Compare the whole farmland cash flow before signing
Agrivoltaics combines crop production with electricity generation above farmland.
A farmer or an heir considering an installation or site lease needs to compare more than electricity sales.
Upfront construction and grid costs, reduced farming income, debt repayments and final removal can all change the cash available to the owner.
This Korea agrivoltaic income calculator compares owning the installation, leasing the site and continuing ordinary farming over the same site and term.
It uses KRW, Korean regulatory context and rules checked on 2026-10-19.
A larger first-year cash flow need not produce a larger net present value, especially when equity is invested upfront or restoration costs arrive at expiry.
The decision this supports
Compare net cash and NPV within an actually usable term, then identify what EPC price or annual rent deserves further negotiation.
Save the conditional statement for local-authority, contractor and lender discussions.
The result does not establish permit eligibility, grid access or guaranteed generation.
Three alternatives and their comparison measures
Own installation
Add electricity sales and remaining farming income; deduct operation, replacement, restoration, interest and principal.
See initial equity separately from unlevered project NPV.
Lease the site
Add rent and the farming income actually belonging to the owner.
Deduct owner costs and the owner’s restoration liability at expiry.
Keep farming
Repeat baseline annual farming net income over the same term.
This is the opportunity-cost baseline for incremental NPV and installation payback.
Outputs include each NPV, first- and final-year cash, incremental NPV, sustained installation payback and discounted payback.
Break-even annual rents match either farming or installation NPV; the selling-price threshold matches the better lease or farming alternative.
Annual rows expose principal, interest, terminal debt and replacement or restoration payments.
Align input units and income entitlement
Area, capacity and yield
Enter m², rated kW and annual specific yield in kWh/kW/year.
Convert daily equivalent full-load hours to an annual figure by multiplying by 365.
Area is a site reference; the calculator does not derive allowable capacity or permit feasibility from it.
Realized price and REC
Use either a total realized KRW/kWh price or separate SMP and REC assumptions.
The separate formula is SMP + REC price × weight / 1,000.
REC price is entered in KRW/REC and converted from the MWh basis.
Check certificate rights, weight and settlement terms; never add REC again to an inclusive contract price.
Farming net income
Use annual crop income after expenses rather than gross produce sales; negative income is allowed.
The reduction rate applies proportionally to net income.
This is a simplification: a crop-yield reduction does not imply an equal net-income reduction when selling prices or costs change.
Owner share after leasing
Use 100% if the owner keeps all modeled farming income, or 0% if another farmer receives it entirely.
Do not count another person’s crop income as the landowner’s cash.
The installation and lease may use different farming-reduction assumptions.
Zero initial amounts are placeholders, not free services or exemptions.
Align EPC, grid, design, insurance, inspection, replacement and removal quotes on the same scope and VAT basis.
Include nonrecoverable VAT in costs; review recoverable VAT and restoration-deposit refunds in a separate funding plan.
Use annual rent rather than an entire multiyear lump-sum lease payment.
Formulas include both borrowing and principal repayment
Q_t = capacity × annual yield × (1 − degradation/100)^(t − 1)
p = total price, or SMP + REC price × weight / 1,000
Initial equity = EPC + other initial costs − loan
NPV = initial cash flow + Σ[annual net cash / (1 + discount rate/100)^t]
Own-installation cash adds Q_t × p and reduced farming income, then deducts operating costs, replacement, interest and scheduled principal.
The final year also deducts removal and restoration plus all debt remaining after the scheduled payment.
Borrowing reduces initial equity but creates future repayments; subtracting interest alone would overstate owner cash.
Interest uses opening annual principal at a fixed rate, with equal principal paid at each year end.
Actual monthly repayment, grace periods, floating rates, fees and lender rounding may differ; compare the model with the actual amortization schedule.
Unlevered project NPV uses full initial cost and operating cash including farming income.
The three-option comparison uses owner or equity cash flows.
Lease cash = annual rent + baseline farming net income × (1 − lease reduction) × owner share − annual owner costs, less owner restoration in the final year.
Ordinary farming cash equals baseline net income.
Cash is received and spent at year end; prices, rent, farming income and operating costs remain fixed, with degradation affecting generation only.
How to use the calculator and evidence states
- Check the site and genuinely usable permit or contract term first.
