Wall Street turns to ‘solar grazing’ sheep in its push to go green

Cornell University researcher Niko Kochendoerfer pets a sheep grazing at a solar farm in Ithaca, upstate New York during a 2021 study. Photo / Heather Ainsworth, AP

Wall Street investors are deploying flocks of sheep to trim the grass covering their solar panel installations as they seek to burnish their green credentials and win local support for sometimes divisive new renewable energy projects.

Inflation Reduction Act tax incentives and cash injections from the likes of subsidiaries of Berkshire Hathaway and quantitative hedge fund DE Shaw last year helped the US solar energy industry grow at its fastest ever pace, with enough capacity brought online to power roughly 6 million American homes.

Ranchers from New York state to California have been some of the projects’ first beneficiaries. The number of solar power sites using sheep to graze the grass and pervasive Russian thistle that grow around panels has risen tenfold over the past two years, according to not-for-profit trade body the American Solar Grazing Association.

The group estimates that 80,000 sheep now graze roughly 100,000 acres across 500 solar power sites in 27 states — reaching nooks and crannies below solar panels that bulky lawnmowers struggle to trim.

ASGA’s website says sheep “are resourceful foragers, walking to search for vegetation that might otherwise become a shady nuisance for the solar company”. It added that “for the safety of the existing, low-mount solar arrays, goats, cows, pigs and horses are not recommended”.

Jonathan Kett, executive director of special projects at DE Shaw Renewable Investments (Desri), said: “We typically sign contracts for what we call vegetation management, which is just a fancy way of saying ‘cutting the grass and weeds’, and in a lot of our portfolios we consider whether sheep are a practical option... in some instances it’s a really natural fit.”

“We’re not the ones out there shepherding the sheep around and getting in water and stuff,” he added.

Desri says it now manages about 3,000 acres of grazing land and generates enough solar energy to power the city of Denver.

Farmers are typically paid $1 per acre each time they visit a site, usually two or three times a year, with about 200 sheep required per hundred acres.

Among the converts is Berkshire Hathaway subsidiary BHE Renewables, whose Topaz and Solar Star facilities in California produce about 1.1 megawatts of power every year. An army of 5,000 sheep tends to Topaz alone.

BHE said: “We assess effectiveness of our vegetation management strategy from the previous year and examine rainfall amounts during the winter months to determine how many sheep will be needed on site to make sure we have an effective grazing strategy.”

Solar saviour for sheep industry?

The backing from some of the country’s biggest finance groups has come at an opportune time for the US sheep industry, which for decades has grappled with declining production and shrinking revenues as demand for wool and lamb meat has slumped.

Sheep and lamb production makes up less than 1 per cent of the American livestock industry, according to US meat industry lobbying group the Animal Agriculture Alliance.

“Another reason [for the industry’s decline] is historical,” said Susan Schoenian, sheep and goat specialist emeritus at the University of Maryland Extension. “During the Second World War, US soldiers were fed mutton — could’ve been goat, could’ve been sheep — and they came back saying ‘I ain’t never eating that crap again’”.

Sheep farmers have had to diversify their sources of income to survive. So-called solar grazing represents “the biggest opportunity [the sheep] industry has seen in at least a generation or more”, said Ryan Indart, a fourth-generation rancher from California.

MN8 Energy, which was spun out of Goldman Sachs in 2018, owns a 390-megawatt site in Kings County and a 2,100-acre plot in Lemoore, California — both of which have been maintained by Indart’s Solar Sheep Grazing. MN8 did not respond to a request for comment.

Solar power companies and farmers team up in “quite a grassroots kind of way”, said ASGA president Nick Armentrout. “Often it’s as simple as there’s a solar site under construction or constructed and a neighbouring farmer just stops in there and asks questions.”

Sheep grazing around solar panels at Lodestone Energy’s Kaitāia solar farm, which opened in February. Photo / Supplied

New York-based infrastructure investment group Greenbacker Capital operates a dozen solar-grazing sites across the US.

“Having a local farmer servicing a site can help keep theft down, plus you have someone who’s better equipped to steward the land than a traditional mower,” said Shannon Scarbrough, Greenbacker’s sustainability programme manager. “And in a rural community [solar grazing] adds a bit of charm.”

Desri’s executive director of development Liz Peyton said that in cases where land had been used for agriculture prior to the construction of a solar site, “it can be a hard transition for local communities”.

“If they know that the land isn’t going to be used for a dairy farm, but that sheep will still be grazing, that helps to ease some of the hesitance around the change,” Peyton added.

Some farmers have found it tricky to secure bank loans against their slowly growing solar-grazing businesses, preventing the wider industry from growing even faster than it already is.

“If you’re a small operator... and you go to the bank with a two- or three-year payout on equipment and livestock and you’ve got a one-year contract, that’s a tough sell to a banker,” said JR Howard, owner of Texas Solar Sheep.

And some green energy groups found sheep more trouble than they are worth.

“The sheep didn’t like to eat the weeds we needed them to eat, plus their hair kept getting caught in the inverters, causing equipment damage,” said a spokesperson for a Florida-based renewable energy group who asked not to be named.

“Considering all those factors, they wound up not saving money [compared with] traditional mowing,” the person said. “[The sheep] were super cute, and our customers loved them, but alas.”

Written by: George Steer in New York

© Financial Times