Agrivoltaics Poised to Play Key Role as U.S. Energy Demand Surges, Says IEEFA Report

As electricity demand rises across the United States—driven by electrification, data centers, and artificial intelligence—a new report from the Institute for Energy Economics and Financial Analysis (IEEFA) highlights agrivoltaics as a major opportunity to expand renewable energy while supporting agricultural communities.

After decades of stagnant consumption, U.S. energy demand is accelerating, and wind and solar continue to outperform gas and coal on cost. However, ideal land for solar installations often overlaps with active farmland, creating land-use challenges in many rural regions.

Agrivoltaics Offers Dual Benefits

Agrivoltaics, the dual-use model that pairs solar generation with active farming on the same land, presents a solution that benefits multiple stakeholders:

-Landowners gain predictable revenue while keeping farmland productive.

-Developers secure viable solar sites with fewer permitting conflicts.

-Communities retain agricultural activity while benefiting from tax revenue and local investment.

“Agrivoltaics demonstrates that agricultural production and solar development can be complementary rather than competing options for land use,” said Asher Salkin, former research intern at IEEFA and author of the report. “Our research shows that using agrivoltaics in agricultural settings increases crop yields in water-stressed regions, which not only lowers operating costs but also improves soil and ecosystem health.”

Market Growth and Potential

Although still emerging, agrivoltaics deployment in the U.S. has expanded significantly. Installed capacity has grown from 4.5 GW across 27,000 acres in 2020 to 10 GW across more than 62,000 acres in 2024, enough to power 1.5 million homes.

IEEFA notes that with the right policy support, agrivoltaics could:

-Aid small and midsize farmers

-Help meet rising national electricity demand

-Broaden rural participation in the clean energy transition

With U.S. power needs increasing and the economics of renewables remaining strong, agrivoltaics offers a path that aligns agricultural productivity with clean energy expansion. The IEEFA report suggests that scaling agrivoltaic development could play an increasingly important role in strengthening both the nation’s energy grid and rural economies.