Center for Economic Analysis

There has been explosive growth in data centers.  Nationwide there are more than 4,500 active data centers and there more than 700 currently under construction (electrichoice.com).  These centers use 4.4 percent of all the electricity consumed in the U.S. (electrichoice.com).  It is estimated that by 2028 between 6.7 to 12.0 percent of the electricity used in the U.S. will be used by data centers (iaei Magazine).   The increased demand for electricity from these data centers and the interest in low cost renewable energy has increased the demand for solar power.  Data centers and solar farms have the potential to increase the demand for land in Michigan, especially at the township and county level.  This in turn has the potential to raise farmland prices and rental rates on farmland in these locations, reducing the profitability of farming and pricing farmers out of the land market. 

One potential way to keep land in farming while meeting the needs of data centers and solar farms is to convert brownfields into land used for data centers and solar farms.   A brownfield is a contaminated site that is not currently being used.  It is estimated that Michigan has 24,000 contaminated sites (Guth).  While many sites are located in urban areas and abandoned mines, brownfields can be found throughout the state.  If a current brownfield is converted to a data center or a solar farm the level of economic activity can be maximized because there is no loss of farm sales (Miller and Knudson). 

Farming is at a competitive disadvantage compared to solar farms and data centers.  On a per acre basis solar farms generate more income and economic impact compared to farming (Miller and Knudson).  The same is true for data centers.  This allows the owners and operators of data centers and solar farms to outbid farmers for land.  This in turn, increases local land prices and rents, thereby reducing local farm profitability.  These facilities allow landowners to generate higher incomes that they would if they leased the land to farmers or farmed the land themselves.

Farmland is attractive to solar farm developers for a number of reasons.  Farmland is generally flat and has direct access to sunlight.  Also, drainage is often not a problem (MSU, UM).  The fact that is located in rural areas has made it comparatively easy to develop compared to building solar farms in urban areas. 

An alternative to the use of farmland for data centers and solar farms is brownfields.  Brownfields are defined as “a property, the expansion, redevelopment, or reuse of which may be complicated by the presence or  potential presence of a hazardous substance, pollutant, or contaminant” (EPA).  Due to the cost of cleaning up these sites and the risk of finding additional pollutants many brownfields remain underutilized.  It may also be difficult to find workers willing to work at a brownfield.  There remains a stigma and fear attached to brownfields.

Brownfields have several desirable characteristics.  They generally have easy access to infrastructure such as electricity connection, water, sewer, and roads.   It appears that converting brownfields to data centers and solar farms is preferred by the public to converting farmland (Guth).  The economic impact of using brownfields for data centers or solar farms is likely to be greater than using farmland because the value of lost farm production would not have to be subtracted to assess the actual economic impact.

One issue with brownfields is that permitting may be more difficult than using greenfields such as farmland.  Testing of the land may also have to be undertaken.  This is true for solar farms and data centers.  Ground screws are becoming the standard for solar farms especially on difficult soils and land (Ludt), these screws are 5 to 8 feet long (Harris) and would impact the soil which may be contaminated.  Nonetheless, solar farms require less remediation of brownfield sites (MSU, UM) and would be a better fit than a data center.

In 2024, Michigan received a $129 million grant from the EPA for utility scale renewable energy projects on brownfields (MSU, UM). In order to use a brownfield an environmental assessment must be conducted.  The Michigan Department of the Environment, Great Lakes, and Energy is using $77.6 million to facilitate the cleanup of brownfields (Busse).  Developers of brownfields can also qualify for Tax Increment Financing (TIF), which allows developers to recapture the taxes assessed as a result of the increased value of the land (Guth).  However, most brownfields are too small for large efficient solar farms (MSU, UM). 

The state has also passed a tax credit bill for data centers (Allnutt).  However, repeal of these credits is currently under consideration.  The owners of the Saline data center have requested a 50 percent reduction in real and individual property taxes.  This abatement would last 12 years. When economic development programs are compared, the additional cost of developing a brownfield may make developing farmland the more attractive option.

PA 235 of 2023 requires utilities to source 50 percent of their electricity from renewable sources by 2030 and 60 percent by 2035 (MSU, UM).  Solar is increasingly the lowest cost source of renewable electricity.  PA 233 of 2023, gives developers of solar farms the ability to bypass local zoning and obtain land use approval directly from the MPSC.  Local zoning could still be needed if the local zoning is not stricter than the state standard and the project lies entirely within a city or village (MSU, UM).  Also, projects that are smaller than 50 megawatts require local approval (MSU, UM).

PA 108 of 2023 allows solar facilities to pay conceivably lower taxes on industrial personal property.  The taxes are set at $7,000 per Megawatt annually for 20 years; if the facility is located on a brownfield the payment is only $2,000 (MSU, UM).

To summarize, the potential for using brownfields for data centers and solar farms exist, but the incentives are usually not enough for developers to prefer brownfields to farmland and open space.  Furthermore, declining farm profitability also promotes the use of farmland for data centers and solar farms.

References

Busse, A. (2026).  “Michigan invests $77 million to retore contaminated areas across the state,”  Michigan Public Radio.

Electricchoice.com (2026).  U.S. Data Centers Power Map by State.

Environmental Protection Agency (EPA) (2017).  Brownfield Overview and Definition.

Guth, D. J. (2025) “From light to Bright:  Michigan Explores Solar Power on Brownfield Sites,” Inside Climate News.

Ludt, B. (2025).  “Ground screws solve challenging site problems for utility-scale solar,” solarpowerworldonline.com.

Michigan State University Extension, University of Michigan Graham Sustainability Institute (MSU, UM) (2025).  Planning & Zoning For Solar Energy Systems.

Miller, S.R., and W. Knudson (2021).  Michigan Community Solar:  An Economic Assessment, Michigan State University.