Solar Farms and Property Values in Virginia: What Homeowners Need to Know

By: Zhenshan Chen, an assistant professor in the Department of Agricultural and Applied Economics at Virginia Tech. His research focuses on environmental economics, land use, coastal flooding, and renewable energy. His recent study shows how renewable energy infrastructure affects local communities and property markets.

Summary

This paper examines how utility-scale solar development has affected residential property values across Virginia, using more than 100,000 home sales from 2011 to 2024 near 40 solar facilities installed before 2021. The study uses a difference-in-differences approach to compare homes within three miles of solar sites to similar homes farther away. The findings show that after installation, properties within three miles experienced an average decline in value of 5.5 percent, or about $18,500 for a typical $336,000 home.

The paper places Virginia’s results within broader national research, which found a slightly smaller average decline of 4.8 percent nationwide and no significant impact across the broader southern region.

Introduction

Virginia's landscape is changing. Drive through rural counties, and you might spot something new: vast arrays of solar panels stretching across former farmland, capturing sunlight and converting it to electricity. These utility-scale solar facilities, some covering hundreds of acres, represent Virginia's push toward renewable energy. But for homeowners living nearby, they also represent uncertainty. What happens to property values when a solar farm becomes your neighbor?

This question has sparked heated debate in county board meetings and community forums across the Commonwealth. For homeowners near these sites, the arrival of a solar farm often comes with mixed feelings. Some residents worry about visual impacts and lost rural character. Others point to the tax revenue and clean energy benefits. The question is whether these sentiments translate into measurable changes in property values. Yet until now, we've had limited evidence about how these solar developments actually affect nearby property values in Virginia specifically.

I attempt to answer this question using over a decade of property sales data from across Virginia. By tracking what happened to home values near utility-scale solar installations, compared to similar properties farther away, the results reveal patterns that local officials, developers, and homeowners all need to understand.

Our Study

Virginia has experienced remarkable growth in solar energy development, moving from virtually no utility-scale solar in 2011 to becoming one of the fastest-growing solar markets in the nation. Most of this growth has occurred in rural areas where land is available and relatively affordable. The solar facilities I studied aren't rooftop panels - they're utility-scale installations of 5 megawatts or larger. These 40 utility-scale facilities were all installed before 2021, giving us time to observe their effects on nearby property markets.

To understand solar development's impact on property values, I analyzed residential property sales across Virginia from 2011 to 2024. This dataset captures over 100,000 property transactions, with more than 11,000 sales occurring near solar installations after they became operational. The average home in the dataset sold for $336,000 (in 2017 dollars), representing a typical Virginia residential property outside major urban centers.

I employed a difference-in-differences approach, widely regarded as the gold standard for causally evaluating the impacts of infrastructure projects on property values. This method compares changes in property sales prices near solar installations (the "treated" group, within three miles) to changes in sales prices of comparable properties located slightly farther away (the "control" group). By leveraging this before-after and near-far comparison, the research design naturally accounts for any pre-existing differences between the areas and isolates the causal effect attributable to the solar installation itself.

Table 1. Impact of Utility-Scale Solar Development on Property Values in Virginia

Note: Results from difference-in-differences regression analysis. The dependent variable is log of property sale price. Coefficients represent percentage changes in property values. Properties within 3 miles of solar sites are considered “treated”, and properties in the 5 to 6 mile bin are considered “controls”. A comprehensive set of controls is included (as in Hu et al., 2025), and fixed effects at the census tract by year level are added to absorb the time-varying external location-specific shocks in the housing market. * denotes statistical significance at the 5 percent level.

A Modest Impact

The results show that properties within three miles of utility-scale solar installations in Virginia experience a statistically significant decline in value after the solar facility becomes operational. The magnitude is approximately 5.5 percent, which translates to about $18,500 for the average Virginia home in our sample priced at $336,000.

What makes this particularly interesting is how Virginia's experience compares to national trends. Last year, my colleagues and I published a comprehensive nationwide study in the Proceedings of the National Academy of Sciences analyzing 8.8 million property transactions across the United States (Hu et al., 2025). That study found a national average residential property value decline of 4.8 percent within three miles of solar installations - slightly lower than Virginia's 5.5 percent. Moreover, the national study found that in the South region, which includes Virginia, utility-scale solar sites did not significantly reduce property values. The impact appears to be concentrated near installations, with effects diminishing with distance and becoming insignificant beyond three miles.

Virginia homeowners appear to experience a more negative impact than the southern or national average, though the effect is still moderate rather than catastrophic. It's smaller than impacts researchers have found near some industrial facilities (e.g., 11 percent in Currie et al., 2015), but larger than effects of wind turbines in some studies (e.g., 1 percent in Guo et al., 2024).

Understanding the Impact

Why do property values decline near solar installations? The mechanisms likely vary from place to place, but the national research we present in Hu et al. (2025) provides important clues. The nationwide study found that visual details, such as whether you can actually see the solar panels, how much you can see, or whether you're directly facing them, don't usually significantly change the impact. Properties with clear views of solar installations experienced similar value changes to nearby properties without views.

