FARM Act of 2025: No More Tax Breaks for Solar and Wind Farms on Ag Land

The "Future Agriculture Retention and Management Act of 2025," or FARM Act, aims to protect farmland by cutting tax incentives for renewable energy projects on agricultural properties. Specifically, it targets public utilities building solar or wind facilities on land designated for agriculture.

Powering Down on Farmland

This bill changes the rules for federal tax credits. Here's the deal:

• No Credit for Solar: Section 2 amends Section 48 of the Internal Revenue Code, blocking public utilities from claiming tax credits for solar energy equipment installed on "agricultural land." "Agricultural land" is defined as "eligible land" as per section 1240A of the Food Security Act of 1985. So, if it's land meant for farming, solar farms run by utilities are out of luck for those sweet tax breaks.
• Wind Power Also Affected: Section 45(e)(6) of the Internal Revenue Code gets a tweak, too. Public utilities can't get tax credits for electricity produced by wind or solar facilities placed on agricultural land after this Act becomes law. Same definition of "agricultural land" applies.
• Timing is Everything: These changes kick in for any equipment "placed in service" after the FARM Act is enacted. (Section 2).

Real-World Rancher

Imagine a rancher in West Texas who's been approached by a utility company to lease land for a solar farm. The deal looked good, offering a steady income stream. Under the FARM Act, that utility might back out because the tax credits that made the project profitable are gone. This could mean less income for the rancher, but it also keeps that land available for grazing cattle.

The Fine Print

• "Public Utility" Matters: This bill specifically targets public utilities, as defined in section 136(c)(2) of the Internal Revenue Code. Private developers or smaller cooperatives might not be affected (though you'd need a tax lawyer to be sure).
• "Eligible Land" is Key: The definition of "eligible land" under the Food Security Act of 1985 is going to be crucial. Expect some legal wrangling over what land qualifies as "agricultural."

The Big Picture

The FARM Act reflects a tension between two important goals: promoting renewable energy and preserving agricultural land. By removing tax incentives, the bill makes it less financially attractive for utilities to build solar and wind farms on land that could be used for food production. This could slow down the expansion of renewable energy in some areas, but it might also protect farmland from being converted to other uses. There is a potential conflict of interest, however. The bill's sponsor has strong ties to the food processing and sales industry, which may benefit from policies that prioritize agricultural land use over renewable energy development. The bill essentially forces a choice: where do we want our power to come from, and at what cost?