영농형 태양광 추진을 위한 정책방안 마련 연구 = Promoting Agricultural Photovoltaic: A Review of Applications, Challenges, and Opportunities

다국어 초록 (Multilingual Abstract)

Ⅰ. Research Background and Objectives
1. Research background
□ To reduce greenhouse gas effectively, it is pivotal to increase the proportion of energy transition and renewable energy sources as well as the sustainable renewable energy generation models such as photovoltaics to spread renewable energy.
ㅇ Photovoltaics is the most essential means of renewable energy along with wind power to reach the national level of renewable energy supply goals and the penetration rate on par with advanced economies.
ㅇ Agrophotovoltaics refers to the power plant equipped with photovoltaic panels on the upper part of the farmland, where crops are grown underneath the panels.
- The agrophotovoltaics is expected to improve land productivity compared to the existing method of conducting power generation on separate land.
□ Since the agrophotovoltaics is expected to create additional income opportunities for farmers and to bring a positive impact not only on the solar industry but also on improving climate change and air quality, research on ways to promote the distribution is needed.
ㅇ In order to minimize the issues arising from photovoltaics in rural communities and ensure the effects from new alternatives, it is necessary to closely examine farming conditions, economic feasibility, and the legal system.
2. Research purpose
□ Examine the issues and policy status surrounding the introduction of agrophotovoltaics in Korea, analyze them from the perspectives of the environment, renewable energy supply, economic feasibility, system, and rural communities, and study the policy measures to improve its acceptability
ㅇ Review the photovoltaics projects carried out at home and abroad to review the circumstances to promote them in Korea and analyze the various issues that may arise
ㅇ At the same time, interview the parties of interest (farmers, farmers’ organizations, associated organizations, and more) to seek the ways to increase the acceptability of the system through in-depth interviews on pilot projects
Ⅱ. Current Status of Renewable Energy in Korea and the Plans for Extensive Distribution
□ Current status of renewable energy supply in Korea
ㅇ Renewable energy (renewable energy and new energy) is on the rise in terms of the total amount
- Photovoltaics increased approximately three times from 3,615MW in 2015 to 11,768MW in 2019.
- The supply of the new photovoltaic facilities surpassed 5,300MW during the first to third quarters of 2020, and the growing trend between 2015 and 2019 picked up speed.
- Since the current photovoltaics business is primarily carried out by business operators, commercial use accounts for most of the total supply performance of photovoltaics.
□ Photovoltaics supply status in rural communities
ㅇ As of October 2020, there are 26,505 cumulative photovoltaics plants, and the generation capacity is 4,022MW.
ㅇ Compared to 2,943MW in 2019, it accounts for 25% of the total solar energy capacity (11,767MW) and its proportion is also on the rise (15.1% in 2016 → 24.2% in 2019).
□ To achieve carbon neutrality by 2050, it is indispensable to uncover and introduce the competitive renewable energy sources.
ㅇ In terms of the widespread use of renewable energy, the national level of renewable energy supply goals have been raised so far through the “Third Energy Master Plan,” and the “Ninth Electricity Supply Plan” and photovoltaics has been classified as the most central resource to achieve the goals.
- The “3020 Implementation Plan for Renewable Energy” proposed the goal of supplying photovoltaics to reach the capacity of 10GW by 2030 and presented its plans to increase the proportion of renewable energy to 30-35% by 2040.
ㅇ The proportion of renewable energy is expected to rise continuously while that of coal power is projected to fall. Along with the rise in investment in renewable energy, the conditions required to lower the cost of power generation and increase eco-friendly power are estimated to be fulfilled.
Ⅲ. Analysis of the Conditions for Promoting the Distribution of Agrophotovoltaics
□ The following has been examined for the main conditions required to promote the agrophotovoltaics:
ㅇ (Agricultural environment) Although limited, facilities associated with photovoltaics may bring inevitable changes to the existing farming methods, which may lead to a fall in its acceptability among farmers.
- There are concerns that farmers may be more skeptical to accept photovoltaics as it may partially restrict the use of the aerial application and large agricultural machinery.
ㅇ (Economic feasibility) Despite a decrease in agricultural income owing to a fall in crop production, the income arising from power generation may contribute to a stable farm household income.
- The introduction of facilities is expected to increase production by 8-20% depending on the types of crops, resulting in a partial decrease in agricultural income. On the other hand, changes in the non-agricultural income earned from power generation are expected to raise the overall farm household income. However, for the market as a whole, a fall in agricultural production may affect price fluctuation and food security.
