‘We need to be smarter in siting solar installations’
Those
are among the findings of a report issued today by Corey Lang, URI associate
professor of natural resource economics, and doctoral student Vasundhara Gaur.
They discussed their study last night as part of a virtual lecture series
sponsored by the URI Cooperative Extension.
“Utility-scale
solar energy has been growing in southern New England over the past several
years, and while it’s a really good thing to transition away from fossil fuels,
it also comes with a new set of challenges,” said Lang. “It has become a
contentious land-use issue because solar arrays take up quite a bit of land per
unit of energy produced.”
The
biggest issue of contention between residents and solar developers is siting,
according to Lang. The easiest and cheapest locations for installing solar
arrays are on farmland and forested properties, and yet those are areas
particularly prized by residents, who would prefer that the installations take
place on previously developed properties.
To better understand these issues and their financial impact on housing values, Lang and Gaur reviewed 400,000 housing transactions between 2005 and 2019 within three miles of one of 284 sites where a solar array would eventually be installed.
“Solar
power has benefits, and most people are aware of those benefits, but there are
some downsides to living near a large array. It’s an industrial-looking land
use, and there are ecological concerns associated with them, and people may not
want to live nearby,” Lang said. “We wanted to understand how nearby property
values respond when a solar array is built.”
By
looking at how housing prices changed from before to after the installation of
a solar array, the researchers found that property values within one mile
declined by an average of $5,751 or 1.7%. This translates into approximately
$279 per year that buyers are willing to spend on a home purchase to avoid
living near a solar installation.
“That’s
not an enormous figure, but if you sum all of the properties within one mile of
an array, that number becomes pretty big in terms of the total loss of value,”
Lang said.
Not
every property is affected in the same way, however. The biggest negative
impacts were in suburban communities when a solar array was installed on a farm
or forested property.
“When
a farm or forest is developed into solar and there is a scarcity of that type
of land in the area, you get a double negative – you lose the farm and forest
amenities that are highly valued, and you get the disamenities of a solar
development,” Lang explained. “Losing that natural area and replacing it with
something industrial is where the biggest negatives arise.”
In
those circumstances, the researchers found that housing prices within a mile of
the solar installation declined by 5%.
By
calculating the value of the reduction in carbon emissions from the solar
installation and comparing it to the loss in housing value due to the
installation, Lang said that the benefits of solar energy installations are
outweighed by the costs to nearby property owners.
“What
this means is that we need to be smarter in siting our solar installations,”
Lang said. “We should be building in areas that don’t have a lot of properties
close to the array. And not building on farm and forest land in nonrural areas
would significantly help the calculation.
“If
we can incorporate people’s preferences into siting decisions and into the
benefit-cost analysis, then we can flip this result and the global benefits of
solar installations will outweigh the local disamenities,” he added.
Lang’s
next study will examine how best to incorporate people’s preferences into
siting decisions.