Investing in agrivoltaics: dual land use, revenues and tax leverage at a glance

Agrivoltaics, agri-PV for short, combines agriculture and solar power on the same land: beneath and between elevated modules, arable or grassland farming continues while the installation generates electricity. One area, two yields. From an investor's point of view it has become an asset class in its own right, with ongoing electricity revenues and, in the case of an entrepreneurial holding, a tax lever. The obvious question follows: how does a private individual get in, and what sits behind it economically?

What exactly is agrivoltaics?

Agrivoltaics is the simultaneous use of an area for both agriculture and solar generation. The classic conflict, land for food or land for energy, is resolved by layering the two. Technically, the German standard DIN SPEC 91434 distinguishes two basic types: high-mounted installations under which machinery can keep working (over special crops or grassland, say), and near-ground installations where the modules sit in the gaps between rows. Characteristically, the agricultural use must be largely preserved; the DIN SPEC requires that a large share of the land's reference yield keep being produced and that the loss of usable area stay tightly limited.

For the crops below, the partial shading can even be an advantage: the modules provide shade and protect against heat, hail and heavy rain, depending on the crop, with steadier yields in extreme years. For the investor, the other side matters most: a real, long-lived asset is created, with plannable electricity revenues over typically 20 to 30 years, and a societal benefit that can be measured (electricity generated, CO₂ tonnes avoided, usable farmland preserved).

How does an agri-PV plant make money?

The revenues come from selling the electricity generated, via two routes that often combine. First, the EEG feed-in tariff: agri-PV is addressed in the German Renewable Energy Act as a 'special solar installation' in a dedicated tender segment and supported with a bonus that rewards the dual use. A tender award secures a calculable tariff over the support period. Second, the long-term power purchase agreement (PPA): here the plant sells its electricity for years at a contractually fixed price to an offtaker, plannable, but dependent on the counterparty's creditworthiness.

Both routes share the same core: they make part of the revenue plannable over long periods and thereby reduce dependence on the volatile wholesale power price. That structurally distinguishes agri-PV from a pure merchant model, and is at the same time why the reliability of the EEG award or PPA contract is the single most important revenue question of any project.

How can you invest in agri-PV?

As with battery storage, there are essentially four routes in. They differ not only in the minimum outlay, but fundamentally in what you are invested in:

Shares and ETFs of solar and technology groups are the most liquid but most impersonal route. You hold stakes in companies of the sector, not in a German agri-PV plant and its revenues. Funds pool capital into a portfolio, professionally managed, but with several fee layers and usually no direct §7g effect. Crowdinvesting invests you through subordinated loans at a fixed rate, but with no stake in the asset. The direct investment, finally, makes you an entrepreneurial co-owner of the plant: a direct link to the real revenues, and the only route with a tax lever. The four routes are compared in more detail using battery storage as the example in Investing in battery storage: the options at a glance; the difference between such a direct investment and a fund wrapper is set out in detail in Direct investment or closed-end fund? The structural comparison.

Which tax lever applies to agri-PV?

The tax lever applies only to the entrepreneurial direct investment. And it is the same one as for other energy real assets. Because you are invested in the depreciable asset itself, you can claim the investment deduction (IAB) under §7g EStG of up to 50 % ahead of the acquisition, and in the investment year use the special depreciation (Sonder-AfA) under §7g(5) EStG plus regular depreciation. Together these effects pull a substantial part of the investment forward for tax purposes into the first years. This lowers the tax burden in the investment year and frees up liquidity that carries part of the equity.

The mechanics for agri-PV are the same as for battery storage; the worked example is in IAB under §7g EStG: example calculation for battery storage, the interplay of special and declining-balance depreciation in Sonder-AfA §7g (5) vs. declining-balance AfA §7 (2): which combination, when?. Why the effective equity outlay, thanks to bank financing and the tax effect, often turns out smaller than expected is set out in How much equity is actually required?. Important: the IAB carries its own conditions and deadlines, and the concrete structuring belongs with your tax adviser in every case. This article does not replace tax advice.

What is realistic with agri-PV?

For agri-PV projects, equity returns (IRR) of roughly 7 to 10 % are discussed in the market, as a scenario, not a promise. The actual return depends on the specific project: on site and yield forecast, on the mix of EEG tariff and PPA, on the financing and on the individual tax situation. We give no return promises. And a guaranteed percentage on a marketing sheet is a warning sign rather than a seal of quality. What is serious is a calculation that discloses its assumptions and shows sensitivities. Direct investments remain entrepreneurial holdings that carry a corresponding risk of loss.

Agri-PV, classic PV or battery storage?

Agri-PV, ground-mounted PV and battery storage are not competitors but three building blocks of the same energy transition with different profiles. Agri-PV combines a plannable EEG/PPA revenue base with the societal added value of dual land use. Battery storage earns more from the volatility of the power markets and therefore has a different risk-reward profile, set out in Battery storage returns: where the revenue comes from, and what is realistic. Anyone investing over several years can combine both real assets and thereby diversify the portfolio across different revenue drivers; how energy assets fit into the wider real-asset family is shown in Real assets as inflation protection: what actually protects and where energy assets fit in. In the end, what matters is less the asset class than the quality of the individual project and provider. The warning signs to watch for are in How to tell a trustworthy provider of energy direct investments.

Whom does agri-PV suit?

• Small entry, full flexibility: shares & ETFs, from just a few euros, tradable any time, but with no link to the concrete plant and no tax lever.
• Diversification with limited effort: funds, pooled across several projects, but fee-laden and tied up long term.
• Fixed return, low threshold: crowdinvesting, small outlay and a predictable rate, but subordinated risk and no real asset.
• High earners with a tax burden and a real-asset focus: direct investment, higher outlay and entrepreneurial risk, but a real asset, plannable revenues and the §7g tax lever.

Whether agri-PV suits you, and in what form, is, in the end, a question of outlay, time horizon and tax situation. In a non-binding first call we map out the options and, if it fits, work the direct investment through on your concrete numbers, with disclosed assumptions instead of a marketing figure.