Conference Agenda

California's ambitious renewable energy targets will require that considerable land be allocated to solar-powered electricity generation infrastructure, which has a significantly lower energy footprint than traditional fossil-fueled power plants. The role that the Central Valley (CV) will play in this transition is significant, as land conversion in this region comes with the opportunity cost of lost revenue from agriculture. The decision of whether and how to protect land currently being used for farming will thus be crucial to the state's future agricultural productivity and environmental sustainability. This paper examines how land allocation to solar development and cropland differs under two decision-making perspectives, one that only optimizes private benefits (the Land Manager) and another that considers social welfare (the Central Planner). We use a two-stage, spatially-explicit optimization model to simulate solar power capacity targets ranging from 0 to 50 GW, considering agricultural profits, solar revenues, and environmental benefits. This allows us to quantify economic tradeoffs across these various benefits and the gap between the solution that is preferred by private landholders and the socially optimal. Our findings suggest that the misalignment between privately and socially optimal solar siting may require additional incentives, such as public financing of transmission infrastructure or lease rate offsets through subsidies, to achieve capacity targets over 25 GW. In addition, socially optimal PV siting has the potential to reduce overdraft in the southern CV by 80%.