Industry Trends
Agrivoltaics: what makes or breaks coexistence is the crop's light, before the feed-in tariff
2026-06-09
An agrivoltaics business plan usually fills in from the generation-side numbers first. The FIT rate, the mounting estimate, the subsidy cap. The more you run the numbers, the more solid the plan looks. But that solidity hides a trap in the sequencing. What you should decide first is not the terms of selling electricity.
Whether coexistence works is decided by the crop’s amount of light, not the shading ratio
In the business-plan spreadsheet, the crop cell is the one left blank until the very end. That is a common way agrivoltaics plans get built. You put solar panels over farmland and do generation and farming together. At that point many projects compute the return first from the feed-in tariff and the subsidy, then fill in the crop last, almost as a blank: “now, what do we plant on this land?” Some projects do run that way. Still, that order nags at me.
I have spent more than a decade facing the light environment in a Plant Factory with Artificial Lighting (PFAL) vertical farm. How much light a crop needs, and how it falls apart when the light runs short, is in my bones by now. I have not run agrivoltaics myself, but seen from the light side, a few things give me pause. Under the same panel layout, leafy greens do fine, while a light-hungry crop like tomato will slide toward stunted, shade-starved growth. Yet when the case for whether it works stops at “what’s the shading ratio,” the question that matters — how much light that crop actually needs — drops out.
A light-hungry crop falling apart in the shade is, at bottom, a problem of sequence. The shading ratio only tells you how much light the panels take away; that is a different thing from how much the crop needs. For a type like tomato, where more light means more yield, whatever is taken away comes straight off growth. Leafy greens hit a growth ceiling at low light, so losing a little does not trouble them. So the sound way to do it is to settle first, crop by crop, whether you can meet the light it needs, and only then work the design backward: raise the mounting, widen the row spacing, cut the panel count. Start from the feed-in tariff and you skip this first gate — is the light enough? — and judge the whole thing on the shading ratio alone, the number on the take-away side. That is why it lands for leafy greens and misses for the light-hungry crops.
That said, write shading off as nothing but a loss and you miss the other half of it. Light has a “saturation point” for each crop, and anything beyond it is no longer used for photosynthesis. As a textbook rule of thumb in plant physiology, the light saturation point for lettuce and strawberry is around 500 μmol/m²/s, and even for tomato and bell pepper around 700–900 μmol/m²/s. Direct sunlight at midday in high summer, meanwhile, can exceed 2,000 μmol/m²/s. In other words, for many vegetables, summer direct sun is “excess.” The surplus light is not just wasted; it causes photoinhibition that damages the chloroplasts, the leaf scorch and sunscald that burn leaves and fruit, and the heat stress that comes with them. Here, the roughly 20–30% shade under the panels does real work: it pulls that excess down into the right range near the saturation point. This is where shading turns from a loss into a control. So shading has two faces. Let it tip below the saturation point and the crop breaks; let it shave off light that was in surplus and it actually helps. Which way it tips is not set by how high the shading ratio is, but by how the crop’s saturation point sits against the light that actually falls on that land.
These two faces are not armchair theory. Iowa State University, with funding from the U.S. Department of Energy, planted crops under a 10-acre, 1.3-megawatt commercial solar farm and ran a two-season demonstration (see 7). Ordinary vegetables and fruit, broccoli, bell pepper, summer squash, strawberry, raspberry, held up under the panels; summer squash consistently had higher yield under the panels, and bell pepper showed almost no difference in yield while suffering less sunscald damage. Air and soil temperatures were 1–2°C lower under the panels, and labor input in the second year was down 28% from the first. On top of that, no special machinery was needed, standard farm equipment worked as-is, and it ran without giving up scale. The part worth dwelling on is what they grew there. Bell pepper, with a saturation point of 700–900 μmol, sits in the same band as the tomato I put on the light-hungry side a moment ago. And yet it grew under the panels with less sunscald. Not every light-hungry crop falls apart in the shade; for crops that had been soaking up too much light, shading becomes a control that holds sunscald down — and learning to tell those crops apart is what separates a workable site from a dud.
