- Agrivoltaic sheep grazing delivers EBITDA margins up to 40% and ROIs up to 43%, outperforming conventional agriculture.
- Breeding lambs on-site offers higher margins, while purchasing lambs at auction provides greater ROI potential.
- The model enhances land-use efficiency, reduces emissions, and supports rural economic growth.
Integrating sheep grazing into photovoltaic (PV) farms is emerging as a highly profitable and sustainable solution for both energy and agricultural sectors. A recent study examining Canadian case studies from 200 kW to 465 MW demonstrates that agrivoltaic sheep systems can generate robust cash flows, with EBITDA margins ranging from 10% to 22% for auction-based models and 22% to 40% for on-farm breeding operations. These results surpass the agriculture industry average of 7.32%, signaling strong revenue stability from grazing services under solar panels.
Return on investment (ROI) for breeding models ranges between 16% and 31%, while auction-based lamb operations show ROI potential of 22% to 43%, highlighting trade-offs between operational efficiency and initial investment requirements. Sensitivity analyses indicate that these systems remain resilient to fluctuations in lamb prices, interest rates, and taxes, positioning agrivoltaics as a stable investment option.
Beyond financial performance, agrivoltaics optimizes land use by combining solar energy generation with sustainable livestock farming. By leveraging pasture beneath solar panels, farms can reduce emissions, improve public perception of renewable energy, and create new economic opportunities in rural communities. With Canada’s abundant sheep supply, the study suggests the nation could become a leading exporter of sustainably produced lamb, supporting job creation and rural development.
The research underscores the long-term growth potential of agrivoltaics. While economies of scale may take time to fully materialize, expanding operations can enhance profitability and ROI. By aligning renewable energy production with regenerative land use and agricultural innovation, agrivoltaics offers a transformative pathway for energy and farming sectors seeking both financial returns and environmental benefits.
Link to the full paper HERE
Author: Bryan Groenendaal
