USDA Restricts Federal Subsidies for Solar Energy Projects

Strategic Insights -

The U.S. Department of Agriculture has announced it would restrict the use of federal subsidies for solar energy projects, citing concerns over the displacement of prime farmland for solar fields. The move has been met with opposition from clean energy advocates, who argue that solar gives farmers a higher production value per acre than any traditional crop. According to the USDA, the number of solar panels on U.S. farmland has increased by more than 50% since 2012, with some large-scale solar projects in Iowa being managed and run by utility companies.

Key Takeaways:

  • The USDA has restricted the use of federal subsidies for solar energy projects, citing concerns over the displacement of prime farmland for solar fields.
  • The number of solar panels on U.S. farmland has increased by more than 50% since 2012, with 17.5 million acres of Iowa's 30 million acres of farmland considered prime agricultural ground.
  • If all proposed solar projects in Iowa were built on only prime farmland, it would occupy 0.2% - or about 35,000 acres - of prime farmland in the state.
  • The USDA's decision targets the Business and Industry program and the Rural Energy for America Program (REAP), which provide funding for renewable energy projects on farms and in rural communities.
  • Clean energy advocates argue that solar projects can coexist successfully with crops or grazing, and that restricting farmers' choices limits their ability to generate energy on their own and create additional revenue streams.
  • Solar can generate a production value of $11,068 per acre, annually, for farmers, significantly more than traditional row crops like corn, which has a per acre production value of about $930.
  • The USDA's decision does not impact utility companies that have already secured funding for solar projects, such as Alliant Energy's 150 megawatt Wever Solar Project in Lee County.

Statistics:

  • 17.5 million acres of Iowa's 30 million acres of farmland are considered prime agricultural ground (Source: Clean Grid Alliance)
  • 5,755 acres of land in Iowa are used for solar energy production (Source: Clean Grid Alliance)
  • If all proposed solar projects in Iowa were built on only prime farmland, it would occupy 0.2% - or about 35,000 acres - of prime farmland in the state (Source: Clean Grid Alliance)
  • Iowa farmers and landowners receive $4.3 million, annually in land-lease payments for solar projects (Source: Clean Grid Alliance)
  • Solar can generate a production value of $11,068 per acre, annually, for farmers (Source: Clean Grid Alliance)
  • Corn has a per acre production value of about $930 (Source: Clean Grid Alliance)

Sources:

  • U.S. Department of Agriculture press release (August 19, 2025)
  • Clean Grid Alliance report (July 29, 2025)
  • International Energy Agency report (2022)
  • Iowa Capital Dispatch article (September 4, 2024)
  • Environmental Law & Policy Center statement (August 2025)