The ceiling you can allow is worlds apart from one crop to the next. A model estimate for greenhouses puts numbers on it. This is an estimate aimed at greenhouses with panels built into the roof rather than outdoor mounting, but it estimates that if the PVR — the share of the greenhouse floor area taken up by the projected area of the panels, an index close to the shading ratio — is 25% or below, then even including light-hungry crops like tomato and cucumber, the drop in yield can be held under 25% (see 1). Conversely, ornamental flowers, which need little light to begin with, can still pencil out even at PVR 100% — the roof fully covered. Same question, “what percentage do we put up,” and the ceiling is set by the crop, every time. That said, this is a greenhouse estimate. With outdoor mounting, the light distribution under the panels changes with mounting height and row spacing, so the same PVR cannot necessarily be carried straight over to open ground. Rather than the numbers themselves, the safe thing to carry over is the direction of it: the ceiling is set by the crop’s light demand.
Judge the light by the winter baseline and work the allowable shading backward
Set your baseline in winter and a shortfall you’d never have spotted comes into view. What matters here is the DLI, the total light a crop takes in over a day. At the same shading ratio, the summer DLI runs over if anything, while winter, on the very same layout, falls short fast. So if you judge coexistence on a yearly average, the comfortable summer pulls the figure up and the winter shortfall vanishes from view. With a fixed mount and the same layout all year, that is all the more reason to size the panel density to what holds up in winter; you go wrong less often that way. Put another way: protect winter growth first, even if it means leaving some summer electricity on the table. On top of that, pick a semi-shade crop that wants little light to start with, and you have more margin to ride out winter shading and an easier time squaring it with a fixed mount.

Bring back the saturation point from earlier and you can watch its meaning flip with the season. In high summer the light sits above the saturation point, so shading acts as a control that holds sunscald down. But carry the same fixed mount into winter and you are now shaving further off light that was already scarce; this time it tips into shortfall and breaks. One panel layout, two opposite jobs: control in summer, shortfall in winter. So the design sets its baseline in the season when light is scarcest (winter, in most regions), and asks: even then, can it meet what the crop needs? This changes with region, too. Where sunlight is so strong it becomes the bottleneck for farming — the Middle East, North Africa — shading leans toward a benefit all year, and it fits a setup where you turn part of the surplus sun into electricity and grow vegetables on the rest. Same agrivoltaics, but the starting assumptions are nothing like those on land that has to weather a Japanese winter.
Why such a gap from one crop to the next? Growing trials bear it out. One report finds that leafy-green growth climbs with more light up to a point, but that even fairly low light already covers what the plant needs (see 2). So losing a little light barely registers. That is where the gap from a crop like tomato, which burns through a lot of light, comes from. How much shading a crop can take is not a matter of impression — it has this kind of difference in growth response behind it.
Filling the farming’s losses with generation income won’t last
So far this has been about “will the crop grow.” But whether it actually lasts as a business has another gate. When the way in was “the subsidy and the feed-in tariff made the return pencil out, so we committed,” does the farming side actually keep running?

Compute the return first from generation and subsidy and the whole thing looks like it runs even when the farming is not in the black. That is the trap. And the survey numbers bear out that pouring money in does not change the underlying profit structure. In greenhouse and combined types, which are close to agrivoltaics, the latest survey has over 70% of operators in the black or at break-even, and for greenhouses the share of operators in the black is over half. PFAL, on the other hand, stays at about 50%, with operators in the black or at break-even at 64% across all types (see 3). Even after subsidies were poured in, a profitability gap by type remains, and you can read the numbers this way: the count of facilities rose, but whether each one could stand on its own and keep running was another matter. So once you build on the premise that generation income will cover the farming’s losses, the farming quietly hollows out into a shell, and it collapses the moment the feed-in tariff drops or the subsidy ends. The order is to meet the conditions under which the farming side lasts without subsidy first, and set generation on top as the add-on. It is the same as the light design: clear the gate you have to clear first, then lay the return on top — that direction goes wrong less often.
What decides the economics? How much it sells for in the market (market price) and how much you harvest (yield) dominate, and their product is what bites into the economics first. In fact, a study analyzing the structural fragility points out that the economics can easily break down with just a roughly 30% drop in price or yield (see 4). On top of that come the scale you operate at (construction cost), the power rate, labor cost, location, and the stability of deals and contracts. The same study estimates that economies of scale apply to construction cost, and that when scale grows by a lot — say a hundredfold — the per-unit construction cost falls to about half (see 4). But that is about the cost of building it, not the cost of running it — the daily electricity bill does not bend the same way. So scaling up or cutting costs, on its own, often does not get you there. Unless what you make (market price) and how much you harvest (yield) come first, scale alone will not reach profitability.
