses and investment costs are the most sensitive variables. Carbon dioxide footprints range from 500 to 3200 kgCO2/ha (depending on the crop). A 618 kW PV plant causes a release of carbon dioxide in the range of 5.2–11.4 gCO2/kWh. The calculated carbon dioxide payback period varies from 5 to 10 months.