Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/53257 
Year of Publication: 
2011
Series/Report no.: 
Nota di Lavoro No. 90.2011
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
In this paper a real option model is developed to examine the critical factors affecting the decision to lease agricultural land to a company installing a PV power plant. The leasing payment is certain while the net revenues from agriculture are uncertain. We identify the profit values at which the farmer decides to lease his plot vs. continue farming it. By applying the model to the province of Bologna (Italy), we illustrate the possible land-use change scenarios in this area. We conclude by discussing the importance of PV energy production as a source of income for farmers and its implications from a social perspective.
Subjects: 
Land Allocation
Real Options
Renewable Energy
Solar farm
Uncertainty
JEL: 
C61
D81
Q24
Q42
Document Type: 
Working Paper

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