Why are Californian farmers adopting more (and larger) renewable energy operations?

The paper examines the renewable energy adoption and system size determinants for Californian farmers. We utilize a double-hurdle methodology where system size is determined through a heteroskedastic ordered binary variable model for four size categories. Our results for system size show that determinants of technology adoption differ from size determinants. For example, environmental practices, Internet connection, and electricity price influence adoption, while, total value of production and acre value impact the size of the installed system. Surprisingly, the price of electricity bears no impact on the size category chosen. Renewable energy adoption and system size have been increasing over time, thus our insights about the interplay of the determinants for adoption and size choice, will assist policy formation.

► California leads the way in the number of farms, and the size of operations, that produce renewable energy.
► Ten counties in California have 50% of the total number of on-farm renewable energy operations.
► Environmental practices and electricity prices positively influence renewable energy adoption.
► Economic factors are influential determinants for the size of the installed system, while electricity price is not.