Do not treat an unapproved extension or future statutory limit as a checked term.
- Enter quoted capacity, annual yield, degradation and a realized price.
Choose inclusive pricing or separate SMP and REC assumptions.
- Separate EPC and other initial costs from annual operation, one optional replacement, and terminal restoration.
Avoid paying for the same quoted item twice in the inputs.
- Enter farming net income, both reduction rates, income entitlement, annual rent and owner costs.
Align payment frequency and liability with the actual lease.
- Enter debt, repayment term and discount rate.
Review remaining principal when the site term expires before the loan term.
The initial loan cannot exceed total initial costs.
- Record the status, date and optional source reference for permits, grid, construction, energy, farming, lease and finance.
Any unconfirmed group, or checked group without a date, withholds totals, rankings and thresholds.
An assumed group makes the entire result an assumption scenario.
TXT export retains inputs, units, statuses, dates, references, results and annual rows.
Use the printed statement alongside quotations and contract documents to ask why offers differ.
The form processes its inputs in browser memory.
Fictional example: first-year cash and total NPV can disagree
Assume 3,300 m², 100 kW, annual yield 1,200, total price 200 KRW/kWh and 0% degradation.
EPC is KRW 100 million, other initial costs KRW 10 million, and annual operation KRW 2 million.
Baseline farming net income is KRW 10 million with 20% installation reduction, 10% lease reduction and 100% owner share.
Annual rent is KRW 8 million, annual owner costs KRW 1 million, and terminal restoration KRW 5 million for installation or KRW 1 million for leasing.
A KRW 50 million loan is repaid over 5 years at 4%, with an 8-year comparison, 0% discount and no replacement.
These are arithmetic assumptions, not market quotes or an available permit term.
Fictional eight-year first-year cash, total NPV and incremental NPV, amounts in KRW| Option | First-year cash | 8-year NPV | Increment over farming |
|---|
| Own installation | 18,000,000 | 119,000,000 | 39,000,000 |
| Lease the site | 16,000,000 | 127,000,000 | 47,000,000 |
| Keep farming | 10,000,000 | 80,000,000 | 0 |
Negotiation thresholds in this example
First-year generation is 120,000 kWh and sales are KRW 24,000,000.
Initial equity is KRW 60,000,000 and incremental installation payback is 5.8 years after debt service and restoration.
Unlevered project NPV is KRW 125,000,000.
Annual rent of KRW 7,000,000 matches installation NPV; KRW 2,125,000 matches ordinary farming.
A realized selling price of 208.333333 KRW/kWh matches the better lease or farming NPV.
Shorten only the usable term to 2 years and year 2 pays scheduled principal of KRW 10,000,000 plus remaining debt of KRW 30,000,000.
After restoration, that year’s installation cash is −16,600,000 KRW.
Extending the model beyond the real permit or ignoring terminal debt would hide this funding burden.
Read NPV, sustained payback and break-even carefully
Total versus incremental NPV
Total NPV includes farming income and is not solar-only profit.
Incremental NPV subtracts ordinary-farming NPV to show the change from continuing the baseline activity.
The star marks the highest modeled NPV, including ties, rather than a recommendation to invest.
Recovery after final costs
Installation payback recovers initial equity from cash additional to keeping farming, with linear interpolation inside a year.
Recovery is withdrawn if later replacement or restoration makes the cumulative amount negative again.
Discounted payback uses discounted incremental cash.
Lease and farming payback are not applicable because the model gives them no initial investment.
Negotiation thresholds
Annual-rent thresholds hold farming entitlement, owner costs and restoration unchanged while matching a target NPV.
The selling-price threshold matches the better alternative.
Zero generation makes the selling-price threshold unavailable.
A negative threshold means zero already meets the target; it does not recommend a negative rent agreement.
Practical scenarios and sensitivity
- Farmers planning retirement cash: review annual cash during loan repayment and at expiry alongside NPV.
Using increments over farming helps avoid counting existing household farming income as a new solar benefit.
- Heirs evaluating site leasing: establish whether you retain crop income.
Changing owner share between 0% and 100% illustrates different contracts; it does not determine which lease is lawful.
- Owners comparing EPC and lease offers: align the site, term and farming baseline, then apply each contract’s actual restoration liability.
Check whether a cheaper EPC quote excludes grid, maintenance or removal work.
