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Indiana Farms Save More With Solar Than Homes Do

Farms in Indiana could save up to 92% by using solar energy rather than traditional grid-sourced electricity, whereas homes in the same state would only save approximately 50%.

Purdue-1

Image Credit: Wally Tyner amid solar panels on the roof of Purdue’s Knoy Hall via Purdue Agricultural Communication / Tom Campbell

This, according to a new study conducted by economists at Purdue University and published in the journal Energy Policy.

According to the study, current energy policies play “key roles” in tempting people to solar energy in Indiana, but businesses have a one-up on the average consumer, a tax policy option known as depreciation, whereby businesses can deduct their investment in solar from their revenues.

Subsequently, according to the benefit cost analysis conducted by Purdue economists Wally Tyner and graduate student Jinho Jung, if homeowners were allowed the same tax options, they could be saving a lot more on the switch to solar.

“Under current law and policy, whether you lose or make money with solar as an Indiana homeowner is like throwing the dice – you don’t know,” said Tyner, the James and Lois Ackerman Professor of Agricultural Economics. “But solar is a clear economical choice for farm businesses. The tax advantage from depreciation makes a huge difference in the overall economics.”

Tyner believes that consumers are currently facing a simple question — is it, or is it not cheaper to own and run solar electricity when compared to existing grid-sourced electricity? This is particularly an issue in states like Indiana, where electricity costs are already lower than the national average. However, a switch to solar in a state like Indiana — which acquires 95% of its electricity from cheap coal power — could be a mammoth opportunity for the solar energy industry.

“If you put solar energy and coal power on a level playing field, solar emerges as a clear winner,” Tyner said. “Many more homes in this state would have it.”

 
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