Agricultural Solar Calculator 2026 — Farm Solar ROI & REAP

Understanding your results

How the farm solar estimate works: System size = annual kWh covered ÷ (peak sun hours × 365 × 0.82). Installed cost = kW × 1,000 × your $/W. Year-1 savings = kWh produced × your energy rate × a bill-offset factor for your net-metering rules (0.87 full retail, 0.70 net billing, 0.60 low export, 0.55 no statewide net metering). Net cost = installed cost − REAP grant − §48E credit − MACRS tax savings. The 25-year figure grows savings 3%/yr for rates and trims 0.5%/yr for panel degradation.

Worked example (default inputs): A farm using 8,000 kWh/month at $0.14/kWh (the US commercial average, EIA July 2026 year-to-date), 4.5 peak sun hours, covering 90% of use, needs about 64 kW. At $2.50/W that is roughly $160,400 installed and saves about $9,100 in year 1 (0.75 offset). With a 30% §48E credit and MACRS at a 25% tax rate, net cost is about $78,200 and simple payback about 8.6 years. Without the credit, payback is about 13.3 years; with a 25% REAP grant plus the credit, about 6.5 years.

Is there still a federal solar credit for farms in 2026? Yes, for business-owned systems — but with deadlines. The homeowner credit (§25D) ended for systems installed after Dec 31, 2025. Farms and other businesses use the §48E Clean Electricity Investment Credit, which the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) limited to solar that began construction by July 4, 2026, or is placed in service by Dec 31, 2027, with foreign-entity-of-concern (FEOC) sourcing rules. Because the begin-construction date has passed, a farm starting a project now generally needs it in service by Dec 31, 2027. Set the credit to 0% if you might miss that. Source: IRS OBBB FAQs.

MACRS depreciation still applies: Business-owned solar is 5-year MACRS property. When you claim the investment credit, the depreciable basis is reduced by half the credit. The calculator shows the undiscounted tax savings (basis × your marginal rate), which in practice arrive over about six tax years. Tax-exempt entities such as nonprofits, schools and local governments cannot use depreciation but can still use elective (“direct”) pay under §6417 for §48E on qualifying projects within the same deadlines. Businesses that cannot use the credit themselves can generally transfer (sell) it under §6418. This is not tax advice; confirm with a tax professional.

USDA REAP grants: The Rural Energy for America Program offers grants of up to 50% of eligible project costs (with dollar caps) plus loan guarantees to agricultural producers and rural small businesses. Funding rounds, scoring and eligibility rules change; USDA has tightened REAP rules for solar since 2025, so confirm current terms with your state USDA Rural Development office before counting on a grant. This calculator conservatively computes the §48E credit on cost after the grant — whether a grant reduces credit basis depends on its tax treatment.

Net metering and demand charges: Many states allow agricultural accounts to net meter, but often with system-size caps or separate tariffs for larger systems. Solar lowers the energy (kWh) part of a bill; demand charges based on peak kW (common on irrigation and grain-drying accounts) usually drop little. Check your tariff with your utility and DSIRE.

Ground mounts and agrivoltaics: Most farm arrays are ground-mounted, which allows optimal tilt and larger sizes. Research at Oregon State University, the University of Arizona and DOE’s InSPIRE project has found panel shade can cut water needs and heat stress for some crops and supports sheep grazing; results vary by crop and climate.