Co-locating Agriculture and Solar: How Agrivoltaics is the New Standard for Renewable Development in Australia

At many industry and planning forums, one topic keeps surfacing: Agrivoltaics – the balance of solar energy development with the protection of agricultural land. The configuration was first conceived in 1981 by two Germans, due to then-increasing concerns regarding land scarcity, food security, and energy demand.

Five years ago, agrivoltaics wasn’t on the radar. Today, whether through sheep grazing or crop production, the practice is becoming a core component of many large-scale solar projects in Australia.

Why the shift? The need for the clean energy transition. In 2023, only 35% of Australia’s total electricity generation was from renewable sources (16% of this was solar energy). For a continent described as a “sunburnt country”, it doesn’t seem like enough is being done. Additionally, taking productive land out of agriculture is a major concern for rural communities, councils, and landholders. Local governments want to preserve food production, communities want to retain their agricultural identity, and developers need to move projects forward without unnecessary roadblocks. The co-location of solar and agriculture offers a solution that meets all these needs — environmentally, economically, and socially.

Why Co-Location Is Becoming a Must-Have

Discussions about co-locating solar with agriculture usually start in a range of ways. Sometimes, farmers want to continue using their land productively while taking advantage of the financial benefits of solar. In other cases, developers are actively seeking out co-location options as a way to align with local planning frameworks or secure social licences to operate. We’ve also seen local councils begin to require it — either formally through planning conditions or informally as a clear preference.

For example, in Victoria and New South Wales, several councils are beginning to favour projects that demonstrate long-term agricultural compatibility, especially in areas zoned for primary production. These expectations are driving a broader shift across the renewables industry.

No matter how the conversation starts, the outcome is the same: co-location is no longer a “nice to have” — it's fast becoming the expected standard.

The Tangible Benefits of Co-Locating Solar and Agriculture

This isn’t just about getting a permit over the line. When planned well, co-located projects deliver real benefits for landholders, developers, and the environment.

Smoother Approvals and Stronger Community Support

Large-scale solar farms can face opposition in rural Australia, especially when they’re seen as replacing food production with energy generation. However, when solar farms incorporate ongoing agricultural use — like grazing or cropping — they are far more likely to win local support and meet planning requirements.

Projects that maintain the productive use of the land are easier to justify in high-value farming regions and often encounter fewer objections during the approvals process.

Livestock Grazing: A Proven Model

Sheep grazing under and around solar panels is the most common and established form of co-location in Australia. This model benefits both solar operators and landholders: developers reduce their vegetation management costs, and farmers retain the ability to earn income from grazing. The University of Queensland’s (UQ) Gatton Solar Farm has had grazing sheep since 2016 and have found the panels help improve vegetation growth and therefore feed for the animals and provide protection from the elements – this is considered to be one of the main benefits in Queensland where wild dog attacks to livestock is a prevalent issue. Such is the success of the program that UQ’s new solar farm in southeast Queensland is incorporating this cogeneration into its design.

Sheep grazing also reduces maintenance costs for panels (for mowing). There’s even a growing network of service providers who supply sheep to solar farms, creating a new rural services sector around dual-use land management.

However, not all sites or livestock are suitable. Biosecurity concerns (especially near national parks) and site-specific constraints may limit livestock use. AECN Australia’s New England Renewable Energy Zone (REZ) in New South Wales, where the first stage is a solar farm with grazing sheep, has identified early issues with larger livestock – “You can only have sheep underneath the panels. Cattle can cause too much damage rubbing on them.” Australia’s cattle industry (meat and dairy) was estimated to be around $20 billion in the fiscal year 2022-23, compared to the value of sheep (meat and wool) being $7.1 billion in the same year. Cattle require substantially more land for grazing. The co-generation of solar and livestock could be limited for a portion of Australian farmers.

Supporting Biodiversity and Crop Production

Solar panels are spaced apart to avoid losses from shading. This means rain and sunlight can still fall between them, allowing vegetation to grow and livestock to graze and shelter. The panels can create microclimates that reduce water evaporation and lower heat stress, conditions that can benefit certain crops or native groundcovers. In some cases, partial shading or moisture collected overnight has been shown to improve yields of shade-tolerant crops or support more resilient ground cover, especially in drought-prone areas. The shade provided by panels can reduce soil temperature and maintain or increase soil moisture. The evaporative cooling provided by the underlying plant cover can increase the efficiency of solar panels if they get too hot in the Australian sun, creating a mutualistic relationship.  

Challenges Developers Need to Consider

Co-locating solar and agriculture offers many benefits, but it also introduces new design and operational complexities.

• Panel Height and Layout: If machinery access or grazing for cattle are required, panel heights may need to be increased, adding to project costs.

• Long-Term Viability: Not all sites are managed long-term by the original developer. Any co-located land use must be practical for future operators to maintain.

• Local Limitations: Not all land or climates are suitable. Soil type, rainfall, and farm enterprise type all affect whether cropping, grazing, or habitat regeneration make sense. One reason desert solar farms aren’t always viable is because the harsh environment can reduce the efficiency of the solar panels (including dust and sand accumulating and covering the panels)

• In general, Australia is still very reliant on fossil fuels: the transition to renewable energy is still taking place. An innovative practice like agrivoltaics could take longer to implement.

Despite these challenges, the push from councils and communities means that developers will increasingly need to incorporate co-location strategies into their feasibility assessments and design decisions.

The Future of Solar Development in Australia

The future of solar in Australia is not either/or — it’s both: clean energy and ongoing agricultural use, solar farms, and working landscapes.

As planning regulations evolve and public expectations shift, co-locating agriculture and solar will become a core part of project development. Projects that preserve the productivity and character of rural land will stand out, both to regulators and to the communities they’re built in.

It’s not just a smarter way forward — it’s the sustainable, long-term model for energy development in regional Australia.

Curious to learn how this trend is playing out globally? Check out this article by Montrose Environmental on agrivoltaics and smarter solar permitting: https://montrose-env.com/blog/agrivoltaics-a-smarter-path-to-solar-permits-and-dual-land-use/