Solar Power or Forests? A Cost-Benefit Analysis of Forest Land Conversion in the Northeastern United States

Abstract

This study conducts a cost–benefit analysis of replacing forest land with a large-scale solar (LSS) photovoltaic (PV) facility, using data from a proposed 9.35 ${\text{MW}}_{\text{DC}}$ project in the Northeastern United States. The analysis quantifies and monetizes key impacts over a 20-year timeframe, including reductions in carbon dioxide emissions from solar electricity generation, lost carbon storage and sequestration from deforestation, lost ecosystem services, and potential reductions in nearby property values. The results under various scenarios show positive net present values ranging from 2.7 to 12.7 million US dollars at 3% discount rate, indicating that the benefits of the solar PV project outweigh the costs of forest land conversion. Results also show that benefits and costs are distributed disproportionately with costs being borne primarily by those living in proximity to the LSS facility. This research contributes to ongoing debates about land use trade-offs in renewable energy expansion and provides a systematic framework for evaluating the economic efficiency of LSS projects that replace forests. The findings may guide policymakers and communities in assessing the overall desirability of hosting such developments, especially in areas with significant forest cover.