- As we can see in the photovoltaics in rural communities, the participation of non-farmers in the power generation projects is likely to generate various conflicts in rural society. Therefore, it is necessary to review the issues arising from its association with the REC and eco-friendly farmhouse certification to secure the income earned from power generation and encourage farmers to participate.
ㅇ (Legal system) To install and operate the photovoltaic power generation facilities for farms on farmland, the laws and regulations such as the Farmland Act must present the ways to select the target areas and project implementing parties, land-use methods, project permits, and follow-up management plans.
- Currently, in the demonstration and pilot projects, agrophotovoltaics facilities are introduced on farmland after obtaining temporary use permits (three years), but farmers carry a heavy burden of the search cost due to the discrepancy with the economic lifespan of power generation facilities (20-25 years), and the non-standardization of target crops and facilities.
- In the current Farmland Act, farmland is divided into agricultural promotion areas and non-agricultural promotion areas, and farmland constituting non-agricultural promotion areas is referred to as the marginal farmland. Agrophotovoltaic facilities can be installed after the conversion of farmland in these areas under the current Act.
- The agricultural promotion area is classified into the agricultural promotion zone and agricultural protection zone. The agricultural protection zone is an area designed to protect the conditions for practicing farming in the agricultural promotion zone, and facilities can be installed after the conversion of farmland and the temporary use permit may last up to eight years.
- The agricultural promotion zone is referred to as absolute farmland. It is well readjusted and yields high productivity due to the well-integrated agricultural infrastructure, but the current statute does not allow facilities to be built here after the conversion of farmland. If the laws and regulations do allow agricultural promotion zones to install the facilities, they are highly likely to be concentrated in these zones since they are valued low.
- If non-farmers are allowed to participate in the project, the continuity of agricultural practice cannot be guaranteed and it is contradictory to the purpose of the agrophotovoltaics. Therefore, it is necessary for the law to determine the principal agents of the installation and the investment of agrophotovoltaics and to specify farmland owners/farmers who are capable of conducting the project as the principal agents.
Table 1. Farmland classification and whether it is possible to install photovoltaics generators for farming
ㅇ The demonstration project allowed us to identify the potential to cultivate various crops such as rice, cabbage, and potatoes, and to increase the farm household income due to additional income earned from power generation, despite a partial decrease in agricultural income. Therefore, the project has been expanded into a pilot project.
- As for the rice cultivation that requires relatively complicated conditions, such as the conditions that allow farmers to use large agricultural machinery or that prevent the corrosion of structures, the verification of associated agricultural technology is in progress in a wide variety of aspects.
· The empirical research confirms the environment to grow crops and the level of reduction in the production rate, and research designed to find crop types suitable for the agrophotovoltaics, demonstrate the farming methods and develop the standard models as well as the demonstration project for cultivation models have been in progress since 2020.
· To increase and manage the farmhouse profits, discussions will be held with farmers groups, experts, and the related government agencies concerning the implementing agents, installation standards, and follow-up management plans, and promotion plans will be developed (2021-), while the Rural Development Administration is leading the research associated with the standard specifications such as the installation standards (2021~2022).
Ⅳ. Review of the Key Issues Associated with the Promoted Distribution of Agrophotovoltaics
1. Environmental issues
□ Issues on the heavy metal pollution of land and agricultural products
ㅇ The tests carried out on the heavy metals pollution in soil and crops in most of the current demonstration and pilot projects found that the issue caused by heavy metals pollution due to the introduction of the agrophotovoltaics facilities was insignificant.
- The status of some pilot projects in Korea has reported that there is little concern over the heavy metals pollution in the soil140) and the data analyzed at the request of an associated agency has confirmed that the level of heavy metals was within the acceptable scope and there was no significant difference from the control group of the farmland.141)
- According to the data of Yun Seong-tak (2021) presented at the Photovoltaic Market Insight conference held in 2021142), eight types of heavy metals, including arsenic, were detected below the standard values in the soil of the plot with photovoltaic modules and the control plot with no such installations that cultivate both potatoes and napa cabbages in the component analysis.
□ Issues associated with the negative impact on the landscape
ㅇ There are social concerns about the negative impact on the landscape and the need for management, but the current legal structure bears limitations for systematic management.
- In 2017, the Ministry of Commerce, Industry and Energy announced the “Guidelines for the Location of the Photovoltaic Power Plants” but they were not legally binding, and the guidelines ceased to be effective in 2020, thus requiring new guidelines in consideration of the regional acceptability and environmental impact.
