Solar Farming - Am I too quick to dismiss?

[Against_the_grain]

I think if sheep are grazing under it then it is still agricultural use! Its no different to having sheep grazing around a telegraph pole!
If you do go down that route you should make sure that the developer will replace any broken drains, and remove ALL traces of the setup

 

[Farmer Solar Adviser]

Hello, today I have been approached by a company wanting an area my land plus land of neighbouring farms to install a solar farm. From what I gather I'm among the 8% of land in my area suitable for solar farming.
Figures from £500, £750 per acre rental seem to have been suggested today.
To me this doesn't seem a lot of money to loose 25% ish of my irrigatable arable land for 25 years given I need a 1 in 5 minimum rotation for my spuds. My business is relatively small however stable and profitable and I've got many years of farming ahead of me.
Am I mad to dismiss so quickly? Or am I missing something?
Would I not be better building my own solar farm on a slightly smaller scale?
Anyone else been in this situation?

Thanks in advance

You can get at least 4000 an acre. The problem with a lot of developers is they take advantage of landlords not fully understanding how this works and take around 100k per MW. You need to get independent advice and if possible do the planning yourself because its not expensive and puts you in control of your return. We have achieved this for 2 landlords in the UK.

 

[Exfarmer]

You can get at least 4000 an acre. The problem with a lot of developers is they take advantage of landlords not fully understanding how this works and take around 100k per MW. You need to get independent advice and if possible do the planning yourself because its not expensive and puts you in control of your return. We have achieved this for 2 landlords in the UK.

4000 an acre you are joking
It is comments like this which give the industry a bad name
It may have been possible 2-3 years ago

 

[Farmer Solar Adviser]

4000 an acre you are joking
It is comments like this which give the industry a bad name
It may have been possible 2-3 years ago

I'm very serious. The problem in the market is that a lot of developers will ask for 60k 100k per MW as a developer fee from the fund the sell the project too !!! (about 10% of the capital cost) rather than being honest and sharing the financial models with the landlords. All of the well know funders you know probably know pay that out for getting planning and the DNO secured. A lot of them use the DNO application which costs nothing to do negotiate between landlords putting them under pressure to take the lower rate. The best route to take is to do the planning yourselves or share the costs. To be honest, planning is much less than you think and we can supply free templates to anyone who wants them to do that and the DNO for free.

 

[DX 3.90]

You can get at least 4000 an acre. The problem with a lot of developers is they take advantage of landlords not fully understanding how this works and take around 100k per MW. You need to get independent advice and if possible do the planning yourself because its not expensive and puts you in control of your return. We have achieved this for 2 landlords in the UK.

If getting £4000 an acre is realistically achievable then these developers must be making a fortune out of some the the solar farm systems!! So how hard is it to get the planning through doing it yourself, and if I got the plannkng would you the just go to a developer and lay your cards on the the table for a better deal?

 

[Exfarmer]

I have not done any ground mount but I am told the cost is about £1100 per KWp
Add on planning, legal fees, DNO upgrades etc and you are looking at £1200 per KWp
This is £240,000 per acre
Giving an expected income around £24,000 per year of exported electricity and other benefits
less insurance and rates £1500
maintenance, washing weed control etc £500
Replacement, mainly inverters and the odd panel £1000 / annum

so nett income £21,000

this equates to an 8% return when an inflation factor of 2.5% is built in, before paying rent or any management fees

add in a £1,000 per year rent
will reduce this to 7% which is not excessive considering the risk factor. I would doubt many farm projects would go ahead offering this kind of return

without the inflation factor it equates to a 5% return

 

[DX 3.90]

I have not done any ground mount but I am told the cost is about £1100 per KWp
Add on planning, legal fees, DNO upgrades etc and you are looking at £1200 per KWp
This is £240,000 per acre
Giving an expected income around £24,000 per year of exported electricity and other benefits
less insurance and rates £1500
maintenance, washing weed control etc £500
Replacement, mainly inverters and the odd panel £1000 / annum

so nett income £21,000

this equates to an 8% return when an inflation factor of 2.5% is built in, before paying rent or any management fees

add in a £1,000 per year rent
will reduce this to 7% which is not excessive considering the risk factor. I would doubt many farm projects would go ahead offering this kind of return

without the inflation factor it equates to a 5% return

So you don't think making £20000/ac is excessive yet paying the landlord £4000/ac is??

 

[Exfarmer]

Um, well, yeah but, no but, doh

this is not profit
there is £240,000 capital invested which needs repaying
as I said it will return 7% with a rent of £1000 / acre
if the land is worth £10,000 an acre it seems that the landlord achieving 10% return, is getting by far the better deal

 

[Bob]

You're pretty much on the money 6.6p FIt and you can currently achieve 6.2 pence for Export.

The only downside is the initial up front planning / environment reports costs etc that can be expensive and may prove to be deal breakers. It's worth using the company who approached you as they must have some ideas around planning in your area

Who is giving 6.2p for Export at the moment,? Would be interested in a PPA for that price as it better than mine!!

 

[wellingtonfarmer]

Easily on the spud side of things. Who knows the combinables or spud prices in 10 never mind 25 years time?

How do you make £800 acre growing spuds?

 

[Exfarmer]

How do you make £800 acre growing spuds?

Have made 4 times that
Have lost more than that too

 

[agricrop]

How do you make £800 acre growing spuds?

I wouldn't be growing spuds if that's all I made

 

[wellingtonfarmer]

I wouldn't be growing spuds if that's all I made

£800 acres profit? Hmmm

 

[wellingtonfarmer]

Have made 4 times that
Have lost more than that too

Yep same here, so on average I tend to make f all