This suggests something important: the impact may stem more from perceptions and concerns about living near solar infrastructure than from actual visual or physical nuisance. In other words, it might be more about the idea of having a solar farm as a neighbor than the specific visual experience of seeing the panels.

The national study also found striking differences based on community context. Solar installations in heavily Democratic-leaning counties (with over 65 percent Democratic votes in the 2016 Presidential election) showed virtually no negative residential impact, while more conservative counties experienced larger negative effects. Solar projects built on brownfield sites (previously contaminated or undesirable land) actually increased nearby property values, while those on greenfield sites (agricultural land or open space) decreased values.

These patterns suggest that community attitudes and land use history matter enormously. Where solar energy aligns with community values or improves undesirable sites, impacts are minimal or even positive. Where it conflicts with preferences for rural character or agricultural land preservation, impacts are more pronounced.

Implications for Virginia Communities

These findings have important implications for how Virginia approaches solar development. For local governments considering solar projects, the results underscore the need for careful site selection and community engagement. Setback requirements, vegetation buffers, and screening can help, though the evidence suggests these mitigation strategies address only part of the concern. More fundamentally, understanding community attitudes and choosing appropriate sites matters.

The research also points toward other potential mitigation strategies. If brownfield redevelopment can turn negative impacts into positive ones nationally, Virginia communities might prioritize solar development on previously disturbed or undesirable sites. If political and cultural attitudes significantly influence impacts, then genuine community engagement and education become crucial - not just as process requirements, but as substantive factors affecting outcomes.

For homeowners, the results provide clarity about what to expect. If you live within three miles of a proposed solar facility, it is likely that your property value will decrease modestly, based on recent experience within the state and nationally. At the same time, the moderate size of the impact suggests that well-planned solar facilities will not devastate local property markets.

Fair Compensation and Policy Solutions

One of the most important insights from the broader research is that mechanisms for fairly distributing the costs and benefits of solar development are needed. Solar energy provides enormous climate benefits—the national study estimated annual carbon mitigation benefits of about $22 billion for existing U.S. solar installations. But it also creates localized costs, primarily in the form of property value losses, estimated at about $4 billion annually nationwide.

This creates a fairness issue: the benefits of clean energy accrue to everyone, while the costs fall on specific homeowners who happen to live near installation sites. Addressing this requires thoughtful policy. Some communities have implemented payment-in-lieu-of-taxes agreements that direct solar revenue to affected areas. Others are exploring direct compensation mechanisms for nearby property owners.

The nationwide research demonstrated how such compensation plans might be designed. For example, based on national averages, homeowners within three miles might receive annual compensation equal to about 5 percent of their property value for several years following installation. The specific amounts should vary based on local impacts, distance, and other factors, but the principle is clear: those bearing costs deserve compensation.

Looking Forward

Virginia has set ambitious renewable energy goals, and utility-scale solar will play a major role in meeting them. Understanding the local impacts of this infrastructure is essential for smart planning and fair policy. The estimated 5.5 percent average property value decline in Virginia is neither negligible nor catastrophic. It's a real cost that deserves attention in how we site and approve solar facilities.

At the same time, this research shouldn't be interpreted as an argument against solar development. Every form of energy infrastructure creates local impacts. The question is how we can develop renewable energy infrastructure in ways that minimize negative effects and fairly distribute both costs and benefits.

As Virginia continues its energy development, evidence-based conversations about these trade-offs will be essential. The solar panels stretching across Virginia's rural landscape represent our collective effort on a future with better and abundant energy. Making sure that the future works for everyone - including those who live near these installations - requires understanding the full picture of costs and benefits. This research contributes one piece of that puzzle.

References

Currie, J., Davis, L., Greenstone, M., & Walker, R. (2015). Environmental Health Risks and Housing Values: Evidence from 1,600 Toxic Plant Openings and Closings. American Economic Review, 105(2), 678–709.

Guo, W., Wenz, L., & Auffhammer, M. (2024). The visual effect of wind turbines on property values is small and diminishing in space and time. Proceedings of the National Academy of Sciences, 121(13), e2309372121.

Hu, Chenyang, Zhenshan Chen, Pengfei Liu, Wei Zhang, Xi He, and Darrell Bosch. "Impact of large-scale solar on property values in the United States: Diverse effects and causal mechanisms." Proceedings of the National Academy of Sciences 122, no. 24 (2025): e2418414122.

For questions about this research or to discuss solar development impacts in your community, contact Zhenshan Chen at the Department of Agricultural and Applied Economics, Virginia Tech.

Check out the article that studies this issue nationally: https://www.pnas.org/doi/full/10.1073/pnas.2418414122

The Campus to Commonwealth (CC) article series highlights the Virginia Tech Department of Agricultural and Applied Economics' mission in generating and sharing knowledge in applied economics and agribusiness principles that help address the food, financial, health, development, policy, environmental, and social needs in Virginia and beyond.

John Bovay is the managing editor, and Melissa Vidmar is the production editor.