- As for the agrophotovoltaics, in particular, the size of the facilities or panels can be reduced compared to the conventional agrophotovoltaics, and discussions are ongoing to limit the capacity of the facilities to 100kW (approx. 2,300 square meters) irrespective of the size of the farmland owned by individuals. In addition, the facilities will be improved to reduce the number of panels and supports and widen the gap, thus ensuring visibility.
2. Issues arising from the supply of renewable energy
□ Issues associated with the potential supply and separation distance
ㅇ Lee Chang Hoon (2019) estimated the areas where agrophotovoltaics could be installed on the entire farmland and suggested the potential capacity.
Table 2. Areas where it is possible to install agrophotovoltaics
Table 3. Farmland requirements
- If the amount of photovoltaics required to achieve the target scenario of the “strategy to promote carbon neutrality by 2050” is met with agrophotovoltaics, approximately 229GW out of the total installed photovoltaics capacity of 205GW are coverable by using 20% of the farmland (based on the 30% solar cell efficiency).
ㅇ Considering the regulations on the separation distance of each local government, except for the agricultural promotion zones, the absolute area of farmland available is likely to be insufficient, and thus, it is necessary to review this issue in the plans associated with renewable energy.
3. Economic issues
□ Electricity and power generation costs
ㅇ The levelized cost of electricity (LCOE) was calculated to determine the validity of policy enforcement associated with agrophotovoltaics projects, and it was between 129.1 and 147.9 won/kWh depending on the lifespan.
- It is higher than photovoltaics in rural communities, which is 133 won/kWh, and due to the characteristics of the agrophotovoltaics that record a high initial cost and high annual operating costs, despite the low land cost, the higher power generation costs were deduced.143)
□ Impact of the agrophotovoltaics on the farm household income ㅇ Agrophotovoltaic facilities with a capacity of 99kW are expected to generate approximately 120,000 kWh and farm households are projected to earn an additional net profit worth 5.55 million KRW per annum.
- If general farm households that introduce the agrophotovoltaics receive financial support and subsidies for electricity prices, each household is estimated to earn an additional 4 million to 9 million KRW annually.
- Small-scale farms that introduce agrophotovoltaics will experience relatively small changes in crop yields and profits, whereas farms that cultivate rice are projected to benefit from a large growth rate in their total farm household income as their income earned from the sale of electricity will be greater compared to their previous non-agricultural income.
ㅇ The comparison of different scenarios associated with the reduction in the agricultural production, changes in the agricultural income, the cost of the installation of the agrophotovoltaics, and changes in the non-agricultural income earned from the electricity generation shows that the availability of the farmer’s own capital, financial support, and the electricity price will have a large impact on the farm household income.
- (Farmer’s own capital and Financial support) If the amount of the farmer’s own capital available grows further, a farm household income may also rise further.
· If the available amount of the farmer’s own capital is insufficient, the reliance on the financial product will be greater, and thus, the non-agricultural income may fall compared to those with a high proportion of their own capital.
· If financial support with a low interest rate is introduced on account of the farm household’s debt and additional investment potential, the effect of increasing the farm household income may be greater. It is necessary to review the application of a low interest rate in consideration of the importance of the distribution of renewable energy and an increase in the farm household income.
- If the repayment schedule and the term of a loan are extended, farmers will be less burdened to make the initial repayment, leading to the rise in the average farm household income over 20 years. On the other hand, if they are to be reduced, the amount subject to repayment each year will increase, causing the farm household income to fall due to a decrease in the non-agricultural income.
- (Electricity price) It is important to reduce volatility in the market formation stage since the non-agricultural income earned from electricity revenue varies greatly according to the electricity price.
· It is necessary to develop measures to ensure stable profits, such as raising the REC weight and Korean FIT in consideration of the fact that the non-agricultural income varies greatly for the electricity price.
- (Technological development and market formation) The cost, which is approximately 40% greater than that of photovoltaics in rural communities, is expected to fall due to the optimization of facilities such as panel supports, a fall in the unit price caused by the expansion of the solar panel market for farms, and the introduction of an operation by each community and cooperative.
4. Institutional issues144)
□ A number of revision bills to the Farmland Act have been proposed, including allowing the installation of agrophotovoltaic facilities in the agricultural promotion zone and self-cultivating farmers, introducing the concept of the “combined use of farmland”, and extending the temporary period for other uses of farmland to a maximum of 20 years.