Sensitivity changes selling price by −20% and +20%, and both installation and lease farming-reduction rates by −10 and +10 percentage points.
Reduction rates are bounded at 0–100%.
These are input variations, not crop-study confidence intervals or probability forecasts.
For simultaneous price and farming stress, change those inputs together and recalculate.
Korean 2026 law and model boundaries
Sources were checked on 2026-10-19.
Farmland Act Article 36 and Enforcement Decree Article 38 were verified in versions effective 2026-09-18.
Temporary use is linked to farmland restoration, and permitted or extended terms depend on the applicable use.
Do not apply a universal 8- or 23-year term across ordinary farmland, special reclaimed saline land and experimental projects.
The Act on the Promotion and Support of Agrivoltaic Power Generation Business, Act No. 21804, was enacted on 2026-06-16 and is scheduled to take effect on 2026-12-17.
Article 7 provides an outer limit of 30 years from permission, with the actual term determined by the local authority under the presidential decree.
It does not grant every current site a 30-year term.
Recheck operator requirements in Article 5, eligible sites in Article 6, permits and grid conditions in Article 8, deemed permission in Article 10, and continuing farming duties in Article 13.
The MAFRA draft decree consultation is not a final rule already in force.
This before-tax model does not automatically include taxes, subsidies, land transactions, residual value, curtailment, construction delay, early termination or restoration-deposit refunds.
Review upfront deposit payment and actual refund timing in a separate funding plan.
Update assumptions when costs, crop prices or financing change.
Site legality, structural suitability, machinery access, sunlight and crop selection require their own review.
Frequently asked questions
Does entering 30 years establish permit eligibility?
No; it models cash over the entered term.
The new Act’s Article 7 outer limit is scheduled for 2026-12-17, with actual term, operator and site requirements to be checked separately.
Use an authority-checked term or an explicit assumption.
Are current SMP and REC prices filled automatically?
No; enter a total realized price or separate assumptions.
Check contract receipts, certificate rights and weight.
KPX weighted-average SMP is a trend statistic and need not equal your contract settlement.
Is the reduction rate a physical crop-yield loss?
Here it proportionally reduces farming net income.
Review crop prices, variable costs and extra labor to choose an appropriate income assumption.
For a negative baseline, proportional reduction can mathematically reduce the loss; verify the actual economics.
What if someone else farms the leased site?
Set owner share to 0% if none of that farming income belongs to the owner.
Do not combine the owner’s rent with another farmer’s entire income as personal receipts.
Check leasing legality separately.
What if the loan outlasts the site term?
The final year pays all remaining principal after its scheduled payment.
The fictional 2-year example adds KRW 30,000,000 terminal debt to KRW 10,000,000 scheduled principal.
Refinancing or extension is not assumed.
What if restoration reverses earlier payback?
If the final cumulative incremental cash is negative, sustained recovery is not reported.
This prevents an early crossing from concealing final restoration costs.
Also inspect temporary funding shortfalls in annual rows.
Are taxes, subsidies and restoration deposits included?
They are not calculated automatically.
Use consistent VAT treatment and separately verify taxes, approved support, deposit payments and refunds.
Do not automatically count a refundable deposit as both restoration expense and an unconditional receipt.
Why are results withheld or labeled assumptions?
Any unconfirmed evidence group or missing checked date withholds totals, ranking and break-even values.
Assumed records permit a scenario without implying verification.
Even a zero cost requires a checked or explicitly assumed basis.
Official sources and update basis
Rule year: 2026; checked 2026-10-19.
Direct National Law Information OPEN API checks covered Farmland Act MST284301, Decree MST288811 and enacted Agrivoltaic Act MST286945.
The future Act was not returned by the current-law name search, so its official serial number was used for direct article and effective-date checks.
Future rules are not presented as already in force.
Recheck commencement, final decree and rules, transition provisions, actual permits and restoration deposits, sales and REC rights, crop economics and lender schedules.
No statutory default crop loss, installation price or future selling price is supplied.
Retain each source’s date when saving a comparison.
Take one consistent statement to the next discussion
Check the usable term and grid capacity, then replace assumptions with actual EPC and lease records.
Save the statement with crop-income entitlement and restoration responsibility identified.
Use the break-even annual rent and selling price to ask specific questions, and verify the inputs that change your decision first.