Techno-economic Assessment of Agrivoltaics in Brazil: Measuring the Potential for Energy Generation, Economic Returns, and Farmer Livelihood Benefits

Abstract

The role of solar energy in the energy transition is crucial, and this technology has experienced exponential growth over the last two decades. However, solar energy requires land for installing photovoltaic panels, which puts it in direct conflict with agriculture, an essential, land-intensive activity. Additionally, agriculture has also been in constant expansion, placing extra pressure on land availability. From this dispute, agrivoltaics (AV) emerged as a model that allows for the use of the same land for both agriculture and photovoltaic energy generation. Given the agricultural relevance and the potential of solar energy in Brazil, this research conducts a techno-economic assessment to quantify the agrivoltaic potential for energy generation and economic returns in the country, while also considering the socio-environmental benefits this system could bring to farmers. The analysis is conducted on a system level and modelled in Microsoft Excel.

Despite Brazilian policies not mentioning AV, this technology could fit into various agricultural and distributed energy generation regulatory frameworks. This research evaluated the three main agricultural products in the country: Livestock and Animal Farming, Annual Crops and Permanent Crops, which account for 94% of the rural property area. Given a ground cover ratio (GCR) of 25%, an overhead photovoltaic (PV) structure was considered for the agrivoltaics system (AVS), based on the crops cultivated in Brazil and their production techniques. Following an adhesion rate of half of the current PV penetration in the country, the model returned a potential of energy generation 144 times greater than the annual rural energy demand in 2024 and 6 times the national demand, representing an absolute value of 4,503 TWh.

Regarding the associated costs of the modelled AVS, the CAPEX to meet rural demand is approximately BRL 107 billion, while the CAPEX to meet smallholder farmers’ energy needs is BRL 18 billion. When calculating the AVS levelised cost of energy (LCOE), the national average is 391 BRL/MWh. However, PV energy generation only occurs during daylight hours, meaning farmers should have a system that enables access to energy when the AVS is not producing any. In this case, farmers need a specific type of storage system. This research considered the electric grid as a repository for surplus energy from the AVS to be used later; this use incurs additional costs depending on the quantity of energy exported to the grid. Assuming half of the surplus energy is exported, the cost of electricity after installing the AVS rises to 553 BRL/MWh. Across all consumption-and-generation simultaneity scenarios in the five macro regions of Brazil, the cost of energy from the AVS was lower than the grid price, resulting in a positive economic return and an average national payback period of 6.1 years.

Regarding socio-environmental benefits, AVS could provide farmers with access to a clean energy source, helping reduce energy poverty among this group, which faces a national average of 16% without access to energy. Furthermore, AVS reduces heat stress on animals and crops in dry, hot regions, including three of the five Brazilian regions, thereby decreasing water demand for agricultural production. With access to electricity, farmers can install irrigation systems, improving their water management. These factors would enhance farmers’ livelihoods by promoting sustainable development and climate adaptation in rural areas.