ㅇ Since the agricultural promotion zone is an area key to maintaining agricultural productivity, pure agricultural activities are ideal for the efficient use and preservation of farmland, and it is necessary to come up with measures for the limited introduction of facilities each year for only farmland owned by self-cultivating farmers in consideration of the concerns in the agricultural industry as a whole, such as the food security crisis caused by the indiscriminate promotion of agrophotovoltaics, damage to farmland, and harms inflicted upon tenant farmers from speculative capital.145)
- Since the land value of the agricultural promotion zone is lower than that of farmland that does not fall under the category of the agricultural promotion zone, if the agrophotovoltaic facilities become available for installation, the investment will be made heavily on the zone, giving rise to the risk of a price increase.146)
- Regardless of whether the regulations on the target farmland are relaxed or not, allowing non-farmers to install the facilities does not satisfy the purpose of introducing the agrophotovoltaics, and therefore, it is necessary to limit those who are eligible to carry out the project to self-cultivating farmers on account of the impact it may have on tenant farmers and concerns in the local community.
ㅇ It is necessary to review the conversion of farmland outside the agricultural promotion zone or change in the temporary use period for other purposes, and the introduction of the concept of dual land use that is consistent with the purpose of farmland used for photovoltaics.
- The dual use of farmland is distinct from the conversion of existing farmland or temporary use for other purposes, and this concept allows agrophotovoltaics only for self-cultivating farmland outside than agricultural promotion zones.
ㅇ It is necessary to introduce measures to regulate the specific follow-up management of agrophotovoltaic facilities and agricultural activities.
- For the follow-up management, it is necessary to reduce the incentives in the electricity market for facilities that do not satisfy the requirements for continuous farming, and to lay down the regulations on the cancellation of temporary use for other purposes for farmland.
5. Issues arising from the acceptability of residents in rural communities
□ In the survey on the farmers’ perception towards photovoltaics projects, negative opinions about photovoltaics in rural communities were slightly higher, but farmers who own land showed great interest in the agrophotovoltaics.
ㅇ According to the survey on the perception of farmers towards photovoltaics projects in rural communities conducted by the Korea Rural Economic Institute (2019),147) those who owned land were relatively favorable to the installation of the agrophotovoltaics compared to the photovoltaics for rural communities.
- Irrespective as to whether a farmer owns the land, many opposed to the installation of the power generation facilities in rural communities, and the main reasons for their disapproval were the negative impact on the landscape (25.6%) and their concerns over environmental pollution (23.1%), whereas those who approved favored the “additional income to farms and the continuous income generation (42.9%).”
- The number of farmers willing to install photovoltaic facilities (excluding the rooftops of buildings) on their own land was high at 46.8%, and in the event of installing photovoltaic facilities on their own land, they preferred to do so individually (86.4%), rather than with the community as a whole, and they favored agrophotovoltaics as the type of installation (55.9%).
- The opinion of the farmers in favor of the installation of agrophotovoltaic facilities was 42.1%, which is relatively higher than that of 28.1% against it, but there were concerns over the burden of the initial investment cost, environmental pollution, and the impact on the landscape aesthetics.
ㅇ It is necessary to continue to conduct research on the issues in regard to the farming environment that may arise from introducing agrophotovoltaic facilities to farmers to provide information and review the operating method in which cooperatives or local governments participate so as to maximize the effect brought by agrophotovoltaics.
- Since we could identify that many had concerns over the negative impact on the landscape, it is important to share information on the issue associated with environmental pollution and its impact on the landscape.
- As a means to increase resident acceptability, it may need to be considered to grant the right to restrict the capacity, follow-up management, and separation distance to each region so as to ensure that the projects are carried out tailored to each region or community.
- In Germany, people sought to comprehend the structure of conflicts among stakeholders on land use during the introduction of agrophotovoltaics through a series of workshops with residents related to the installation of agrophotovoltaics. (Ketzer, D., 2020)
Ⅴ. Conclusion and Policy Recommendations
1. Power generation business
□ It is necessary to develop various incentives by stage to ensure the stability of the promotion of agrophotovoltaics and induce the early entry of participants.
ㅇ To secure the stability of the promotion of agrophotovoltaics, it is necessary to review the introduction of systems for the widespread distribution at the initial stage, such as a system to provide subsidies for the power generation system for small-scale photovoltaic business operators.
- Under the current renewable portfolio standards (RPS), it is necessary to raise the weight of the renewable energy certificates (REC) if the unit price for power generation is to be considered.
