News
Staff Member
The recent shock announcement by DECC that there would be no support for ROC’s for Solar Parks with a capacity greater than 5MW after March 15th has left the industry reeling.
Support had been promised until March 2017 and many of the larger developers now have neither the time line nor availability of ready finance to complete or indeed start some of their proposed projects.
Without going into great detail (although I will in a later blog) the new Financial Instrument for investment in Solar PV farms over 5MW is the much derided Contracts for Difference (CFD’s).
This is a system that requires an auction and bidding process where Developers will not only need to compete against each other but also against other technologies such as On Shore Wind Turbines.
This will I believe create an elite tier of Multi National developers who have the financial clout and expertise to operate in this marketplace and make a viable financial option. This is also set against a background of reduced Government support for large ground mounted Solar Farms several of which have been vetoed by Mr Pickles the Community Secretary as reported in the telegraph here.
This Will Create Opportunities and Demand for Sub 5MW Developments…
I am currently working with two farmers who each have 30 – 40 Acres of low grade land one in the North of England and the other in the Midlands. Having now got DNO Connection Offers on each and positive mutterings from the Planners each piece of land is attracting a huge level of interest and very good financial offers from the Developer Community.
In the past the rationale was very simple – The larger the Solar park the cheaper the cost per kW installed and therefore the higher the potential profit. And to a degree that will still be the case but the economies of scale will now be focused on the 5MW sites.
The Key For Farmers and Landowners is to KEEP CONTROL of The Asset…
One the most astounding features of this business is the fact that many Farmers and Landowners only seek professional advice once they have granted ‘Exclusivity’ to a Developer and / or handed over the ‘Connection Agreement’.
This clearly puts you in a vulnerable position with the Developer already calling the shots. They can decide within the terms of the Exclusivity Agreement to Develop or not and of course sit on any Connection Offers – renewing as and when required but ultimately blocking any other applications.
The Scenario Changes Massively However If You…
Please call us for an honest and straightforward appraisal of your situation. Our Planning review and G59/2 Application is a completely Free of Charge service aand we are more than happy for you to speak with other Farmers we have been able to help
Mike Smith
Agricultural and Commercial Solar PV Consultant
0796 462 9142
[email protected]
11th June 2014
Support had been promised until March 2017 and many of the larger developers now have neither the time line nor availability of ready finance to complete or indeed start some of their proposed projects.
Without going into great detail (although I will in a later blog) the new Financial Instrument for investment in Solar PV farms over 5MW is the much derided Contracts for Difference (CFD’s).
This is a system that requires an auction and bidding process where Developers will not only need to compete against each other but also against other technologies such as On Shore Wind Turbines.
This will I believe create an elite tier of Multi National developers who have the financial clout and expertise to operate in this marketplace and make a viable financial option. This is also set against a background of reduced Government support for large ground mounted Solar Farms several of which have been vetoed by Mr Pickles the Community Secretary as reported in the telegraph here.
This Will Create Opportunities and Demand for Sub 5MW Developments…
I am currently working with two farmers who each have 30 – 40 Acres of low grade land one in the North of England and the other in the Midlands. Having now got DNO Connection Offers on each and positive mutterings from the Planners each piece of land is attracting a huge level of interest and very good financial offers from the Developer Community.
In the past the rationale was very simple – The larger the Solar park the cheaper the cost per kW installed and therefore the higher the potential profit. And to a degree that will still be the case but the economies of scale will now be focused on the 5MW sites.
The Key For Farmers and Landowners is to KEEP CONTROL of The Asset…
One the most astounding features of this business is the fact that many Farmers and Landowners only seek professional advice once they have granted ‘Exclusivity’ to a Developer and / or handed over the ‘Connection Agreement’.
This clearly puts you in a vulnerable position with the Developer already calling the shots. They can decide within the terms of the Exclusivity Agreement to Develop or not and of course sit on any Connection Offers – renewing as and when required but ultimately blocking any other applications.
The Scenario Changes Massively However If You…
- Apply to your DNO via G59 /2 for a Connection Offer. This will tell you the costs required to upgrade the local grid to facilitate your proposed 1 – 5MW Solar Farm. Importantly you will Own the Connection Offer – We do this for free on behalf of many Farmers and is the important first stage of your Successful Development
- You approach Local Planning with your proposed development proposals and gauge their response. There is already a long list of criteria to assess planning suitability and we are more than happy to share our knowledge.
- With a Connection Agreement and a potential favourable Planning outcome we can approach quality Developers and in effect ‘auction’ your asset to the highest bidder. Not only will you get the best Rental per Acre but all the other negotiable options such as Lease Premiums, Site Clearance Funding and Percentage Revenue Splits will be available to you as you will be in a real position of strength
Please call us for an honest and straightforward appraisal of your situation. Our Planning review and G59/2 Application is a completely Free of Charge service aand we are more than happy for you to speak with other Farmers we have been able to help
Mike Smith
Agricultural and Commercial Solar PV Consultant
0796 462 9142
[email protected]
11th June 2014