“Financing an agrivoltaic project is not simply a matter of financing a solar power plant. For banks, this hybrid asset must demonstrate its ability to generate electricity while maintaining a viable agricultural activity,” said Laetitia Limongi, renewable energy structured finance manager at Banque Populaire du Sud, speaking at the AgriVoltaics Industry Forum Europe 2026, held in Bordeaux, France, on October 13 and 14, 2026.
In a less favorable financial environment, this complexity is weighing on the bankability of projects and prompting stakeholders to seek new sources of revenue and capital.
Less predictable revenues
Rising interest rates are increasing the cost of debt, while investors can now choose between renewable energy projects and other investments, such as bonds, whose risk-adjusted returns may prove more attractive. Their return requirements are rising, potentially undermining the financial viability of some projects.
According to Jochen Hauff, founder of the Think Resiliency think tank, “reduced visibility over electricity revenues is adding to this pressure on financing.” He notes that “curtailment, periods of negative prices, difficulties connecting to the grid and regulatory changes make cash flows harder to predict.” On the agricultural side, meanwhile, rising diesel, fertilizer and labor costs are squeezing margins, while farmers must also finance their equipment.
Under these conditions, banks closely examine four criteria when assessing an agrivoltaic project: revenue predictability, the allocation of contractual responsibilities, the sustainability of the agricultural activity and the project’s resilience under adverse scenarios. A fall in revenue or an increase in operating costs must not jeopardize debt repayment.
Contract duration is also crucial. A 10- to 15-year power purchase agreement (PPA) does not offer the same level of certainty as a support tariff secured for 23 years.
“The more uncertain revenues are, the more lenders may require additional guarantees, reduce their exposure or increase financing costs. The limited track record of agrivoltaic projects reinforces this caution,” said Limongi. Without sufficient reference projects against which to compare actual performance and contractual models, banks have less data available to assess risk. This uncertainty can translate into higher interest rates and stricter financing conditions.
“Today, project financing largely relies on a combination of electricity revenues and commercial debt. By way of illustration, a typical model today might derive 80% of its revenue from tariffs or support mechanisms and 20% from PPAs or electricity sales on the market. On the financing side, the split would be 70% bank debt and 30% equity,” Hauff said.
Carbon and biodiversity as additional revenue streams
However, this structure becomes more fragile when debt becomes more expensive and revenues less predictable. Diversifying funding sources therefore offers a way to spread risk and attract new investors.
“A forward-looking model could reduce the share of revenue from support mechanisms to 50%, with 30% coming from electricity sales on the market and agricultural and environmental services accounting for 20%,” Hauff added. Financing could, in turn, incorporate 10% to 20% private debt, 40% to 50% bank debt and 30% to 40% equity.
Against this backdrop, one potential approach is for farmers to receive payment for the environmental services provided by their farms. Alongside selling their crops and, indirectly, the electricity generated, farmers could also monetize the ecological benefits of the practices implemented on their land.
“Soil carbon storage is one possibility,” explained the Think Resiliency founder. “Cover crops or planting hedgerows can contribute to this objective. Where the results are additional, measurable and verified against a recognized standard, they can generate carbon credits or certification, particularly under France’s Low-Carbon Label scheme.”
Other ecosystem services could also be eligible for payment, including biodiversity conservation, improved water quality, soil protection and wetland restoration. Public programs or certain ecological compensation mechanisms could create markets for these services.
Attracting new capital
“Specialist funds, impact investors and financial players are willing to pay for this kind of monetization of natural assets,” Hauff said. “These players can complement traditional bank financing, without replacing the requirements for profitability and risk management.”
Private debt offers another potential source of funding alongside bank loans and equity. However, regardless of the source of capital, the central question remains what the financing is backed by: who commits to paying, for how long and with what guarantees? An innovative business model is not enough if buyers have little track record or projected revenues rely on assumptions that are difficult to verify.
The priority now is to present credible cash-flow projections.
“As projects become more widespread and agricultural and energy performance are documented more thoroughly, banks will be able to refine their risk models and adjust their financing conditions,” Limongi concluded, offering reassurance to stakeholders across the sector.
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