A case study published by Michigan Technological University researchers Ram Krishnan and Joshua Pearce found that converting tobacco fields to solar farms could save thousands of lives annually. The study, titled “Economic Impact of Substituting Solar Photovoltaic Electric Production for Tobacco Farming,” analyzed the potential of such an exchange in North Carolina due to the state’s robust tobacco production as well as its ample sunlight. Krishnan and Pearce focused their economic analysis on a specific group of stakeholders—North Carolina landowners—but the broader conclusions of the project are related to the impact on public health on a global scale.
What’s in It for the Farmers?
In spite of consistent volume declines worldwide, tobacco farming remains a highly profitable undertaking for many farmers in the southeastern United States. Converting land that is being used for tobacco farming to solar energy production can be a tough sell given the high cost of panel installation. Whether such a change makes sense for landowners depends on individual circumstances, but Krishnan and Pearce demonstrated that the decision could be a good one for many. By forecasting the potential profitability of tobacco farming versus solar energy production years into the future, their study showed that the solar option is likely to drastically outperform tobacco.
In their modeling, the researchers assumed modest, shortage-induced price increases for tobacco in the coming years. Next, they predicted the value of solar energy over the same time period using the historical price increases of electricity as a model. It is crucial to note that these “escalation rates” are likely to increase as fossil fuels become more costly in the coming years. The researchers then juxtaposed this solar profit model against the one they created for tobacco. The results were clear: going forward, farmers are likely to derive much more value per acre if their land is occupied by solar panels instead of tobacco plants.
The challenge is in the high capital investment required to make the initial transition. Solar farms can cost as much as $2 per watt to install, sending the total cost of installation well into the millions of dollars for an average-sized system. It’s a high-leverage proposition. North Carolina landowners stand to be rewarded handsomely in the future if they can absorb these costs today.
Positive Externalities Associated with the Transition
In addition to the capital expense, one reason that solar energy isn’t more prevalent today is that it requires an enormous amount of space to be effective. Land is finite—devoting more of it to solar farming means that less of it can be devoted to more traditional kinds of farming. That can have major negative consequences for food prices and hunger worldwide. When arable land is diverted away from food production, more of the world’s population goes hungry. It’s just simple math. That’s one reason tobacco farms are such an appealing target for conversion. Limiting tobacco production does not limit access to food. It just limits access to the single largest cause of preventable death worldwide.
The Centers for Disease Control and Prevention (CDC) estimates that over 480,000 deaths in the United States alone could be avoided each year if tobacco use were eliminated entirely. This case study drives home the point that every acre of tobacco converted to solar panels potentially puts a dent in that number. Every time a tobacco farmer converts the crop, it eases the public health burden that tobacco use places on health-care systems worldwide.
Finally, and most importantly, solar energy is good for the planet. In this, we are all stakeholders. The proliferation of solar farms helps wean society off the well-documented catastrophe caused by fossil fuel use. Traditional electricity production damages our environment and pollutes our air. Solar electricity production does neither. The clean wattage potential of transitioning from tobacco to solar production in North Carolina alone is staggering—enough, in fact, to support the state’s power needs at their peak. Substituting that volume of fossil fuels for solar energy could have an enormous impact on everything from water quality to the ozone layer. To that point, Krishnan and Pearce estimate that converting all North Carolina acreage currently used for tobacco production to solar energy production would save an additional 2,000 lives annually as a result of reduced pollution.
None of this will happen overnight. The model outlined in the Michigan Tech research team’s paper makes clear the viability of this decision for landowners from a financial standpoint, but there are hurdles to overcome. With that said, photovoltaic electric production is only going to get cheaper on a per-watt basis. The demand for clean energy is only going to grow. This study demonstrates the viability of executing on a win-win situation: swapping out a net-negative industry (tobacco) for a net-positive one (solar farming).