From wind to wings, renewable energy powering Indiana land values

WABASH, Ind. — When it comes to renewable energy and Indiana farmland values, wind and wings are the major influencers.

“We have had wind farms in Indiana for 20 years,” said Howard Halderman, president of Halderman Farm Management and Real Estate Services, based in northeastern Indiana.

The impact that wind turbines can have on farmland income and values is immediate, Halderman said.

“Wind is fairly well defined in terms of how it adds value. Our sales would suggest we’ve seen $500 to $1,000 an acre if you have a farm with a wind turbine on it,” he said.

“The turbine is on it, generating electricity and you are earning anywhere from $8,000 to maybe $15,000 per turbine for that. Basically, you are capitalizing that income stream into value and it adds $500 to $1,000 an acre.”

Solar farms being located on Midwest farmland is a new phenomenon that has sparked controversy in the ag and farming community over the best use of farmland versus the right of landowners to use their land as they wish.

Halderman said solar farms haven’t been around on Indiana farmland long enough to measure the impact on land values and farm incomes.

“The solar farms are relatively new. There are a few 5- to 20-acre solar farms, but large-scale commercial solar, where you have 1,000, 2,000, 3,000 acres, there are not any of those in operation yet,” he said.

Halderman said if the impact that wind turbines have had is a gauge, solar farms could have the same impact on farm income and land value.

“I think once those are built and they are getting their higher rate per acre, there certainly should be some push on price, but we don’t know yet,” he said.

There has been interest in land that has solar lease option.

“There are people who say if you’ve got a farm with a solar lease option on it, we are definitely interested in that. It stands to reason, if you are going to get $1,000 an acre or $1,200 an acre when the farm cash rent market is $300 to $400, that should add more value,” Halderman said.

“It won’t add dollar-for-dollar value, that farm is not going to be worth three times more than it was, but I think it will be worth more than farmland.”

Wings, or the fuel that powers aircraft, is another renewable that can impact land values. But in the case of crops that can be turned into SAF, sustainable aviation fuel, the impact is not as direct as it is with wind power.

“SAF and the demand for the oil that can be made into that, or the ethanol, will consume more corn and soybeans. That should create demand,” Halderman said.

“It is creating demand for more of our soybeans and what that means is they will be a higher price and more profitable per acre. It’s really a net income story and the more net income we generate on a farm, usually that generates more value.”

Net income per acre is a factor when buyers are considering a purchase.

“Probably the biggest indicator of farmland values is higher per acre net income. If we have $13 soybeans because of SAF versus $11.50 soybeans, it adds $1.50 of value and that is going to translate into higher land values over time, because there will be more profit per acre,” Halderman said.