Self-consumption in a vertical farm, too, works backward from the facility’s power needs
Separate from all this, here is something I hear a lot lately: putting solar on the roof or grounds of a vertical farm and feeding that electricity into self-consumption. Because it is power you use yourself rather than sell, the order shifts again. Here too there is a gate to clear first, and from there you work the mounting backward.

With self-consumption, the order shows up even more clearly. For a PFAL vertical farm, there are reports that power cost takes up roughly 20–40% of total production cost, and that lighting accounts for most of the power the facility uses — roughly 60–80% or more (about 60–85% in the original source) — so electricity itself becomes the biggest constraint (see 5). So instead of “we can generate it, so up it goes,” you first pin down how much electricity your facility uses during the day, that self-consumption share, the purchase rate, and the contracted power. From there, the sound move is to work the panel count backward: put up only what you can actually use up in daylight. Skip this and the surplus you cannot burn off in daylight gets sold back at a sinking rate, and depending on how it balances against contracted power, the bill may not fall as far as you hoped. The direction is exactly the one I gave for light — meet the crop’s need first. Put the power the facility needs first, and fit the panels to that range. Mount on the roof and the roof area is the ceiling; site them on the surrounding lot and you get freedom in panel orientation (azimuth) and scale, but either way the condition does not change: only within the range that fits into daytime self-consumption.
One caution here. In a PFAL, electricity is the biggest cost; in outdoor agrivoltaics, the power you generate lands on the income side, the earning side. The same word, “power,” carries the opposite sign, so haul the PFAL self-consumption story straight into the revenue structure of agrivoltaics and you mistake a healthy “earning with electricity” for an unhealthy “patching losses with electricity.” What this section covers is strictly the self-consumption type of vertical farm.
In projects that won’t last, the crop gets decided afterward
Before using the order so far to spot failure, just two caveats. One: the “coexistence” I am talking about is limited to combined ventures that intend to keep farming. The type that puts a crop on the land in name only while really selling all the power is a different animal from the start, and the order I have just laid out does not apply. The other: this kind of per-crop light demand, mount design, and power-contract terms all assume you eventually lean on expert hands — agricultural extension services, the utility, government offices — and what I am setting out here is about how far you can size it up on your own first.
With that out of the way: in projects that look like coexistence but where the farming side actually won’t last, what shows up early? Flip the order so far — light, then economics, then return — and the tell is usually the very fact that the crop gets decided last. You can read it off how the business plan is built. The return figures from electricity sales and subsidy are filled in first, and the crucial crop cell alone is left blank to the end. After the mounting height and power contract are already fixed, the cultivation lead gets asked, “what will grow here?” The order is backward. The layout drawing gives it away too: panels arranged so that even the work paths down the harvest lanes fall into shadow, or a budget built on the assumption that generation income will cover the farming’s losses. That is a sign the farming has been cast as the hole-filler rather than the add-on. Once it is running, too: the expected yield fails to come in the first year, the crop keeps getting swapped, the growing starts to be let slide — these tend to be early alarms. Conversely, if the crop was settled first off the winter DLI, and the farming pencils out on its own without subsidy, then however plain it looks, the coexistence has a real core to it. What to watch early is not the size of the return but whether the crop and the economics are decided first — the order, in other words.
The sharpest illustration that even with top technology the economics hinge on the crop is grain. One analysis finds that growing a staple grain like wheat in a closed vertical farm does not hold up economically under today’s power and equipment costs (see 6). However high-performance you make the light and the kit, some ground is already lost on the “what you make” and economics side before you begin. That is why putting the crop and the economics first is the order that counts.
The first move is to place the crop before the return
Standing in front of a candidate field, your first move is not to pencil out the return — it is to narrow down to a single crop. Once the candidate crop is set, write down as your first number the DLI it needs in the season when light is scarcest for it (winter, in most regions). Next, look at how much light actually reaches that field in winter and work out the ceiling on the shading ratio you can allow while still meeting the crop’s demand. At this point, set the harvest frequency and the work paths together from that same crop starting point — whether the harvest lanes go too dark, whether people and hands fit down the aisles. Only then do you decide how high to raise the mounting, how wide to space the rows, how many panels to put up. The power contract and the return come after. For self-consumption in a vertical farm, put “the power the facility uses during the day” in the crop’s place at the top. In short: make the top row of your business-plan spreadsheet not the return but “the light the crop needs, or the power the facility needs.” That is the whole of it — swap that one line, and the order we have been tracing all along falls back the right way round on its own.