Solar energy developers lose access to two federal clean-energy tax credits — the investment tax credit and the clean electricity production credit — if they install solar panels on land the USDA classifies as 'prime farmland' or 'unique farmland.' These classifications cover highly productive agricultural soils defined in existing federal regulations (7 C.F.R. Part 657). The denial applies to any solar energy property or facility placed in service after the bill becomes law. Landowners or companies currently planning to build solar installations on USDA-classified prime or unique farmland would need to relocate projects to non-classified land to qualify for the credits.
Corporate Benefits
- Energy tax credits for solar installations on prime/unique farmland — both credits denied
Environmental Concerns
- Federal solar energy credit on prime/unique farmland — clean energy incentive removed
Congressional Summary
Protect Agriculture, Nutrients, and Essential Lands from Solar Act or the PANELS ActThis bill excludes expenses for solar property placed in service on prime or unique farmland from the energy investment tax credit. The bill also excludes solar facilities placed on prime or unique farmland from the clean electricity production tax credit.Under current law, businesses may be able to claim an energy investment tax credit for qualified solar property placed into service before January 1, 2025. This bill excludes expenses for solar property placed into service on prime or unique farmland (e.g., land with the best combination of physical and chemical characteristics for the production of food and other related uses) from the energy investment tax credit.Further, under current law, a business may also be able to claim the clean electricity production tax credit for the production of electricity using a qualified facility that has no greenhouse gas emissions. The amount of the tax credit is based on the amount of electricity produced and sold by a qualified facility placed into service in 2025 or after. This bill modifies the definition of qualified facility to exclude solar facilities placed on prime or unique farmland.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-02-12
- Date Added
- 2026-06-08
- Source
- Congress.gov →
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