- Since farmers need to bear high investment costs and the risks associated with agrophotovoltaics, it is necessary for the government to purchase electricity at a fixed price for a certain period of time such as the feed-in tariff at the initial distribution stage so as to secure the stable income for future electricity production, thereby increasing the stability of investment and allow small- to medium-sized power generation.
- The feed-in tariff (FIT) should take the form of feed-in premium (FIP) and offer cost-based compensation for energy producers who sell at market price, thereby tying it to the market price and reducing the government burden.
ㅇ When setting the standard price, it is necessary to reduce the burden on the initial cost by reflecting the installation cost (installation of mounts, etc.), and to provide flexible facility financing support depending on the size of the project.
- It is necessary to lower the interest rate (around 1%) and to provide support for long-term loans (20 years or longer) or to extend the term of the loan or the period of repayment by installment.
- In addition to the government subsidies for a certain percentage for farmers and facility funds, it is necessary to consider support for drainage systems, road construction, and follow-up management costs.
□ It is necessary to select and operate areas for the integrated implementation of projects in consideration of the efficiency and accuracy of the power system connection and management and supervision.
ㅇ Efforts to improve resident acceptance through incentives for community projects and those participated by farmers
- Provide economic incentives to form and participate in associations, and to prevent the indiscriminate implementation of projects, clarify the conditions such as the number of participants from associations, voting rights, project size, and restriction on the participation of municipalities to provide selective support for the cooperative associations of the citizens
- Considering that projects carried out for each community and cooperative are part of the local community development projects, it is necessary to fully review the priority system connection or cost support, and facility cost support depending on the size of the power generation facilities.
ㅇ In order to restrict the indiscriminate introduction, it is necessary to introduce the regulations that delegate the head of each municipality for the local community to have the voting rights for the separation distance, types of crops, and business location.
2. Aspects of acceptability in rural communities
□ It is necessary to increase the scale and number of demonstration and pilot projects currently in progress in the agricultural sector to develop a number of successful models and provide accurate technical, environmental, and economic information for agrophotovoltaics to endeavor to improve the social perception.
ㅇ It is necessary to attempt to introduce various designs, scales, facility types, crop types, and farming methods to ensure that the relevant information is accurately relayed to farmers and rural communities, and to continuously relay information on the progress and process.
□ It is necessary to take a mid- to long-term approach to promote the revision to the Farmland Act and policies acceptable to the local community, and first promote the associated policies in the farmland where the promotion is available under the current laws and regulations such as self-cultivating farmland, small-scale farmland, and non-agricultural promotion zones.
ㅇ Revise the current Farmland Act or Enforcement Decree thereof to extend the period of the temporary use permit to 20 to 25 years to suit the photovoltaic business model, and promote the policies for the areas where installation is not available under the current law, such as the agricultural promotion zones, if a request has been made or an agreement has been reached in the farmers’ society
ㅇ Apply the proposed concept of dual use to design the agrophotovoltaic facilities as “agricultural production assistance facilities,” and review the ways to apply various tax support and direct payments for the existing farmland
ㅇ Select items that are relatively free from food security issues that rural communities are concerned about and selectively grant the temporary use permits
- It is also reasonable to review a method of restricting entry into the market by limiting certain items through laws or local ordinances or excluding non-conforming items from the financial support projects for new and renewable energy and the special cases for electricity purchase.
ㅇ Introduce the “agrophotovoltaic model for resident associations” that guarantees to replace any reduced income of farmers, such as tenant farmers, with the profits of the participants, but it is also necessary to review the setting of conditions such as the cancellation of business approval in case the crop yield fails to meet the threshold for three consecutive years, prohibition on the use of materials that harm the farmland, and the prohibition on the cultivation of any agricultural products other than those defined under the Presidential Decree.
□ Make the communication and consultation with local residents mandatory to promote a voluntary spread within the local community
ㅇ Although the introduction may take some time, it is necessary to come up with the measures to voluntarily address the conflict between participating and non-participating residents.
ㅇ During the actual implementation of the project, as in the case found in Japan, it should be mandatory to submit a “plan for the introduction of agrophotovoltaics” and make sure in advance whether the plan provides that an agreement has been reached with local residents.
ㅇ It is necessary to introduce a separate agency exclusively for tasks that may contribute towards minimizing any harm to local residents throughout the project implementation for any difference of opinion between the business operator and the residents.
□ In the future, it is necessary to continue follow-up research on the spread of combined farming and renewable energy, by means such as the measures to share social benefits in rural communities, changes in the income of tenant farmers, and payment conditions for the direct payment system to ensure public interest.